AR and VR headset business set to jump 31.5% in 2023: IDC

Global shipment of augmented reality (AR) and virtual reality (VR) headsets will decline 12.8 percent in 2022 to 9.7 million units due to rising prices, IDC said in its report.
IDC report on AR VR headset business
AR and VR headsets shipments are forecast to jump 31.5 percent in 2023. Sustained growth of more than 30 percent is also forecast for the next several years culminating in 35.1 million units shipped in 2026, according to IDC.

Meta (Facebook) has dominated the industry due to the accessibly priced Quest 2, which has captured 84.6 percent of the global AR / VR headset market during the first three quarters of 2022.

ByteDance’s Pico has 7.4 percent share over the same period. The top 5 list is rounded out by DPVR (1.8 percent), HTC (1.1 percent), and iQIYI (0.9 percent).

Market leaders in AR and VR headsets business will face challenges next year as Sony’s next generation headset launches and Apple also enters the market.

“With the Quest 2 price increase and premium pricing expected for the PSVR2 and Apple’s headset, consumers will likely be more reticent with their spend in the near term,” said Jitesh Ubrani, research manager, Mobility and Consumer Device Trackers at IDC.

Commercial growth will outpace the consumer segment in the coming years as businesses deploy VR headsets for training and other use cases and as new headsets begin to bleed into the AR territory by offering pass-through capabilities.

AR is facing another round of challenges as large brands such as Shadow Creator, Mad Gaze, and even Microsoft have struggled to sustain growth. This will create opportunities for next generation headsets as well as new competitors to enter the AR market, though this is likely to happen in 2024 at the earliest and 2025 in earnest.

“Augmented reality has long been the domain of standalone headsets geared towards commercial use, helping to transform the way companies train their workers,” said Ramon T. Llamas, research director, Mobile Devices and AR/VR at IDC.