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VR/AR device market crashed in 2023

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VR/AR device market crashed in 2023

Demand for virtual and augmented reality devices is pretty weak right now
(photo: CC0 Public Domain)

The volume of the global virtual (VR) and augmented (AR) headset market decreased by 54.4% in the first quarter of 2023, according to a new report from IDC. At the same time, analysts did not specify the number of shipments, but noted that VR devices occupy 96.2% of the total market.

According to IDC, the decline in the market is not surprising given the small number of manufacturers of AR/VR equipment, the lack of mass demand for such devices and the difficult macroeconomic environment.

‚ÄúDespite the recent downturn, it’s an exciting time for the AR/VR market as new players and next-generation headsets are expected to emerge in the coming weeks and months. With Sony becoming Meta’s main competitor, all eyes have been on Apple, which has yet to announce its headsets,” commented Jitesh Ubrani, an analyst at IDC

The sheer volume of Apple products and services already in use will certainly help the company differentiate its headsets from the products of other AR/VR vendors. But Apple’s market share growth may be limited given that the company’s expected device is aimed at the consumer segment and is expensive, Ubrani added.

The largest producer of virtual and augmented reality headsets in the first quarter of 2023 remains Meta with a share of almost 48%. In second place is the Japanese company Sony (35.9%), third is the Chinese ByteDance (6.1%). The top 5 market leaders in the AR/VR segment include the brands DPVR and HTC with shares below 2%.

IDC expects that in the coming years, the demand for AR/VR equipment will grow by more than 30% annually, and in 2026 the market will reach 35.1 million units.

According to the forecast, the highest growth rates in AR and VR spending will be recorded by emergency services (+82.9% year-on-year), augmented reality gaming (+57.8%), video recording (+47.8%) and cooperation (+ 42.7%). In 16 other areas, spending on virtual and augmented reality is expected to increase by more than 30% annually.

Standalone VR headsets (capable of playing content on their own without being connected to a smartphone or computer) will underperform in 2023 due to strong sales in 2020-2021. At the same time, the non-autonomous device category is likely to show growth, to largely due to weak sales in 2022, analysts say.

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