Exploring the Evolution of AR/VR Market: CES Highlights and Future Prospects
The augmented reality/virtual reality (AR/VR) market has recently witnessed several product announcements at the Consumer Electronics Show (CES), sparking excitement and innovation in the industry. While XR technologies (short for augmented, mixed, and virtual reality) are still in the early stages of adoption, hardware manufacturers continue to strive for acceptance among businesses and consumers. CES showcased new mixed reality headsets, smart glasses, and Qualcomm’s processor, promising to power the next generation of AR/VR devices later this year.
According to Tuong Nguyen, an analyst at Gartner, these announcements at CES and in the broader AR/VR space contribute to market vitality and the necessary innovations for creating a comprehensive ecosystem that helps the industry evolve and increase adoption.
After the societal response to metaverse hype and related technologies in recent years, the sentiments seem to be shifting, starting with Apple’s announcement of Vision Pro headphones last summer. This was followed by the positive reception of Meta’s VR Quest 3 goggles and Ray-Ban’s smart glasses, reinvigorating public interest in virtual and mixed reality devices.
All of this comes after a challenging year for the market in 2023, with device shipments declining by 8.3% to a modest 8.1 million units, as reported by IDC. However, IDC analysts predict a sales rebound in 2024, forecasting a 46% growth compared to the previous year.
“We are still far from widespread adoption,” Nguyen remarked, emphasizing that the current market share of VR and AR headsets remains in the single digits. Overcoming hardware limitations is only part of the puzzle. The real challenge towards achieving early majority (let alone ubiquity) lies in the ecosystem of content, services, and applications.
The industry’s silver lining is that the devices entering the market can “spark interest and innovation” in the broader ecosystem, subsequently aiding the industry’s growth, according to Nguyen.
Apple Unveils Vision Pro Release Date
The biggest AR/VR announcement during CES did not take place at the trade show itself. Apple revealed the release date for its highly anticipated Vision Pro headphones in the United States, although dates for other countries are yet to be announced. The device is expected to launch in several other markets over the course of the year, including the United Kingdom and Canada.
“The most significant announcement in recent months is undoubtedly the Apple Vision Pro,” Nguyen stated. “Apple’s confirmation in the market has sparked, and will continue to spark, the emergence of competitors and other key suppliers to establish and grow the ecosystem needed for the success of augmented and virtual reality devices.”
Priced at $3499, the Vision Pro headphones are not targeted at the mass market. IDC analysts predict sales of approximately 200,000 units this year, with an initial focus on business clients. It is estimated that Apple will quickly sell out the first batch of devices, ranging from 60,000 to 80,000 units, according to a CNBC report last week.
Apple’s entry into spatial computing – the term used for mixed reality technology – is expected to significantly impact consumer interest. Avi Greengart, President and Chief Analyst at Techsponential, remarked, “Apple’s entry into spatial computing serves as a catalyst for the market, setting a target for competition to achieve or avoid.” While no direct comparable product has been announced yet, some products are in development. Other companies deliberately choose alternative development paths or niche markets to avoid direct competition with Apple.
Sony Showcases Unnamed 3D Content Creation Device
Sony’s VR ambitions have primarily focused on gaming thus far, but that is set to change in 2024. The company announced plans at CES to target business users with an unnamed mixed reality device designed for 3D content creation and collaboration among professionals in fields such as entertainment and engineering. Sony also revealed a partnership with Siemens to develop AR/VR services for the industry.
Sony’s unnamed device is a standalone VR headset featuring a 4K OLED display and video transparency similar to Meta Quest 3 and Vision Pro. It also incorporates two controllers that enable interaction with 3D objects in virtual environments: a pointer controller and a ring controller for manipulating 3D objects while retaining access to a physical keyboard. The device is set to hit the market in 2024, as announced by Sony. Nevertheless, according to ZDNet’s initial impressions comparing the headset to Vision Pro and Varjo’s XR-4, it will not be released as a standalone device. Instead, it will be sold as a package with Siemens NX Immersive Designer software (also announced at CES).
Sony’s unnamed device will utilize Qualcomm’s latest VR and AR chipset, the Snapdragon XR2+ Gen 2. Qualcomm officially introduced this processor, which it claims will enable the next generation of VR headsets, a week prior to CES.
Key improvements include support for high-resolution displays up to 4.3k pixels per eye (an increase from the previous generation XR2’s 3k), the inclusion of 12 simultaneous cameras (two more than its predecessor), and 12-millisecond full-color latency—an essential feature for mixed reality devices. These enhancements essentially put Qualcomm’s specifications in line with Vision Pro, providing some insight into what can be expected from Snapdragon XR2+ Gen 2 this year, as noted by CCS Insight analyst Leo Gebbie in a recent blog post.
It is highly likely that the Qualcomm chipset will also power the new headphones that Samsung is currently working on as part of a joint project with Google to create a mixed reality platform. The plan was announced at the beginning of 2023 but was put on hold after Apple’s Vision Pro announcement.
“The announcement that Samsung is working with Snapdragon XR2+ Gen 2 indicates that we
