Worldwide shipments for augmented reality (AR) and virtual reality (VR) headsets will grow to 68.9 million units by 2022, according to an AR/VR headsets forecast from research firm International Data Corporation. That represents a five-year compound annual growth rate (CAGR) of 52.5%.

The market for these devices was weak in 2017, yet IDC anticipates a return to strong growth this year, with total combined AR/VR volumes reaching 12.4 million units, marking a year-over-year increase of 48.5% as new vendors, new use case, and new business models emerge.

Last year’s decline was primarily due to a drop in shipments of screenless VR viewers. Previous proponents of this form factor stopped bundling these headsets with smartphones and consumers have shown little interest in purchasing such headsets separately.

AR/VR Headsets Forecast
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 that the form factor may still have legs if paired with the right content, according to IDC. 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 Ubrani, IDC senior research analyst for mobile device trackers, in a prepared statement.  “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.”

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. 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.

Image courtesy of flickr user Nan Palmero.