Virtual and augmented reality headset shipments ready to soar, says CCS report
Leo Gebbie of CCS Insight
The market for virtual reality (VR) and augmented reality (AR) devices is on the brink of taking off, according to a new forecast by global technology analyst firm CCS Insight.
The company projects a 76% yearly rise in the number of devices shipped in 2019 to 14.7 million units, and steep growth to 75 million units at a value of US$13 billion (€11.7 billion) in 2023.
The bright outlook comes after a sales dip in VR headsets in 2018, as smartphone VR devices (with a plastic shell into which a smartphone is inserted) exhausted their initial appeal. High-end tethered devices like the Oculus Rift, HTC Vive and Sony PlayStation VR attracted some consumers, but their premium pricing, especially when combined with a high-end PC or console, proved prohibitive for many.
However, Leo Gebbie, senior analyst for VR and AR at CCS Insight, notes, “We believe the time is right for standalone devices such as the Oculus Go and Oculus Quest to take the market by storm. With no need for a secondary device such as a PC, smartphone or games console, standalone VR is making the technology more accessible than ever. We’re absolutely convinced the market is picking up momentum”.
CCS Insight’s latest forecast backs this up, indicating that standalone VR headsets will outsell traditional tethered devices in 2019, and it is this product design that will be responsible for fuelling the VR market within the forecast period.
The analyst firm’s optimism is supported by findings from its recent consumer survey of over 2,000 owners and potential buyers of VR devices in the US and UK. The research revealed that 60% of owners describe themselves as very satisfied with their VR headset, with 59% of owners giving it a net promoter score of at least nine out of 10, indicating they are highly likely to recommend a VR headset to friends and family.
Gebbie continues, “VR headsets are on an upward trajectory. Many VR owners we surveyed own more than one headset and 57% of them plan to buy another in the next 24 months. That’s a sure sign this is a market poised for some strong growth in the next few years”.
CCS Insight also interviewed technology enthusiasts who do not currently own a VR headset, and their responses showed significant interest in buying in the next couple of years. Gebbie comments, “Ultimately the adoption curve seems to come down to price, as 70% of the technology enthusiasts in our study have considered buying a VR device in the past, but were put off by price. The fact that 55% of these respondents said that lower prices would make them reconsider buying a VR headset is promising news for companies such as Facebook-owned Oculus, HTC, Sony, Samsung and others, particularly as headsets start hitting the $200 (or €200 or £200) sweet spot”.
Gebbie observes, “More VR headsets means more developers will be motivated to deliver even more attractive content, which is key to the future success of this device category. Titles such as Beat Saber by Beat Games have been a game-changer for the VR market, delivering an incredibly immersive and superaddictive experience and we expect more to follow”.
CCS Insight’s forecast and survey also cover AR devices, a segment that the research firm also expects to grow. Gebbie adds, “Currently, most of the growth in AR devices is coming from the enterprise space, as companies experiment with the technology in numerous areas such as healthcare, training, education, collaboration and more. They’ve gone from early trials with one or two units to deployments of several hundred devices in areas such as field service”.
CCS Insight projects shipments of AR glasses to surpass 150,000 units in 2019, and to reach 2.7 million in 2023. In addition, it expects AR smart glasses to start gaining traction with consumers within the next few years.
The consumer survey asked existing VR headset owners if they would consider buying AR glasses in the next three years, and about three quarters said they would. Gebbie concludes, “If a heavyweight in consumer electronics like Apple or Samsung gets behind smart glasses it could kick-start the market. Our most optimistic scenario envisions the global market for smart glasses to exceed 4 million units in 2023”.
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