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How Virtual Reality Technology Gained New Momentum

Worldwide shipments of Augmented Reality (AR) and Virtual Reality (VR) headsets grew to 2.3 million units in 1Q17, according to the latest market study by International Data Corporation (IDC). With more products scheduled to ship in the second half of 2017, IDC is forecasting triple-digit growth for the full year.

VR represented more than 98 percent of headsets shipped during the first quarter. Within VR, about two-thirds of all headset shipments were screen-less viewers -- such as Samsung Gear VR and Google Daydream View. Tethered VR headsets, such as the HTC Vive, Oculus Rift, and Sony PSVR, accounted for one third of the market.

AR and VR Market Development

"The VR market is still very young and consumers seem to be taking a cautious approach," said Jitesh Ubrani, senior research analyst at IDC. "With plenty of headset options already in the market and even more coming soon, hardware isn't the issue."

According to the IDC assessment, the bigger challenge continues to be the slow growth in AR/VR video content that appeals to a mass audience, combined with the confusion associated with a lack of cross-platform support.


That being said, AR headsets saw year-over-year shipment growth of 77.4 percent as new products began shipping and existing headsets expanded distribution to additional countries.

Augmented reality headsets are still an emerging market, with the vast majority of products focused on getting hardware into the hands of software content developers.

Meanwhile, IDC expects that most people will experience augmented reality first through the cameras and screens of their existing mobile devices -- such as smartphones and/or media tablets.

Outlook for AR and VR Vendor Opportunities

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.

Though Samsung was the only leading company to see an annual decline in shipments, IDC analysts expects this to be temporary as the decline was related to the absence of their Note line of phones.

Sony has only shipped its PlayStation VR headset for two quarters, but they have already found success. Sony controls its entire VR ecosystem, including the headset, game console, and content.

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.

Facebook was among the first premium products in the market with the Oculus Rift, though in recent months the company has faced a few challenges with 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.

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