open_in_newOriginal article
AR/VR headset market faces 2025 decline before strong rebound in 2026

AR/VR headset market faces 2025 decline before strong rebound in 2026

  • 25.03.2025 18:00
  • telecomlead.com
  • Keywords: AR/VR headset market decline, Market rebound

The AR/VR headset market is projected to decline by 12% in 2025 due to delayed launches, but is expected to rebound strongly with an 87% growth rate in 2026. Despite challenges, the market remains driven by opportunities in consumer and commercial sectors, with Meta leading at 74.6% share. The industry is forecasted to achieve a 38.6% CAGR from 2025 to 2029.

Meta ReportsMETAsentiment_satisfiedAAPLsentiment_satisfiedSNEJFsentiment_dissatisfied

Estimated market influence

Meta

Meta

Positivesentiment_satisfied
Analyst rating: Strong buy

Dominance in AR/VR market with high market share and product launches.

Apple

Apple

Positivesentiment_satisfied
Analyst rating: Buy

Growth in market share due to new products like Apple's launch.

Sony

Sony

Negativesentiment_dissatisfied
Analyst rating: Buy

Market share decline compared to previous years.

ByteDance

Negativesentiment_dissatisfied
Analyst rating: N/A

Market share decline despite product launches.

XREAL

Positivesentiment_satisfied
Analyst rating: N/A

Growth in market share due to new products and premium solutions.

Pico

Positivesentiment_satisfied
Analyst rating: N/A

Role in driving commercial adoption with Pico 4.

Google

Neutralsentiment_neutral
Analyst rating: N/A

Anticipated platform rivalry with Android XR hardware.

Even Realities

Neutralsentiment_neutral
Analyst rating: N/A

Focus on consumer-friendly smart glasses.

RayNeo

Neutralsentiment_neutral
Analyst rating: N/A

Participation in AR/VR market with specific products.

Context

Analysis of AR/VR Headset Market Trends (2025-2029)

Market Decline in 2025

  • AR/VR headset shipments expected to decline by 12% in 2025, primarily due to delayed launches from key players despite new hardware releases.

Rebound in 2026

  • Projected 87% growth rate in 2026, surpassing the pandemic peak of 11.2 million units in 2021.
  • Strong rebound driven by increasing opportunities in both consumer and commercial markets.

Long-Term Growth Projection

  • AR/VR market expected to achieve a 38.6% CAGR (Compound Annual Growth Rate) from 2025 to 2029.
  • Mixed reality (MR) technology is key, blending immersive virtual experiences with digital overlays on the real world.

2024 Market Performance

  • Global shipments grew by 10% in 2024, driven by new product launches and market entrants.
  • Market Share Breakdown (2024):
    • Meta: 74.6%
    • Apple: 5.2%
    • Sony: 4.3%
    • ByteDance: 4.1%
    • XREAL: 3.3%

Key Growth Drivers in 2024

  • Meta and XREAL saw year-over-year growth, attributed to new products and gaming-focused use cases.
  • Average Selling Prices (ASPs) increased for premium solutions from both companies.

Holiday Quarter Impact

  • Strong consumer demand for new mixed reality headsets, including Apple’s launch and Meta’s Quest 3/3S, contributed to market growth.
  • Pico 4 played a significant role in driving commercial adoption.

Future Projections (2025 and Beyond)

  • Introduction of more display-equipped smart glasses and AI-powered multimodal devices expected in 2025.
  • Debut of Android XR hardware likely to lead to platform rivalries among key players: Meta, Apple, Google, and others.

Competitive Dynamics

  • Extended reality (ER) gaining traction in gaming, multimedia, and business applications.
  • Emerging companies like Even Realities and RayNeo focusing on consumer-friendly smart glasses.

Strategic Considerations

  • Market challenges in 2025 with shipment declines before a predicted resurgence in 2026.
  • Potential long-term effects of Android XR hardware on market dynamics and competition.