The sale of Augmented Reality (AR) and Virtual Reality (VR) headsets and content have not set the world on fire to date. Despite plenty of enthusiasm and hype the actual take-up has been miserable. But 2018 could see a rebound, according to a report from International Data Corporation (IDC).
New, or updated, hardware will help. HTC says its upgraded Vive VT headset (the Vive Pro) will appear at some point this year and will offer integrated audio complete with a built-in amplifier (and showcased at CES). Lenovo also has a new product (the Mirage Solo, based on Google’s Daydream device).
IDC’s latest forecast says that worldwide shipments of AR/VR headsets will grow to 68.9 million units in 2022, representing a CAGR of 52.5 per cent.
Despite the weakness the market experienced in 2017, IDC anticipates a return to growth in 2018 with total combined AR/VR volumes reaching 12.4 million units, marking a year-over-year increase of 48.5 per cent as new vendors, new use cases, and new business models emerge.
The worldwide AR/VR headset market retreated in 2017 primarily due to a decline in shipments of screenless VR viewers. Previous champions of this form factor stopped bundling these headsets with smartphones and consumers have shown little interest in purchasing such headsets separately. While the screenless VR category is waning, Lenovo’s successful fourth quarter launch of the Jedi Challenges Mirage headset—a screenless viewer for AR—showed the form factor may still have legs if paired with the right content. Other new product launches during the quarter included the first Windows Mixed Reality VR tethered headsets with entries from Acer, ASUS, Dell, Fujitsu, HP, Lenovo, and Samsung.
“There has been a maturation of content and delivery as top-tier content providers enter the AR and VR space,” said Jitesh Ubranisenior research analyst for IDC Mobile Device Trackers. “Meanwhile, on the hardware side, numerous vendors are experimenting with new financing options and different revenue models to make the headsets, along with the accompanying hardware and software, more accessible to consumers and enterprises alike.”
Looking ahead, IDC also expects the VR headset market to rebound in 2018 as new devices such as Facebook’s Oculus Go, HTC’s Vive Pro, and Lenovo’s Mirage Solo ship into the market with new capabilities and new price points. Meanwhile, with the exception of screenless viewers, AR headsets are likely to remain largely commercially focused until later in the forecast due to the technology’s high cost and complexity.
“While there’s no doubt that VR suffered some setbacks in 2017, companies such as Google and Facebook continue to push hard toward making the technology more consumer friendly,” said Tom Mainelli, program vice president, Devices & AR/VR research. “Meanwhile, Lenovo’s success with its first consumer-focused AR product shows that consumers are beginning to understand what augmented reality is and the experiences it can provide. This bodes well for the category long term.”