Augmented and Virtual Reality Spurred by Easy Mobile Access and Capable Enterprise Devices: Head Mounted Display Shipments to Reach 65 Million Units in 2020

​All Head Mounted Display (HMD) segments will see strong growth over the coming years. The total HMD market is expected to ship around 65 million units in 2020, with a CAGR of 88%. Augmented and Virtual Reality represents the next revolution in Consumer Electronics, and at the forefront of AR and VR are HMD.

With the large and expanding install base of smartphones in all markets the potential install base for Mobile VR is high. “Tethered VR devices, such as the Oculus Rift, will be outpaced by Mobile-reliant VR devices, such as the Samsung Gear VR, thanks to lower barriers to adoption in price and hardware requirements” says Eric Abbruzzese, Research Analyst at ABI Research. Revenues for Mobile-reliant HMDs are expected to hit US$1.6 Billion in 2020, with 25 million expected units shipped. While forecasted hardware revenues for Mobile HMDs are lower than Tethered VR units, due to higher Tethered ASPs, the larger install base and lower cost of entry for Mobile VR will drive more interest from larger public. “Smartphone manufacturers such as LG, Motorola, Xiaomi, and Huawei can embrace VR through their own smartphone housing, similar to Samsung and their Gear VR. As more companies do this, the market will begin to see VR advertised as an accessory to smartphones, encouraged by user interest and lower cost,” he continues.

AR smart glasses will primarily be an enterprise-focused market for the next few years, as device costs remain high. Google Glass is as an example of how high ASPs can severely impact consumer interest, while the recent pivot for Glass to Enterprise programs shows how a high ASP does not necessarily translate into low enterprise interest. As ASPs decline, consumer interest and uptake will increase. Consequently, the smart glasses market will see a split between consumer-focused and enterprise-focused devices where enterprise devices will feature higher specifications and more concentrated use cases, and consumer devices will focus on affordability and valuable features. Enterprise smart glasses revenues are expected to make up 48% of total AR and VR HMD hardware revenues in 2020.

These findings are part of a report on Head Mounted Displays, as part of ABI Research’s Augmented Reality, Virtual Reality, and Gaming TechnologiesResearch Service, which includes Research Reports, Market Data, Insights, and Competitive Assessments.

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