New Forecast Shows Continued Growth in VR and AR Market

Device Shipments Will Near 100 Million Units in 2021


Today CCS Insight published its latest forecast update for virtual reality (VR) and augmented reality (AR) devices. Here we share some of the highlights.

In 2017, we expect that 16 million VR and AR devices will be shipped, representing growth of 47 percent year-on-year. The value of devices sold into the channel is estimated to be $1.6 billion.

It hasn't all been plain sailing for these technologies, but we anticipate that growth will continue over the next few years, with total shipments reaching nearly 100 million units in 2021.

Unsurprisingly, the market continues to be dominated by smartphone-based VR and AR devices, thanks to their lower cost and widespread availability. We expect them to account for 13 million units of the 16 million total devices sold in 2017.

When it comes to dedicated VR devices, we've seen 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. Our estimates indicate a combined volume of 3 million units for dedicated VR in 2017, rising to 5 million units in 2018.

We think 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.

Our forecast also reveals that China is showing signs of potential. We've raised our forecast expectations for this market, owing 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.

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 we're seeing growing momentum for other content genres including sports, film, TV and pornography. This is underlined by Facebook's recent revelation that it now hosts 1 million 360-degree videos, which have generated 580 million views.

Augmented reality is another hot topic and it's something we've regularly written about (see, for example, Parallel Realities). We believe this is an area 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, in our view, the growing use of AR experiences on a hand-held smartphone can only be a good thing for head-worn technology like AR glasses. We 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, we have provided 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.

We also see 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 our latest 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.

Full details of our forecast are available here to CCS Insight clients with a subscription to our virtual and augmented reality research. For more information about this service, please This e-mail address is being protected from spambots. You need JavaScript enabled to view it us.

This entry was posted on October 2nd, 2017 and is filed under Devices. You can follow any responses to this entry through the RSS 2.0 feed or you can leave a response.

Posted By Ben Wood On October 2nd, 2017


Comments
(There are no comments yet)
Leave a Comment

Hot News

Team Tweets

CCS Insight
In today's Daily Insight, @geoffblaber considers the role 5G will #play in the era of distributed computing: https://t.co/DOieUMsMrS
Follow CCS Insight
Shaun Collins
RT @geoffblaber: All set for Amazon’s first launch in its new horticultural golf balls https://t.co/OkuYmInMLy
Follow Shaun
Ben Wood
Oops. I mean by @shannonpareil - apologies Shannon (and @Tim)
Follow Ben
Martin Garner
@Qualcomm releases aptx Adaptive codec for Bluetooth audio. Good step forward so it gives the best audio quality it… https://t.co/Ek8n4706tS
Follow Martin
Geoff Blaber
RT @benwood: Ding. The Amazon microwave is ready via @FT. @Tim’s take on Amazon’s numerous product announcements today. Includes comments b…
Follow Geoff
Marina Koytcheva
Very important step in AI: understanding how software comes to conclusions. https://t.co/glObVBqcrh
Follow Marina
Nicholas McQuire
This is a great article on a leading edge company. Few firms are strategically deploying #AI at such scale at the m… https://t.co/f2FjFk7FO9
Follow Nicholas
Angela Ashenden
@Stolen_Empire @facebook @WorkplacebyFB We've got some new survey data coming out v soon, will share as soon as pos… https://t.co/FMbWW9dQFv
Follow Angela
Kester Mann
RT @CCSInsight: In today's Daily Insight, @geoffblaber considers the role 5G will #play in the era of distributed computing: https://t.co/D…
Follow Kester
George Jijiashvili
@geoffblaber https://t.co/If5VAguaYi
Follow George
Laura Simeonova
RT @benwood: P20 devices testament to Huawei's ambition in smartphone market. Consistently improving design, capabilities and appeal of its…
Follow Laura
Katie Taylor
Enjoying a #flexibleworking KIT day back at @CCSInsight
Follow Katie

Recent Blog Posts

Blog Post
Redefining the Network Edge with 5G The Role of 5G in the Age of Distributed Computing 5G promi... Read more
Blog Post
Trusting Watson Will IBM's Artificial Intelligence Moves Repair Bad PR? Nam... Read more
Blog Post
E-SIM: Friend or Foe? Is Remote Provisioning a Threat to Churn? Apple's unveiling... Read more
More blog

Latest Company News

Blog Post
Networks' Ambitions to Launch 5G Early Raise Global Forecast New CCS Insight forecast predicts 5G connections will reac... Read more
More news