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. You can leave a response, or trackback from your own site.

Posted By Ben Wood On October 2nd, 2017

(There are no comments yet)
Leave a Comment

Hot News

Team Tweets

CCS Insight
After a turbulent 2017 with further operator consolidation and price-wars, the Indian #telecom market continues to…
Follow CCS Insight
Shaun Collins
More sedate timescales than we have seen from some telcos. There is still a long way to go with the 4G networks upg…
Follow Shaun
Ben Wood
Nice piece in @MobileNewsMag about Doro. Exciting time for Doro with Peter Marsden in charge and expansion into new…
Follow Ben
Martin Garner
RT @geoffblaber: China now the only regulatory obstacle to Qualcomm acquisition of NXP. Central to growth & defense from Broadcom https://t…
Follow Martin
Geoff Blaber
RT @martin_garner: More unhelpful AI vs. Man narrative from a Web giant - this time it's @alibaba. This does not move the world forwards wi…
Follow Geoff
Marina Koytcheva
RT @TheEconomist: The number of words a child hears before the age of five helps determine their future. One of our most popular videos of…
Follow Marina
Nicholas McQuire
@ItsBenCowell Hi Ben thanks for the opportunity. I am on the West Coast that week unfortunately.
Follow Nicholas
Paolo Pescatore
This looks like a comprehensive #UHD #4K offering from @CANAL_France @canalplusgroupe #LeDécodeurCanal…
Follow Paolo
Kester Mann
Consolidation was always the way ahead for Indian telcos. But tough challenges remain. Today's Daily Insight is wel…
Follow Kester
George Jijiashvili
RT @TheHorrorMaster: To Rotten Tomatoes, despite how it appears, I'm actually not dead.
Follow George
Laura Simeonova
RT @CCSInsight: Optimization for artificial intelligence defines competitiveness in mobile chipsets in 2019 and beyond #ccspredicts https:/…
Follow Laura
Katie Taylor
RT @guardianscience: Scientists make first ever attempt at gene editing inside the body
Follow Katie

Recent Blog Posts

Blog Post
India's Big Three Operator Consolidation Is Quickly Changing India's Wireless ... Read more
Blog Post
A Change of Pace LG Ditches the Yearly Phone Release Schedule For Samsung an... Read more
Blog Post
Just Friends Facebook Puts Friends First in News Feed Last week, Faceboo... Read more
More blog

Latest Company News

Blog Post
Expectations for CES 2018 The Big Trends to Watch at This Year's Show ... Read more
More news