The global VR headset market grew by 241.6% year-on-year in the first quarter of this year, according to the latest market intelligence data. Virtual reality (VR) headset shipments are expected to hit 13.9M units for the year as a whole.
But next year is expected to be the crucial one for the VR and augmented reality (AR) sector, as Apple enters the market …
IDC says that Facebook parent company Meta current dominates the VR market, but its current business model isn’t sustainable.
Meta furthered its share, capturing 90% of the market as the Quest 2 remains immensely popular and Meta continues to offer more exclusive content while subsidizing hardware.
Following Meta was ByteDance’s Pico with 4.5% share. While Pico has largely operated within China’s borders, it has maintained a presence in many global markets though this has primarily occurred in the commercial segment. Recent expansion into many European countries as well as a growing library of consumer-friendly content should help the company attract a larger audience in the coming quarters.
DPVR, HTC, and iQIYI rounded out the top 5 companies with less than 4% share combined.
“Meta continues to pour dollars into developing the metaverse but the strategy of promoting low-cost hardware at the expense of profitability isn’t sustainable in the long run,” said Jitesh Ubrani, research manager for IDC Mobility and Consumer Device Trackers.
The firm says that moving into the business sector, and more sophisticated consumer headsets, may be the answer.
The good news is that the upcoming productivity-oriented headset from Meta will serve as the starting point for the company’s pivot towards higher revenue generating hardware and will also help provide an uplift in end-user pricing for the entire industry as average selling prices creep up and the tech substantially improves.
But Apple is the company everyone will be watching next year, as it launches a mixed-reality headset (VR and AR combined).
“All eyes will be on Apple as it launches its first headset next year, and while it is tempting to imagine the company shipping high volumes, keep in mind that this is its first headset that will appeal primarily to a small audience of early adopters and Apple fans,” noted Ramon Llamas, research director with IDC’s Augmented and Virtual Reality team.
“Further iterations will likely show evolution that will grow by leaps and bounds. In the meantime, companies like Meta and Sony already have a strong installed base and pent-up demand that they can tap into. Altogether, this is a strong driver to push the market forward.”
One thing Apple will change for sure is the average selling price (ASP). This is expected to peak sharply as the Cupertino company enters the market, before gradually falling back to more affordable levels over the following years.
Apple is expected to announce its VR headset early next year, possibly as early as January.
Apple has enlisted Hollywood directors such as Jon Favreau to develop video content for this Mixed Reality headset, which is expected to ship next year.
Favreau is the executive producer of the new limited series Prehistoric Planet on Apple TV+. According to three people familiar with the matter, he’s “working to bring that show’s dinosaurs to life on the headset, which looks like a pair of ski goggles and aims to offer virtual- and augmented-reality experiences.”
This is expected to be followed by a more affordable model, with AR-focused Apple Glasses believed to be the iPhone maker’s longer-term goal.
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