Virtual Reality and Augmented Reality Device Sales to Hit $11.9 Billion and 99 Million Devices in 2021

Research firm forecasts 16 million virtual reality (VR) and augmented reality (AR) devices will be shipped in 2017, representing year-on-year growth of 47 percent. The market value of devices sold into the channel is estimated to be $1.6 billion.

Smartphone VR and AR devices will account for more than 13 million units; dedicated VR devices like the Oculus Rift will account for about two-thirds of this $1.6 billion market value.

Increased support for Google's Daydream platform and the arrival of Microsoft's mixed reality headsets will boost the market from the final quarter of 2017 onward.

London, 2 October 2017: Today technology research firm CCS Insight revealed its latest forecast of virtual reality and augmented reality devices, highlighting the sector's significant growth. Demand is growing well in this exciting technology area: CCS Insight expects 16 million VR and AR devices to be sold in 2017, a rise of 47 percent on the previous year.

Smartphone-based VR and AR devices continue to dominate the market thanks to their lower cost and wider availability. CCS Insight expects them to account for 13 million units of the 16 million total VR and AR devices shipped in 2017. Dedicated VR products, most of which come from the three biggest players — Facebook (Oculus), HTC (Vive) and Sony (PlayStation VR) — will account for 3 million units this year, rising to 5 million in 2018.

CCS Insight analyst George Jijiashvili notes: "The expected growth is encouraging progress, but it has not all been plain sailing. The three biggest makers of dedicated VR headsets all cut their prices this year in an effort to boost sales and grab a bigger slice of the market."

The research firm highlighted the effects of Microsoft-powered headsets from companies such as Acer, Asus, Dell, HP and Lenovo as well as greater support for Google's Daydream platform. It expects these products to provide a boost to the market in the fourth quarter of 2017 and create a strong foundation for sales in 2018.

According to CCS Insight's forecast, VR is showing considerably more potential in the Chinese market since its forecast update in 2016. This is a result of growing interest in the technology 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.

Content is playing an important role. Jijiashvili comments, "So far, many people have bought VR devices for gaming, but other material, including sports, film, TV and pornography, is now playing a bigger role in the market's growth". The growing availability of 360-degree material is underlined by Facebook's recent revelation that it now hosts 70 million 360-degree photos and 1 million 360-degree videos, and that the videos have generated 580 million views.

Augmented reality is another promising area identified by CCS Insight. The latest forecast provides an optimistic outlook for AR glasses. Apple's commitment to the technology on iPhones through its ARKit platform and the advent of Google's ARCore to Android smartphones are big factors in this. Although these platforms are only available on smartphones, CCS Insight believes that increased consumer awareness of AR they will generate will give a boost to the smart glasses market.

Jijiashvili notes, "AR experiences using a hand-held smartphone can only be a good thing for head-worn technology like AR glasses. It is only a matter of time before a big manufacturer offers a pair of smart glasses designed for consumers. We have a higher-volume scenario in the forecast based on a big company such as Amazon or Apple launching glasses. This could provide a huge lift to the segment in a similar way to Apple entering the smartwatch market".

In addition to this new consumer opportunity, CCS Insight believes that despite slower than expected growth in AR glasses for specific business uses such as warehousing and field service, there are numerous trials underway, with several companies planning to step up usage of AR glasses.

The chart below provides a snapshot of CCS Insight's VR and AR forecast.

Shipments of VR and AR devices by category, 2016-2021
Source: CCS Insight VR and AR Forecast, October 2017

Click on the image above for a larger version or click here for a PDF version.

Definitions:

  • 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.

Notes to editors

CCS Insight has provided a comprehensive 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.

About CCS Insight

CCS Insight is a global analyst company focussing on mobile communications and the Internet. It provides comprehensive services that are tailored to meet the needs of individual clients, helping them make sense of the connected world. Follow @CCSInsight on Twitter or learn more at www.ccsinsight.com.

For further information contact:
Hollie Bridgland
Harvard PR
Tel: + 44 (0)20 7861 2842
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