Wearable watchers, CCS Insight, had good news and bad news for the virtual and augmented reality industry today. Sales are tanking but look! New hardware!

The report underlines just how much the industry has been driven by users of smartphone-based VR, which peaked at 8 million units in 2017 before plummeting to just 3 million in 2018. The net result is the total VR shipments in 2018 will actually end up less than 2017.

Smartphone-based VR, which has its roots in basic cardboard-style viewers into which a user slotted their phone, includes the likes of Samsung’s Gear VR. Users have initially been curious about these devices before emitting a global “meh” when presented with the things, even after deep discounting.

Hence the precipitous drop in unit shipments.

Tethered VR headsets, such as the Oculus Rift, the HTC Vive and Sony’s PS VR have faired better, assisted no doubt by some hefty price cuts. Sony’s product can be picked up for under £200, a good deal less than the £349 launch price, and remains the market leader. CCS reckon that such headsets will outpace their more limited cousins, shipping 5 million units in 2019, rising to 18 million in 2022.

However, the tethered VR market is, by its nature, self-limiting. You need a high-end PC in order to get the best out of a Rift or Vive or need a console in which to plug the thing (in the case of Sony) which increases the cost to the end user. As such, the devices appeal more to a dedicated gamer than a casual user.

Signs of hope

But all is not doom and gloom. Stand-alone VR is tipped to hit the big time in 2019, with 29 million of the wireless beauties expected to ship in 2022.

VR vendors, not least the Facebook-backed Oculus, hope so. The Oculus Quest is due to ship in 2019, free of the pesky wires and PC gear needed with the Rift. A cheaper tetherless variant, the Go, has already shipped.

CCS’s research points to promising movements in the China market, agreeing with earlier research from Canalys that the People’s Republic was skipping the tethered generation altogether.

Ben Dykes, of Brighton-based VR and Augmented Reality (AR) specialists makeREAL agreed, telling The Register “standalone VR things are a much better and cheaper proposition to using a phone. We have seen an increase in orders particularly for the Go” before observing “Quest will change everything in a few months again.”

AR devices, such as Microsoft’s HoloLens, remain a curiosity for users, with Redmond’s bet that the main use for the things would be in the workplace proving to be a canny one. Businesses have put the headsets to work in areas such as remote servicing and design applications. The US military has also got into the act, picking up 100,000 of the devices.

With version 2 of the headset due to ship next year, the future remains bright for HoloLens, if decidedly niche.

Of course, that niche could easily explode should someone like Apple blunder into the marketplace with smart glasses to set the fanbois a-swooning.

Otherwise, the research suggests that, following a blip this year, it will be steady-as-she-goes as combined VR and AR shipments climb to 52 million by 2022.

Source: The Register