VR Headset Market Expected to Grow Despite Short-Term Decline, According to - IDC

VR Headset Market Expected to Grow Despite Short-Term Decline, According to
IDC

           FRAMINGHAM, Mass., September 16, 2020 – As the
           world continues to deal with the pandemic, the market for
           virtual reality (VR) headsets is expected to decline 6.7%
           in 2020 before returning to double-digit growth of 46.2%
           in 2021, according to the International Data Corporation
           (IDC) Quarterly Augmented and Virtual Reality Headset
           Tracker. The market has faced a temporary setback this year
           as supply chain disruptions impacted volumes in the early
           months and expected product transitions have slowed the
           market mid-year. However, IDC expects shipments of VR
           headsets to grow rapidly with a compound annual growth
           rate (CAGR) of 48% from 2020 to 2024 as consumer and
           enterprise audiences continue to invest in the technology.

           Virtual reality is starting to mature and reach a broader
           audience. "While gaming remains at the forefront of
           consumer VR, other use cases such as virtual concerts and
           virtual workouts are also starting to resonate with buyers,"
           said Jitesh Ubrani, research manager for IDC's Mobile Device
           Trackers. "Meanwhile, many enterprises continue to ramp
           up their use of VR with training, collaboration, design, and
           manufacturing use cases driving momentum. We expect
           the commercial segment to grow from 38% of the worldwide
           market in 2020 to 53% by 2024."

           "We're seeing increased interest in VR from both consumer
           and commercial buyers," said Tom Mainelli, group vice
           president, Device & Consumer Research at IDC. "However,
           a confluence of events made for a tough first half of 2020 in
           terms of headset unit volumes, even as demand increased.
           We expect a sizeable increase in shipment volume during
           the second half of this year as production ramps up and new
           products launch into the market, and VR should see a return
           to robust growth in 2021."

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Category Highlights

Standalone VR declined as a
category in the second quarter
of 2020 (2Q20) despite growing
awareness and high demand
for headsets such as the Oculus
Quest. Facebook finds itself in a
precarious position. As the leader
in the standalone category, the
company's share far exceeds that
of every other player combined,
though the recent discontinuation
of the Oculus Go will likely lead to
Facebook ceding some share at
the entry level of standalone VR.
Meanwhile, companies such as
Pico, Lenovo, and others continue
to court the enterprise market.

Tethered VR headsets also
declined during the quarter
although this was largely driven
by the slowdown in PlaystationVR
as consumers look forward to
the next-generation Playstation
console and a possible refresh
of Sony's popular VR headset.
Other popular tethered headsets
such as the Rift S and the HTC
Vive family continued to see
volume declines as both consumer
and commercial buyers allocate
spend in other areas this year.
That said, there's still a place
in the market for tethered VR,
which tends to drive a higher-
quality visual experience than
standalone products. Upcoming
product launches such as HP's
new Reverb G2 should help drive
a rebound in 2021.

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Screenless Viewers have
continued to decline in popularity
and are mainly sold in emerging
markets where local vendors try
to attract first-time VR users with
basic headsets that leverage
the screen of their smartphone.
However, the lack of content and
toy-like experience prevents the
category from achieving further
success, and we expect volumes
to continue to wind down through
the forecast period.

Figure 1

Figure 2

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About IDC

International Data Corporation
(IDC) is the premier global
provider of market intelligence,
advisory services, and events

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                             - 5-

For more information contact:
Jitesh Ubrani
jubrani@idc.com
416-873-0315
Michael Shirer
press@idc.com
508-935-4200
Tom Mainelli
tmainelli@idc.com
650-350-6455

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