In its latest forecast for update for virtual reality (VR) and augmented reality (AR) devices, research firm CCS Insight expects 16 million VR and AR devices to be shipped in 2017, representing growth of 47 percent year-on-year. It anticipates continued growth over the next few years, with total shipments reaching nearly 100 million units in 2021.
The value of devices sold into the channel is estimated to be $1.6 billion. The market continues to be dominated by smartphone-based VR and AR devices, thanks to their lower cost and widespread availability. It’s thought they account for 13 million units of the 16 million total devices sold in 2017. When it comes to dedicated VR devices, Facebook (Oculus), HTC (Vive) and Sony (PlayStation) all cut their prices in an effort to boost sales and grab a bigger slice of the market. CCS estimates indicate a combined volume of three million units for dedicated VR in 2017, rising to five million units in 2018. It says the category will benefit from the introduction of Microsoft-powered headsets from companies such as Acer, Asus, Dell, HP and Lenovo, with Microsoft putting some serious marketing muscle behind these products in the run up to Christmas and beyond. China is showing signs of potential, with the forecast expectations raised for this market, due to the growing interest in VR from large Chinese companies such as Alibaba, which has offered shopping by VR, and Tencent, which is expected to launch its own VR headset. Furthermore, there are many gamers in the Chinese market who have PCs capable of supporting the new range of Microsoft-powered headsets.
VR and AR content growing too, and smart glasses on the way
There’s also a growing array of VR and AR content available. To date, a lot of VR devices have been bought for gaming, but there’s growing momentum for other content genres including sports, film, TV and pornography. This is underlined by Facebook’s recent revelation that it now hosts one million 360-degree videos, which have generated 580 million views.
Augmented reality is another hot topic that has a promising future. Apple’s commitment to the technology on iPhones through its ARKit platform and the advent of Google’s ARCore on Android smartphones are big factors in this.
Although these platforms are currently only available on smartphones, the growing use of AR experiences on a hand-held smartphone can only be a good thing for head-worn technology like AR glasses. CCS Insight think it’s only a matter of time before a big manufacturer offers a pair of smart glasses designed for consumers.
As with many of CCS Insight’s forecasts, it provides low and high scenarios describing possible outcomes. The high scenario is based on the assumption that a company such as Amazon or Apple will join the AR glasses party. This could offer a huge boost to the segment in a similar way to when Apple entered the smartwatch segment.
The analyst firm also sees continued, steady growth for AR glasses in specific business applications such as warehousing and field service. With numerous trials underway, it’s only a matter of time before pilots turn to bigger trials and then full-scale deployment.
The chart below offers a snapshot of its latest VR and AR forecast:
- Smartphone virtual and augmented reality: Devices providing a fully immersive VR experience or an AR experience by using the screen and processing power of a smartphone, which is inserted into the device.
- Dedicated virtual reality: Devices that offer a fully immersive experience enhanced by additional sensors, cameras and controllers. They are further split into tethered and stand-alone devices.
- Augmented reality smart glasses: Devices that overlay information from a smartphone onto the user’s field of vision.
- Enhanced augmented reality: Enhanced augmented reality headsets place virtual objects in the real world and allow users to interact with them through gestures and voice commands.
CCS Insight has provided a forecast of the VR and AR devices market for more than three years. This forecast is part of a broader suite of research services including an extensive database of over 80 VR and AR products, regular reports and monthly updates on the latest industry-related developments.