XR Gets Apple Boost, Market Set to Bounce Back in 2024

Extended Reality (XR) headset shipments are projected to increase by a record 3.9 million units in 2024 to clock a high double-digit YoY growth, according to a forecast by Counterpoint Research. Apple’s Vision Pro, which hit the stores two weeks ago, will generate user interest and industry movement which will benefit incumbents. 2024 will also carry forward the momentum from 2023, marked by several launches from major players like Meta and Sony.

“Apple’s highly-anticipated entry into the XR space has long been expected to mark a watershed moment for the industry. However, we expect Apple to sell about half a million units of Vision Pro, its $3,500 mixed reality (MR) headset, in 2024. This makes up a low single-digit share of the 2024 global XR market,“ said Harmeet Singh Walia, Senior Analyst at Counterpoint Research.

“The first iteration of the Vision Pro headset will primarily attract die-hard Apple fans, developers, early adopters, and enterprise users. A more optimistic scenario could unfold if Apple successfully boosts the supply of key components for the headset and experiences higher-than-expected interest from the end market. Moreover, the consumer interest Apple’s entry is generating will benefit market incumbents offering competitively priced headsets, towards which many enthusiasts who wish to try the technology without incurring Apple’s hefty price tag would gravitate, boosting the global XR market,” added Walia.

2024 will see the continuation of another trend – the transition from pure virtual reality (VR) to MR as major players, both existing and upcoming, rush to launch MR products or add passthrough to successors of their pre-existing headsets. Since Counterpoint considers such headsets as part of its VR category, it remains dominant. The standalone form factor is preferred and is likely to remain so despite Apple’s Vision Pro requiring a wired connection with an external battery case.

AR is projected to grow by 54% YoY in 2024, bucking the trend of three years of consecutive declines. This growth will be driven by XREAL’s Air 2 and Air 2 Pro AR Glasses, which quickly became the best-selling AR glasses in China. Besides XREAL, which targets the larger consumer segment, AR will be driven by high-spec and high-price products in the niche enterprise segment. At just about 2%, AR, however, will remain a small contributor to overall XR shipments.

Samsung’s re-entry into the segment, likely with an MR headset in 2024, will also generate traction, but regardless of its launch price, it will contribute less than Apple to global shipment growth due to a late-year launch. Pico, owned by TikTok’s parent ByteDance, is unlikely to fully recover from the setbacks its latest Pico 4 suffered in 2023. DPVR, another major Chinese player, while remaining strong in the Chinese education sector, will struggle to break out as a major global player despite having launched E4, its gaming PC VR headset.