Global Market Trends in Augmented Reality (AR) and Virtual Reality (VR) Headsets: A Look at Q1 2024
The global market for augmented reality (AR) and virtual reality (VR) headsets took a hit in the first quarter of 2024, with shipments plummeting by 67.4% compared to the previous year, according to a report by International Data Corp. (IDC).
The decline in shipments is attributed to the growing popularity of newer categories such as Mixed Reality (MR) and Extended Reality (ER). These technologies, which blend real-world views with virtual experiences and provide heads-up displays mirroring content from other devices, are gaining traction in the market.
Despite the drop in shipments, the average selling price (ASP) for headsets surged to over $1,000. This increase is largely due to Apple’s entry into the market with its Vision Pro headset and Meta’s focus on premium offerings like the Quest 3. IDC’s revised taxonomy now includes MR and ER, reflecting the industry’s shift towards these emerging technologies.
Jitesh Ubrani, research manager at IDC, commented on the trend, stating that “with mixed reality on the rise, strictly virtual reality headsets are expected to decline.” Brands and developers are increasingly turning towards augmented reality to meet the evolving demands of consumers.
In terms of market leadership, Meta maintained its top position, with Apple securing the second spot following its recent debut. Other key players in the market include ByteDance, Xreal, and HTC. While premium models like the Quest 3 and Vision Pro have driven up the market’s ASP, there are still a variety of lower-cost VR and ER devices available to consumers.
Looking ahead, IDC anticipates a recovery in the market, with headset shipments expected to grow by 7.5% later this year. This rebound will be fueled by the introduction of newer, more affordable devices. IDC projects a compound annual growth rate (CAGR) of 43.9% for headset shipments from 2024 to 2028, as the market continues to evolve and expand.
