Global shipments of virtual (VR) and augmented reality (AR) headsets are declining for the fourth consecutive quarter, according to a new report from analytics agency IDC. At the end of the second quarter of 2023, delivery volumes of these devices were 44.6% below the same period last year.
Experts cite the unstable economic situation in the world as the main reasons for the decline in demand for AR/VR headsets. In addition, the growing popularity of these devices is hindered by increased prices for a number of individual popular devices in this segment, in particular the Quest 2 headsets, as well as the lack of new innovative solutions and a small number of suppliers of such devices.
According to IDC forecasts, actual sales volumes of AR/VR headsets by the end of 2023 will be only slightly higher than in 2017. Experts predict that 8.5 million such devices will hit the market by the end of this year. That is 3.2% less than in the previous year. It is noted that the average annual growth rate of sales of standalone AR and VR headsets in recent years has been 57.5%, and screenless devices that need to be used with a smartphone, such as the Samsung Gear VR, are almost have completely failed and disappeared from the market.
“In recent years, Meta✴ and Qualcomm have significantly expanded the AR/VR headset market, allowing the segment to move beyond simple smartphone-based virtual reality devices and into the production of standalone devices, paving the way for the development of VR games as well as numerous scenarios This paves the way for corporate use of these gadgets.”– commented IDC analyst in the field of mobile consumer devices market Jitesh Ubrani.
He added that the market continues to be replenished with new players. However meta✴ continues to retain its status as a segment leader – at the end of the second quarter it occupied 50.2% of the market for such devices. Sony’s share was 27.1% during the same period. ByteDance closes out the top three AR/VR headset vendors with 9.6% market share. The top five manufacturers included Xreal (formerly Nreal) and DPVR, each accounting for just over 2%.
While overall shipments of AR/VR headsets will decline in 2023, IDC predicts the market will recover in 2024 and also expects shipments of these devices to increase 46.8% year-over-year. Analysts describe new devices from Meta as the main growth driver✴ and ByteDance, the release of the Apple Vision Pro augmented reality headset, and new devices from smaller companies. Experts also expect shipments of AR/VR headsets to increase to 30.3 million units by 2027.
“The AR/VR device market is at a critical moment in its history. The release of Apple’s headset early next year is expected to increase manufacturers’ interest in this segment and increase competition. Either way, it will create more choice for the end consumer.”“Commented Ramon T. Llamas, Head of Market Research for Mobile Devices and AR/VR Headsets.