NEEDHAM, Mass.—While augmented reality and virtual reality gear has generally been a disappointing consumer category, the International Data Corporation (IDC) is reporting that as macroeconomic pressures eased and new products launched, the global market for augmented reality and virtual reality (AR/VR) headsets grew 130.4% year over year during the fourth quarter of 2023 (4Q23).
The new data from the IDC Worldwide Quarterly Augmented and Virtual Reality Headset Tracker predates the launch of Apple Vision Pro, making it a particularly hopeful sign for the future of the category.
But for the full year of 2023, shipments of AR/VR headsets were down 23.5% from 2022 levels. Macroeconomic uncertainty put downward pressure on demand during the first half of the year and most companies relied on legacy products that had already been available for at least a year, leading to double-digit declines. It was not until key regions began seeing economic recovery and new products were launched that the market started to rebound, but not enough to offset the first half declines, the researchers reported.
"After losing share to Pico and later Sony a few quarters ago, Meta's share has been on a steady climb thanks to its ongoing subsidization of hardware and the launch of the Quest 3," said Jitesh Ubrani, research manager, Mobility and Consumer Device Trackers at IDC. "While Apple's entrance as well as newer devices from other vendors in this space certainly adds pressure, Meta's lead will likely remain unchallenged during the year as the company's low-cost, high-volume strategy will separate it from the rest of the pack."
