Revenues from virtual reality headsets are expected to grow by nearly 62% in 2024 (TechInsights report)

TechInsights predicts that VR headset wholesale revenue will reach US$4.5 billion in 2023 and is expected to grow to nearly US$7.3 billion in 2024. This is mainly due to the rapid growth in average selling price (ASP) and the market moving towards headsets that provide higher quality experiences. Prior to 2017, lower-priced VR devices accounted for the majority of shipments and users, but as the market evolves toward devices that offer higher-quality experiences, higher-priced VR devices account for an increasing share. So while the standalone VR market has shrunk, consoles and standalone VR devices have become increasingly important. The release of Sony's PSVR 2 in particular has boosted the development of the console sector, while the release of Apple's Vision Pro devices will further increase average selling prices.

The global VR headset market performance in both 2022 and 2023 is worse than expected. Meta's poor performance in 2023 also had a downward impact on standalone VR in 2023, with market leader Meta's price cuts leading to a decline in the market's average selling price during the period. Meta has experienced a problematic 2022 and is experiencing a challenging 2023; due to its large market share, this has a significant impact on the entire market. The Oculus Pro didn't launch successfully, the Rift has been discontinued, and the Quest 2 is nearing the end of its product life cycle. We expect Meta to continue declining in 2023, despite the launch of the Quest 3, which may be affected by Apple's upcoming headset.

In this environment of high average selling prices, unfavorable macroeconomic conditions, increasing types of enterprise equipment, and limited consumer demand, Sony's PSVR 2 has become a bright spot, although TechInsights has also lowered its near-term forecasts.

TechInsights classifies various "mixed reality" headsets (such as Apple Vision Pro, Quest Pro, and Vive Focus) as virtual reality devices due to different form factors. In this case, the application scenarios of augmented reality are limited due to the lack of transparent displays, and we expect virtual reality to become the main application scenario. Apple plans to enter this niche market with relatively low sales volume and high average selling price in 2024, but starting in 2026, we expect that AR devices with transparent displays will be able to solve more application scenarios and capture market share

Content source: Financial Industry

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