The worldwide augmented reality and virtual reality (AR/VR) headset market have witnessed a steady decline for four consecutive quarters, with volumes plummeting by 44.6 percent year over year during the second quarter of 2023, according to IDC.
The latest data from the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker said factors such as the global economic downturn and a notable price increase on the popular Quest 2 headset, combined with aging hardware from multiple vendors, have contributed to the sluggish growth in this market.
This downward trend doesn’t come as a surprise given the ongoing economic challenges and the limited pool of suppliers for AR and VR headsets. Projections for 2023 suggest that volumes are expected to be only marginally higher than those in 2017, with an estimated 8.5 million headsets slated to ship this year, IDC report said.
However, the landscape has evolved considerably over the past few years, notably with the surge in standalone headsets, showcasing a compound annual growth rate (CAGR) of 57.5 percent. Concurrently, screenless viewers such as Samsung’s Gear VR have essentially vanished from the market.
Jitesh Ubrani, Research Manager for Mobility and Consumer Device Trackers at IDC, highlighted this transformation, stating, “Meta and Qualcomm have improved the AR/VR landscape, allowing the industry to move beyond simple phone-based VR to standalone headsets that have paved the way for VR gaming and numerous enterprise use cases.”
“However, more companies have skin in the game as Sony along with MediaTek and Apple have joined the race to enable next-generation experiences and potentially bring AR and VR technologies to an even larger market.”
Meta retains its position as the market leader, commanding a 50.2 percent market share during the quarter. However, the company faces a burgeoning challenge from Sony (27.1 percent market share) and ByteDance (9.6 percent share), both of which gained market share in 2Q23. Rounding out the top 5 were Xreal (formerly Nreal) and DPVR, each securing slightly over 2 percent market share.
Despite the decline anticipated for AR/VR headset shipments in 2023, IDC forecasts a market rebound in 2024, projecting a substantial growth of 46.8 percent year over year. This resurgence is attributed to the introduction of new hardware from Meta and ByteDance, the unveiling of Apple’s Vision Pro, and the escalating presence of smaller companies in the AR/VR technology arena. Looking further ahead, the market is predicted to soar, reaching an impressive 30.3 million units globally by 2027.