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Hong Kong/Singapore: The smash hit game that uses augmented reality technology to capture animated figures has investors eyeing other opportunities in sports, medical and design apps.

“What we are most positive on is the creativity," William Fong, the portfolio manager of Baring China Select Fund, said in a phone interview. “What we’re seeing on the streets is still the very beginning."

The technology for virtual and augmented reality can be used in sports training apps where a computer can analyze your golf or tennis swing, or in surgical procedures, Fong said. There are already apps where you can change the colour of the wallpaper and move furniture around on interior design sites, or try on different glasses on a picture of yourself.

While there’s lots of excitement about the technology, betting on any one company or one theme would be a mistake, Fong said. “The VR industry is still developing."

Canalys’s Jason Low says examples of the technology in China include:

Social networking companies like Tencent and Facebook may integrate VR content and games to social networking platforms to increase users, said Low, a Shanghai-based analyst.

The real value of virtual reality will be in the ideas behind software and content, rather than hardware, according to Richard Clode, co-manager of Henderson Global Investors’ Global Technology Fund.

There will be “near-term excitement" for stocks such as headset makers HTC and Himax, Clode said. Over time, the hardware specifications will improve and VR headsets prices will decline, he said.

On the software side, Baidu, Alibaba and Tencent have more options “because they have so much money," making it difficult for smaller Chinese technology companies to compete, Clode said.

Similar to smartphones, it’s important to “think less about who’s making the hardware" and “think more about the application," said Bloomberg Intelligence analyst Jitendra Waral. Bloomberg

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