HTC was the top vendor in China’s virtual reality (VR) headset market in 2016 with an 18 per cent market share by volume, according to Canalys.

Shipments hit 300,000 units last year, making China the world’s second largest market with about a 15 per cent share, the research firm said.

Taiwan-based HTC shipped more than 50,000 of its Vive headsets in the mainland. Chinese vendor DeePoon was a close second with a 17 per cent share.

DeePoon is chasing HTC in China and owes much to its partnership with Samsung, the supplier of chips and displays for its M2 smart VR headset, which accounted for 70 per cent of its VR shipments in China last year. The relationship proved vital in lowering the cost of its VR systems and maintaining a decent VR experience, said Canalys analyst Jason Low.

“HTC will need to continue its attack on the B2B market to ensure it maintains its lead. It is supplementing a good product with efforts to build a successful ecosystem by encouraging startups and content makers to produce engaging user experiences,” he said.

This will be a challenging year for local VR vendors, as limited access to resources and an inability to make bold decisions will continue to threaten investor-backed VR firms, which are under pressure to increase both revenue and profitability, Low said.

“HTC has been able to use its relatively stable financial position to convince the channel and ecosystem partners that it is in it for the long run,” he said. “Companies such as DeePoon and 3Glasses have now managed to move beyond the consumer market to attract business buyers. They will need to start building their ecosystems, engaging developers to create unique use-cases to give businesses confidence.”

Chialin Chang, smartphone and connected devices chief at HTC, this week said the vendor was pleased with its VR sales performance during 2016, stating in a conference call the company is “selling the product with a profit.

Sony’s consumer focus and low PlayStation 4 installed base led it to ship fewer than 30,000 units, taking fourth place in China despite leading in most other markets. “To boost PlayStation VR demand in China, Sony must ensure its AAA VR content is launched there at the same time as in other countries,” he said.

HTC, which recently announced continued uninspiring sales performance for smartphones in January, is betting on VR as a growth opportunity in future. However, media reports the company is seeing weak momentum for its Vive virtual reality headsets, caused by price and lack of available content – particularly now the early adopter market has been tapped.