According to IDC, AR/VR headset shipments declined in the first quarter of 2023

Global shipments of augmented reality (AR) and virtual reality (VR) headsets slowed significantly in the first quarter of 2023 (1Q23) as macroeconomic conditions deteriorated and the market cooled from last year’s pandemic-related highs.

According to new data from the global quarterly augmented and virtual reality headset tracker from International Data Corporation (IDC), the overall AR/VR headset market declined 54.4% year-on-year in Q1’23, with VR headsets down 96 .2% of the headsets shipped.

Among the top five manufacturers of AR/VR headsets, Meta continued to lead with a 47.8% share, but lost ground to Sony’s PSVR 2, which captured a 35.9% share during the quarter.

ByteDance (Pico) increased its share from 4.4% last year to 6.1% this year thanks to new products and markets. DPVR and HTC completed the top 5 with less than 2% share each.

“Despite the recent downturn, it is an exciting time for the AR/VR market as new entrants and the next generation of headsets are expected to be launched in the coming weeks and months,” said Jitesh Ubrani, Mobility and Consumer Research Manager -Device tracker at IDC.

“With Sony once again becoming Meta’s main competitor, all eyes are on Apple, which has yet to announce its headset. Apple’s sizable installed base of existing products and services will certainly help differentiate the company’s headset from other AR/VR vendors, although Apple’s stock gains will be short-term due to the rumored prosumer approach and high price tag associated with the headset will be limited.”

“IDC Tracker products provide accurate and timely market size, vendor share and forecast forecasts for hundreds of technology markets in more than 100 countries around the world. Using proprietary tools and research processes, IDC’s trackers are updated semi-annually, quarterly, and monthly. Tracker results are provided to customers in easy-to-use Excel files and online query tools.”

In addition to new devices from several companies, the AR/VR market is still in the critical development phase.

“It’s amazing to see the new features and functionality emerging on AR/VR headsets today, and while they may initially appeal to a select audience, they will continue to evolve and eventually gain traction with users,” says Ramon T Llamas, research director for mobile devices and AR/VR at IDC.

“Features like eye-tracking and environmental sensors, as well as the potential of AI-powered experiences and software—all of which are still in their infancy today—will eventually become more ubiquitous and inspire new use cases. Even AR/VR headsets are coming.” 2025 will make today’s headsets look quaint.”

“While VR headsets, i.e. those that obscure a user’s view, currently dominate the overall market, AR headsets with see-through or semi-transparent displays saw another solid quarter of growth in Q1 2023, up 12.6% year-on-year. The market has been fueled by simple headsets from companies like Nreal (now Xreal) that act as external displays for connected devices. Meanwhile, more advanced headsets that enable simultaneous location and mapping (SLAM) and 3D object manipulation suffered primarily from Microsoft’s difficulties during the quarter,” concludes Llamas.