The augmented reality and virtual reality markets experienced a poor first quarter of 2018, but a rebound is expected, according to an AR-VR forecast from IDC. The category was down 30.5% year over year, with 1.2 million units shipped. There is an extenuating factor, however.

IDC says that much of the decline was due to the unbundling of screenless VR headsets. For much of last year, screenless headsets were bundled with high-end smartphones. That ended toward the end of last year. IDC said that the market will return to growth as more vendors pursue the AR and VR sectors and as inexpensive standalone headsets such as Oculus Go hit the stores.

Overall, the market will grow to 8.9 million units this year, which will outpace 2017 by 6%, researchers said. Shipments will reach 65.9 million units by 2022.

AR-VR Forecast
There is optimism for both VR and AR despite the bad quarter.

“On the VR front, devices such as the Oculus Go seem promising not because Facebook has solved all the issues surrounding VR, but rather because they are helping to set customer expectations for VR headsets in the future,” Jitesh Ubrani, the senior research analyst for IDC Mobile Device Trackers, said in a press release. “Looking ahead, consumers can expect easier-to-use devices at lower price points. Combine that with a growing lineup of content from game makers, Hollywood studios, and even vocational training institutions, and we see a brighter future for the adoption of virtual reality.”

The ecosystem is strong in the AR sector. “Momentum around augmented reality continues to grow as more companies enter the space and begin the work necessary to create the software and services that will drive AR hardware,” Tom Mainelli, IDC’s program vice president for Devices and Augmented and Virtual Reality said in the press release. “Industry watchers are eager to see new headsets ship from the likes of Magic Leap, Microsoft, and others. But for those devices to fulfill their promise we need developers creating the next-generation of applications that will drive new experiences on both the consumer and commercial sides of the market.”

The market contours will change between now and 2022, researchers said. In both AR and VR, screenless viewers will shrink in percentage while standalone and head-mounted devices will increase, they noted.

IDC has moderated its upbeat long-term forecast somewhat. In March, it said that 68.9 million AR and VR headsets would ship by 2022.

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