AR/VR headsets will be all the rage for businesses in 2018

The world is experimenting with augmented reality (AR) and virtual reality (VR) applications in different industries.

Whether it’s Macy’s using AR to improve customer experience, Sotheby’s relying on VR to help buyers view properties in other parts of the world, or CAE Healthcare building a childbirth simulator with AR for clinical team training – the digital reality solutions are everywhere.

“There has been a maturation of content and delivery as top-tier content providers enter the AR and VR space,” said Jitesh Ubrani, Senior Research Analyst, IDC Mobile Device Trackers.

According to a report by IDC, worldwide shipments for AR and VR headsets will grow to 68.9 million units in 2022 with a five-year compound annual growth rate (CAGR) of 52.5 percent.

Further, despite the weakness the market experienced in 2017, IDC anticipates a return to growth in 2018 with total combined AR/VR volumes reaching 12.4 million units, marking a year-over-year increase of 48.5 percent as new vendors, new use cases, and new business models emerge.

The worldwide AR/VR headset market retreated in 2017 primarily due to a decline in shipments of screenless VR viewers. Previous champions of this form factor stopped bundling these headsets with smartphones and consumers have shown little interest in purchasing such headsets separately.

While the screenless VR category is waning, Lenovo’s successful fourth quarter launch of the Star Wars: Jedi Challenges (Lenovo Mirage AR headset)—a screenless viewer for AR—showed the form factor may still have legs if paired with the right content.

Other new product launches during the quarter included the first Windows Mixed Reality VR tethered headsets with entries from Acer, ASUS, Dell, Fujitsu, HP, Lenovo, and Samsung.

“Meanwhile, on the hardware side, numerous vendors are experimenting with new financing options and different revenue models to make the headsets, along with the accompanying hardware and software, more accessible to consumers and enterprises alike,” explained Ubrani.

In 2018, IDC expects the VR headset market to rebound as new devices such as Facebook’s Oculus Go, HTC’s Vive Pro, and Lenovo’s Mirage Solo with Daydream ship into the market with new capabilities and new price points.

Meanwhile, with the exception of screenless viewers, AR headsets are likely to remain largely commercially focused until later in the forecast due to the technology’s high cost and complexity.

While there’s no doubt that VR suffered some setbacks in 2017, companies such as Google and Facebook continue to push hard toward making the technology more consumer-friendly.

“Meanwhile, Lenovo’s success with its first consumer-focused AR product shows that consumers are beginning to understand what augmented reality is and the experiences it can provide. This bodes well for the category long term,” said Tom Mainelli, Program Vice President, Devices & AR/VR Research, IDC.