AR & VR Headsets Market Share
Updated: 27 Mar 2023
Global Shipments of AR/VR Headsets Decline in 2022 While Rebounding in 2023
NEEDHAM, Mass., March 24, 2023 – The pendulum for AR/VR headsets swung the other way through the course of 2022 as global shipments declined 20.9% year over year to 8.8 million units, according to new data from the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker. The decline was not completely unexpected, however, given the limited number of vendors in the market, a challenging macro-economic environment, and a lack of mass market adoption from consumers.
The results for 2022 were also hindered by difficult comparisons to the prior year, when the market was bolstered by Meta's Quest 2 and strong spending by consumers stuck at home with disposable income for entertainment. As the Quest 2 approached its two-year anniversary and as global economies opened up, consumer and business spending shifted away from AR and VR headsets leading to the decline in 2022.
Despite the downturn, the overall market was led by Meta with nearly 80% share. In second place was ByteDance (Pico) with 10% share as the company continued to ramp up its product portfolio and focus on markets where Meta was notably absent or a lesser known brand. The remaining top 5 spots were held by DPVR, HTC, and iQIYI. One other notable company was Nreal who captured the sixth position amongst AR/VR headsets but held the top spot in the AR market by shipping nearly 100K units over the course of 2022.
"While Meta and ByteDance duke it out in the VR segment, Nreal has been able to slowly grow its presence by appealing to mobile gamers," said Jitesh Ubrani, research manager, Mobility and Consumer Device Trackers at IDC. "Though it's still early days for AR and VR, Meta has been able to build a moat for itself through its various first- and third-party content. This is where other players such as Sony and potentially Apple can provide meaningful competition though in the long run it'll put pressure on others including ByteDance and Nreal."
"Another area that is slowly gaining attention is mixed reality – devices that can switch between augmented and virtual reality," added Ramon T. Llamas, research director for Mobile Devices and AR/VR at IDC. "The release of the Meta Quest Pro last fall and the announcement of HTC's XE Elite earlier this year demonstrate clear innovation as to what is possible for the ARVR market, and it should not be difficult to imagine others following suit. Moreover, commercial users with multiple use cases – ranging from on-boarding and orientation to training and collaboration – may gravitate to its appeal. However, given the still low penetration of AR and VR into the market, it may take several cycles for mixed reality headsets to gain salience."
On the heels of a weaker than expected 2022, IDC has lowered the forecast for AR/VR headsets in 2023 with global shipments expected to reach 10.1M. Despite the reduction, total AR/VR headset shipments are expected to grow 14% in 2023 and growth will carry forward with a compound annual growth rate (CAGR) of 32.6% between 2023 – 2027.
"The challenging macro-economic climate is largely to blame for the reduced outlook though it will not impact all vendors equally," said Jitesh Ubrani, research manager, Mobility and Consumer Device Trackers at IDC. "Sony's new PSVR2 and Apple's foray into the space will help drive additional volume while new devices from Meta and Pico expected towards the end of 2023 will build momentum for VR in 2024. Meanwhile, on the AR front, consumer facing brands such as Xiaomi, Oppo, and TCL are all expected to drive consumer awareness for the category over the source of the next 6-18 months."
Amongst the various form factors, standalone VR headsets will face challenges in 2023 due their extreme popularity in 2020 and 2021 leading to unfavourable year-over-year comparisons and the dependence on Meta's product launch schedule. However, tethered VR as well as tethered AR glasses headsets will face a relatively easier path to growth due to the dearth of volumes in 2022.
“Consumer usage continued to dominate the ARVR market, but suddenly we saw a major shift towards consumer usage for augmented reality,” points out Ramon T. Llamas, research director for IDC’s Augmented and Virtual Reality research team. “Historically, commercial users led augmented reality for training and field service. But with the advent of lighter form factors, brighter displays, crisp sound and a growing list of titles, early adopters have swung the pendulum in the other direction. Combined with the widespread popularity of gaming for VR headsets, consumer usage will lead the market even as the case for commercial usage grows.”
Worldwide AR/VR Headsets Forecast, 2022Q4
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