Sales of augmented reality and virtual reality (AR/VR) headsets picked up steam in 1Q 2017, and growth should continue strong throughout 2017, according to a new AR-VR headsets forecast from IDC. Anticipating the launch of a lengthy list of new AR/VR products in 2H’17, IDC is forecasting the market for AR-VR headsets will exhibit triple-digit growth for the full year.

A total 2.3 million AR/VR headset units were shipped in 1Q. Nearly all – 98 percent – were VR headsets. Within the category, two-thirds of shipments were “screenless” viewers, such as Samsung’s Gear VR and Google’s Daydream View. Tethered VR headsets, such as HTC’s Vive, Oculus Rift and Sony’s PSVR, made up one-third of 1Q’s total VR headset shipments, IDC highlights.

Tech consumers are being cautious given the newness of AR/VR devices. Furthermore, lack of content, as opposed to commercial-quality devices and equipment, is constraining growth from reaching even higher levels.

“The VR market is still very young and consumers seem to be taking a cautious approach,” explained Jitesh Ubrani, senior research analyst for IDC’s Mobile Device Trackers. “With plenty of headset options already in the market and even more coming soon, hardware isn’t the issue.

“The bigger challenge is the slow growth in content that appeals to a mass audience, combined with the confusion associated with a lack of cross-platform support.”

Shipments of AR headsets surged 77.4 percent higher year-over-year in 1Q’17. New product introductions and expanding distribution of existing AR headset models fueled growth, IDC says.

AR-VR Headsets Forecast

“It’s very early days in terms of augmented reality headsets, with the vast majority of products shipping into the market focused on getting hardware into the hands of developers,” said Tom Mainelli, vice president of Devices and AR/VR at IDC. “Meanwhile, we expect most consumers to experience their first taste of augmented reality through the cameras and screens of their existing mobile devices such as smartphones and tablets.”

Turning to AR/VR headset manufacturers, Samsung continued to set the pace, once again shipping the highest volumes in 1Q’17. Samsung shipped a total 489.5 thousand AR/VR units in 1Q for a 21. 5 percent market share. That said, Samsung was the only one of IDC’s top 5 AR/VR OEMs to experience a year-over-year decline, IDC pointed out.

The decline will amount to a blip in the longer term trend for Samsung’s AR/VR headset shipments, however, according to IDC, which attributed 1Q’s drop in large part to the lack of its flagship Note smartphone product line. Countering this, the recently released Gear VR with Controller is likely to boost Samsung’s AR/VR headset shipments and sales going forward, according to the market research provider.

Number 2 Sony shipped a total of 429.0 million AR/VR headsets in 1Q, good for an 18.8 percent share of market. Sony has been shipping its PlayStation VR headset for just two quarters, which makes for an auspicious start.

Sony controls its entire VR ecosystem across the large installed base of PlayStation 4s and the support of AAA games, IDC notes, which augurs well for its AR/VR headset business line and its standing in the market going forward.

Number 3 HTC shipped far fewer AR/VR headsets in 1Q than did the top 2 manufacturers. The total 190.9 million AR/VR headset units HTC shipped for the quarter amounted to an 8.4 percent market share.

That said, HTC Vive is a high-end solution for those willing to pay a premium price for the best experience, IDC points out. HTC Vive comes with motion controllers and outside-in (room-based) tracking right out of the box, for example.

HTC has also been having success in the commercial segment of the nascent AR/VR headset market. VR cafes are cropping up in countries around the world, IDC notes, particularly in Asia. Their success has led HTC to launch a commercial-friendly app store and subscription service. Those are things other AR/VR headset manufacturers are trying to duplicate, according to the market research company.

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