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Thursday, June 01, 2017
Shipments of AR/VR Headsets Gain Momentum


Worldwide shipments of Augmented Reality (AR) and Virtual Reality (VR) headsets continued to soar with a total of 2.3 million units shipped in the first quarter of 2017 (1Q17), according to IDC.

With a long list of new products scheduled to ship in the second half of 2017, IDC is forecasting triple-digit growth for the full year.

VR represented the vast majority (more than 98%) of headsets shipped during the first quarter. Within VR, about two-thirds of all headset shipments were screenless viewers, such as Samsung's Gear VR and Google's Daydream View. Meanwhile, tethered VR headsets, such as the HTC Vive, Oculus Rift, and Sony's PSVR, accounted for one third of the market.

"The VR market is still very young and consumers seem to be taking a cautious approach," said Jitesh Ubrani senior research analyst for IDC's Mobile Device Trackers. "With plenty of headset options already in the market and even more coming soon, hardware isn't the issue. The bigger challenge is the slow growth in content that appeals to a mass audience, combined with the confusion associated with a lack of cross-platform support."

AR headsets saw year-over-year shipment growth of 77.4% as new products began shipping and existing headsets expanded distribution to additional countries. "It's very early days in terms of augmented reality headsets, with the vast majority of products shipping into the market focused on getting hardware into the hands of developers," said Tom Mainelli, vice president of Devices and AR/VR at IDC.

Top 5 Worldwide AR and VR Headset Companies, Shipments and Market Share, Q1 2017 (shipments in thousands)

Company

1Q17 Shipments

1Q17 Market Share

1. Samsung

489.5

21.5%

2. Sony

429.0

18.8%

3. HTC

190.9

8.4%

4. Facebook

99.3

4.4%

5. TCL

91.3

4.0%

Others

980.0

43.0%

Total

2280.0

100.0%

Source: IDC Worldwide AR/VR Headset Tracker

Samsung continued to drive the highest shipment volumes in the market with its Gear VR headset. Samsung's large distribution network and its partnership with Oculus has allowed the company to take the lead in the market. Though it was the only company in the top 5 to see an annual decline in shipments, IDC expects this to be temporary as the decline was largely tied to the absence of their flagship Note line of phones. The recently released Gear VR with Controller provides a welcome update to the headset and will likely bode well for Samsung moving forward.

Sony has only shipped its PlayStation VR headset for two quarters, but the company has already found its way into the top 5. Sony controls its entire VR ecosystem, including the headset, game console, and content. With a large installed base of PlayStation 4s and the support of AAA games, Sony will likely remain a leader in the near term.

With motion controllers and outside-in (room based) tracking right out of the box, the HTC Vive has provided a high-end solution for those willing to pay a premium for the best experience. Outside of the consumer market, HTC has enjoyed success in the commercial space as VR cafes have been popping up around the world, particularly in Asia. This success has also led the company to launch a commercial-friendly app store and subscription model, something other VR headset providers are trying to replicate.

Facebook was among the first premium products in the market with the Oculus Rift, though in recent months the company has faced a few hiccups in terms of retail space. However, with the addition of touch controllers, improved room-scale tracking, and a price drop from $599 to $499, IDC believes Oculus will continue to provide a compelling alternative for VR enthusiasts.

TCL rounded out the top five with the Alcatel VR headset that it bundles with Alcatel Idol 4/s smartphones. Despite notable shipment volumes, the company faces challenges due to a limited platform that largely relies on existing Cardboard apps and Littlstar (a third-party VR video company) to provide apps, games, and videos for their headset. Without control over the content and with limited distribution and compatibility, TCL/Alcatel's VR ambitions will likely face an uphill battle in the coming quarters.



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