AR & VR Headsets Market Share
Updated: 28 Jun 2021
Global Shipments of AR and VR Headsets Continue to Grow in First Quarter of 2021
AR/VR headset shipments were off to a great start in the first quarter of 2021 (1Q21) as global shipments grew 45% when compared to 1Q20. However, supply was constrained during the quarter as major companies such as Facebook faced global semi-conductor shortages, in particular display driver ICs, which led to a significant slowdown from the fourth quarter of last year.
Despite the shortages, Facebook’s volume grew 207.4% year-over-year as the company’s latest VR headset (Quest 2) remained immensely popular due to the lower price point and the need to game/socialize during the pandemic. Outside of Oculus, Chinese companies DPVR and Pico also performed well during the quarter as the companies grew 108.6% and 44.7% respectively. Each of the companies already has a strong foothold in China and are working to grow their international presence by catering to the commercial segment. Moreover, short term outlook for these companies bodes well as they address the need for lower cost headsets with 3 Degrees of Freedom (DoF) while also transitioning a portion of their userbase to more immersive 6 DoF headsets and content. Unfortunately, outside of these top 3 companies, most other VR headset makers experienced year-over-year declines due to tough competition from the top or aging product lines like the PSVR.
AR headset shipments declined 17.2% this quarter as top products like Microsoft’s Hololens 2 now have greater availability and the year-over-year comparisons are tough since there was plenty of pent up demand for the Hololens 2 in 2020Q1. It’s also worth noting that though shipments for this product are down, IDC does not include shipments to the military in the AR/VR headset tracker and as such, IDC is excluding the recent deal signed between Microsoft and the US military. Despite Microsoft’s decline, smaller companies such as Mad Gaze and RealWear continued to make progress and each has also succeeded at carving out its own niche. Mad Gaze continues to focus on the consumer segment while RealWear has done well in the rugged segment and continued to differentiate itself though the ability to use the headset with voice. Outside of these companies, volumes remain low as the AR market is still burgeoning.
Looking ahead, IDC forecasts VR headset shipments to grow at a limited pace in 2021 (28.9% YoY) as some of the top vendors struggle with component shortages. However, the long-term outlook remains quite strong as global shipments grow to 28.6M in 2025 with a 41.4% compound annual growth rate (CAGR). Meanwhile, AR headset shipments are expected to grow 45.6% in 2021 with a CAGR of 138% by 2025.