Global shipments of augmented reality (AR) and virtual reality (VR) headsets continued to decline in the second quarter of 2024 (2Q24), shrinking by 28.1% year over year to 1.1 million units, according to data from the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker. The market is expected to face a modest decline of 1.5% for the full year of 2024 but is projected to rebound with a significant 41.4% growth in 2025, driven by new technologies and more affordable devices.
The first quarter of 2024 was impacted by economic weakness, rising average selling prices (ASPs), and excess inventory, notably from Sony. While some of these challenges improved in the second quarter, prices remained elevated. Meta dominated the market with a 60.5% share, followed by Sony, Apple, ByteDance, and XREAL.
Jitesh Ubrani, research manager for Worldwide Mobile Device Trackers at IDC, highlighted that recent mixed reality (MR) headsets, such as Meta’s Quest 3 and Apple’s Vision Pro, have advanced in quality. However, the high cost of these devices has limited consumer access. Meta’s upcoming, more affordable version is expected to help drive market growth in the coming year.
Extended reality (ER) headsets are also poised for growth due to innovations in artificial intelligence (AI) and consumer-friendly designs. According to Ubrani, “The inclusion of AI and lighter, thinner designs is encouraging a new wave of startups and products targeting the ‘smart glasses’ space.”
Although augmented reality devices are anticipated to contribute to future growth, shipment volumes remain low due to production challenges, including cost, fidelity, battery life, and optics. Devices like the HoloLens may eventually give way to mixed reality headsets, which will offer similar use cases at a lower price.
IDC forecasts the AR/VR industry to grow from 6.7 million units in 2024 to 22.9 million units by 2028, with a compound annual growth rate (CAGR) of 36.3%. MR headsets are expected to lead the market, making up over 70% of the volume by 2028, while ER devices will account for over a quarter of the market.
A graphic illustrating IDC’s 2024–2028 forecast for AR, ER, MR, and VR headset shipments is available on IDC.com.
