The global market for augmented reality (AR) and virtual reality (VR) headsets has faced a substantial decline, with shipments plummeting by 67.4% in the first quarter of 2024, as reported by the International Data Corporation (IDC). This decline was expected as the industry shifts towards newer technologies like Mixed Reality (MR) and Extended Reality (ER).
Market Evolution and New Realities
As the AR and VR sectors evolve, IDC has updated its classification to include MR and ER, reflecting the industry’s expansion into these new areas. MR technology overlays digital information onto the real world through cameras, while ER extends digital content onto transparent displays, offering a unique visual experience. Despite the overall drop in shipments, there has been a noticeable increase in the average selling price (ASP) of these devices, surpassing $1000, largely due to high-end models introduced by Apple and Meta.
Leading Players and Price Trends
Meta remains the market leader, but Apple has quickly risen to second place with its recent launch. Other key players include ByteDance, Xreal, and HTC. These companies have been crucial in pushing the boundaries of what’s possible in MR and AR, although this has led to higher prices for consumers.
The rise in ASPs reflects the premium positioning of products like Apple’s Vision Pro and Meta’s Quest 3. However, the entry of more affordable models by Meta and HTC has helped keep a lid on further price increases. For more insights, check IDC’s full report on AR and VR market trends.
Future Outlook
Despite the current high prices, IDC predicts that costs will eventually decrease as the technology matures and more products enter the market. This price erosion is expected to make these advanced headsets more accessible to a broader audience, potentially leading to a market resurgence with a projected growth of 7.5% in shipment volumes over 2023.
