AR and VR devices will drop 18% to 7.45 mn: TrendForce

Shipments of AR and VR devices in 2023 will reach 7.45 million units, marking an 18.2 percent decrease compared to previous figures, according to TrendForce forecast.
VR headset and data consumptionThe majority of this decline is expected to be borne by VR devices, with projected shipments hovering around 6.67 million units. This decrease can primarily be attributed to lower-than-anticipated sales of newly released high-end VR devices.

As a result, manufacturers are likely to adjust their sales strategies by focusing more on cost-effective options. On the other hand, shipments of AR devices are expected to remain stable, surpassing 780,000 units. While Apple’s latest offerings may generate some demand, their high price tags continue to be a significant obstacle to broader market growth.

Two key factors contribute to the impending decline in VR shipments.

Firstly, brands may have overestimated the demand for their premium products. Despite these devices offering advanced features through advanced hardware and software, consumers are showing a reluctance to bear the associated higher costs. Instead, they are gravitating towards more affordable models this year.

Second, the shortage of appealing and cost-effective VR models in the market is worsening the downturn. Meta Quest 2 remains the market-leading VR product for this year, as the release of Meta Quest 3 has been delayed until 2024.

AR devices experienced a significant surge in shipments during 2020 and 2021, driven by the demand for remote communication solutions amid the pandemic.

Though Apple is expected to launch a new AR product in 2023, it will be targeted at developers and come with higher specifications, features, and costs. This, along with anticipated production challenges, is likely to restrict sales mainly to pre-orders this year. Shipment estimates are projected to fall short of 100,000 units, with total production potentially limited to 300,000 units.

TrendForce suggests that the VR and AR device market may face certain limitations between 2023 and 2025. While affordable VR devices could attract mainstream consumers, manufacturers might be deterred from making substantial investments in the VR market due to limited profitability.

Consequently, a shift towards AR devices and their corresponding applications appears more probable. The expansion of the AR device market relies on wider acceptance of consumer applications. The anticipated significant increase in VR and AR shipments, possibly reaching an annual growth rate of 40 percent, may not be realized until 2025.