According to the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker, worldwide shipments of augmented reality (AR) and virtual reality (VR) headsets declined by 44.6% year over year in the second quarter of 2023. The decline can be attributed to the negative impact of a price hike on the popular Quest 2 headset, as well as a slowdown in demand due to the global economic downturn and aging hardware from multiple vendors.
Despite the decline, the market has seen significant changes in recent years. Standalone headsets have experienced a compound annual growth rate (CAGR) of 57.5%, while screenless viewers like Samsung’s Gear VR have essentially disappeared from the market.
Meta continues to dominate the market with a 50.2% market share, followed by Sony with 27.1% and ByteDance with 9.6%. However, Sony and ByteDance have gained market share in the second quarter.
IDC forecasts a rebound in AR/VR headset shipments in 2024, with a year-over-year growth of 46.8%. This growth is expected to be driven by new hardware from Meta and ByteDance, the introduction of Apple’s Vision Pro, and the increased presence of smaller companies. By 2027, the market is projected to reach 30.3 million units globally.
The entry of Apple into the AR/VR market next year is expected to bring much-needed attention and competition. It will also provide users with more choices and comparisons, ultimately driving the definition of best-of-breed products.
Overall, while the AR/VR headset market is currently experiencing a downturn, the future looks promising with anticipated growth in the coming years.
Source: Business Wire
