Short-term lower demand for VR and AR headsets

Image: Meta

Although IDC has lowered its forecast for VR and AR through 2023, overall sales are expected to increase in the coming years, thanks in part to better AR glasses.

Research firm IDC has revised down its forecast for AR and VR headsets in 2023 and now expects 10.1 million headsets to be sold worldwide. It had previously forecast about 13 million units. The reason for this is a weaker than expected year 2022.

Despite the revision, IDC still anticipates unit growth, albeit slower than originally forecast. A compound annual growth rate of 32.6% is expected for the five-year forecast period from 2023 to 2027.

VR: Sony, Meta, Pico and Apple bring new momentum

According to IDC, the current global economic situation was responsible for the forecast correction in the current year. However, according to Jitesh Ubrani, research manager at IDC, an upturn is expected soon.

The research company IDC predicts a significant growth spurt in the VR and AR market over the next few years. | Image: IDZ

“Sony’s new PSVR 2 and Apple’s foray into space will help drive additional volume, while new devices from Meta and Pico, expected towards the end of 2023, will bring VR in 2024,” Ubrani said. With the Quest 3, for example, Meta is planning a successor to the mobile VR headset Meta Quest 2, which is expected to be released later this year.

However, due to their extreme popularity in 2020 and 2021, mobile VR headsets may have a harder time achieving high growth rates in the future. Wired headsets, on the other hand, could benefit from their low sales volume in 2022. According to IDC, AR headsets should also account for a larger proportion of the total volume in the future.

IDC: Augmented Reality is growing

“Meanwhile, on the AR front, consumer-focused brands like Xiaomi, Oppo, and TCL are expected to increase consumer awareness of this category over the next 6 to 18 months,” predicts Ubrani.

Known primarily as a smartphone company, Xiaomi is no newcomer to AR technology and is already selling smart glasses with a micro-OLED screen in China. At the beginning of March, Xiaomi introduced a new AR headset with retina sharpness and gesture control.

Overall, Ramon T. Llamas, research director of IDC’s Augmented and Virtual Reality research team, sees AR on the rise: “Consumer VR usage has dominated the AR/VR market, but growing interest in AR is starting to transform this segment to redesign.”

Augmented reality is becoming increasingly popular with consumers

So far, the AR segment has been dominated by commercial applications and training. However, more comfortable form factors of the devices, brighter displays and clearer sound will ensure that AR glasses will also be better received by consumers in the future.

“Combined with the widespread popularity of games for VR headsets, consumer usage will lead in both segments even as the case for commercial usage grows,” Llamas said.

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