• Global VR headset shipments in Q3 2024 fell 4% YoY and 16% QoQ, marking the third consecutive quarter of declines.
• Meta maintained its market dominance, despite a decline in its Q3 2024 market share as consumers awaited the release of the upcoming Meta Quest 3S.
• Apple Vision Pro shipments saw sequential growth in Q3 following its international expansion. However, international market hype also appeared short-lived.
• The VR market faces ongoing challenges due to hardware limitations and slow cost reductions. These issues are unlikely to be resolved soon, leading to continued stagnation.
• In contrast, the AR+AI smart glasses segment is set to grow in 2025, driven by Generative AI advancements, the introduction of Android XR OS, and new entries from major tech companies.

Seoul, Beijing, Buenos Aires, Fort Collins, Hong Kong, London, New Delhi, Taipei, Tokyo – December 27, 2024

Global Virtual Reality (VR) headset shipments fell 4% YoY and 16% QoQ in Q3 2024, the market’s third consecutive quarter of declines, according to Counterpoint’s Global XR (AR/VR) Headset Model Tracker. The decrease was primarily due to a 50% YoY drop in the tethered VR headset segment during the quarter. In contrast, the standalone VR headset segment grew by 14% YoY.

Meta remained its dominance in the global VR market with a 65% market share in Q3 2024. However, its share declined compared to the previous quarter due to reduced sales of the Meta Quest 3, as consumers awaited the launch of the more affordable Meta Quest 3S.

Apple’s Vision Pro shipments doubled QoQ following its international launch in China, Europe, and APAC. However, Apple’s recovery is expected to be short-lived, with a sequential decline expected in Q4 2024 as the initial international market hype diminishes. Counterpoint expects international sales to account for nearly 90% of Apple’s total shipments in H2 2024.

Pico’s shipments dipped 2% YoY but grew 6% QoQ, driven by the launch of the Pico 4 Ultra in China and Europe and stronger demand for its enterprise headsets from the large-space VR tourism and entertainment projects in China. Sony’s shipments fell 29% YoY but more than doubled QoQ boosted by its PC adapter launch and promotional campaigns in North America and Europe. DPVR recorded impressive 67% YoY and 14% QoQ growth, supported by resilient enterprise market demand.

The share of VR headsets equipped with Color VST (MR capabilities) surged to 80% in Q3 2024 from just 6% in Q3 2023. This trend is expected to reach over 90% in Q4 2024 with the launch of the Meta Quest 3S. Despite these advancements, the VR industry continues to face technical challenges, including achieving lightweight headsets with superior display performance, longer battery life, and an extensive content library beyond gaming, at an affordable price point.

Apple is reportedly testing OLED displays made on conventional glass substrates for its lower-cost Vision headset. This display technology is likely more cost-effective than the Micro OLED displays used in the Vision Pro. However, balancing cost, display size, and resolution without compromising user experience remains a significant challenge for Apple. As a result, stagnation in the global VR market in the coming years is expected to persist, with occasional fluctuations driven by new product launches from key OEMs.

Despite the lackluster XR market performance in Q3 2024, the period marked pivotal industry advancements. The debut of Meta’s Orion AR glasses and Snap’s Spectacles’ 24 AR glasses showcased the future potential of AR technologies. These products highlight the industry’s push toward blending advanced functionality with user-friendly designs, paving the way for true AR entertainment. Detailed analysis of these product launches are available in our full quarterly market report.

Another promising development is the booming AR+AI smart glasses market, which is expected to gain momentum from late 2024 into 2025. Leveraging advancements in generative AI technologies, traditional hardware giants, AR/VR OEMs, and internet companies are shifting their focus to the development of AR+AI smart glasses. Companies like Rokid and INMO have launched AR+AI glasses integrated with large language models in Q4 2024, with more products from various OEMs expected in 2025. Additionally, the introduction of the Android XR OS is also expected to drive growth in the AR+AI smart glasses market.

While the global VR market is likely to see only slight growth in the coming years, Counterpoint expects significant expansion in the global AR smart glasses market.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Follow Counterpoint Research
[email protected]