Shipments of AR/VR Headsets Decline Sharply in 2022
The pendulum for AR/VR headsets swung the other way through the course of 2022 as global shipments declined 20.9% year over year to 8.8 million units, according to IDC. The decline was not completely unexpected, however, given the limited number of vendors in the market, a challenging macroeconomic environment, and a lack of mass market adoption from consumers.
The results for 2022 were also hindered by difficult comparisons to the prior year when the market was bolstered by Meta's Quest 2 and strong spending by consumers stuck at home with disposable income for entertainment. As the Quest 2 approached its second anniversary and as global economies opened up, consumer and business spending shifted away from AR and VR headsets leading to the decline in 2022.
Despite the downturn, the overall market was led by Meta with nearly 80% share. In second place was ByteDance (Pico) with a 10% share as the company continued to ramp up its product portfolio and focus on markets where Meta was notably absent or a lesser-known brand. The remaining top 5 spots were held by DPVR, HTC, and iQIYI. One other notable company was Nreal which captured the sixth position amongst AR/VR headsets but held the top spot in the AR market by shipping nearly 100K units in 2022.
"While Meta and ByteDance duke it out in the VR segment, Nreal has been able to slowly grow its presence by appealing to mobile gamers," said Jitesh Ubrani, research manager, Mobility and Consumer Device Trackers at IDC. "Though it's still early days for AR and VR, Meta has been able to build a moat for itself through its various first- and third-party content. This is where other players such as Sony and potentially Apple can provide meaningful competition though, in the long run, it'll put pressure on others including ByteDance and Nreal."
"Another area that is slowly gaining attention is mixed reality – devices that can switch between augmented and virtual reality," added Ramon T. Llamas, research director for Mobile Devices and AR/VR at IDC. "The release of the Meta Quest Pro last fall and the announcement of HTC's XE Elite earlier this year demonstrate clear innovation as to what is possible for the ARVR market, and it should not be difficult to imagine others following suit. Moreover, commercial users with multiple use cases – ranging from onboarding and orientation to training and collaboration – may gravitate to its appeal. However, given the still low penetration of AR and VR into the market, it may take several cycles for mixed reality headsets to gain salience."