Buzzworthy tech like Microsoft HoloLens and this summer's Pokémon-hunting mobile app sensation have helped put augmented reality (AR) on the map. But's virtual reality (VR), with its ability to drop users into entire virtual worlds, that will propel the market forward over the next few years.
IDC projects that the market for AR/VR headsets will jump from a combined 10.3 million units this year to 76 million in 2020, representing a five-year compound annual growth rate (CAGR) of 108.3 percent.
Falling prices and increased availability will help the VR side of the fence pull well ahead of AR, culminating in shipments of 61 million VR headsets by 2020 (a five-year CAGR of 196.4 percent) compared to 15 million AR headsets (a five-year CAGR of 100.7 percent). Those figures include screenless viewers, like Google Cardboard, head-mounted displays (HMDs) that are connected to a PC or other computing device and completely untethered HMDs that pack the components required for a standalone experience.
Tom Mainelli, program vice president for IDC Devices & AR/VR, said AR "represents the larger long-term opportunity, but for the near term virtual reality will capture the lion's share of shipments and media attention," in a press advisory. "This year we saw major VR product launches from key players such as Oculus, HTC, Sony, Samsung, and Google."
More products are on the way in 2017, ranging from affordable units that clamp onto smartphones to self-contained units.
"In the next 12 months, we’ll see a growing number of hardware vendors enter the space with products that cover the gamut from simple screenless viewers to tethered HMDs to standalone HMDs," continued Mainelli. "The AR/VR headset market promises to be an exciting space to watch."
Meanwhile, after making a splash this year, the market for AR solutions has some growing up to do, according to Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers.
"2016 has been a defining year for AR as millions of consumers were introduced to Pokémon Go and, on the commercial side, developers and businesses finally got their hands on coveted headsets like Microsoft's HoloLens," noted Ubrani. "AR may just be on track to create a shift in computing significant enough to rival the smartphone. However, the technology is still in its infancy and has a long runway ahead before reaching mass adoption."
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.