Worldwide shipments of Augmented Reality (AR) headsets are forecast to decline 8,7% year over year to nearly 260 000 units by the end of 2022, according to new data from the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker.

While a decline for such a nascent technology may seem abrupt, volumes have been slowing in recent quarters due to the shaky financials of some of the top companies, lack of new devices, and end user demand being fulfilled by AR on smartphones in the short-term.

In the first half of 2022, the top 5 AR headset makers were Microsoft, Rokid, Shadow Creator, Mad Gaze, and RealWear. However, the landscape is expected to shift dramatically as more companies enter the market and tech giants like Apple and Meta take more of an interest in AR.

Looking ahead, despite the decline in 2022, IDC anticipates plenty of growth as the market is forecast to have a five-year compound annual growth rate (CAGR) of 70,3%, topping out at 4,1-million units by the end of 2026.

“We’re still years away from mass consumer adoption of AR glasses, and the earliest timeframe for such products would be in late 2024 or early 2025 as companies such as Apple, Meta, and others use what they’ve learned from virtual reality headsets to launch a more streamlined and consumer friendly design for AR glasses,” says Jitesh Ubrani, research manager Mobility and Consumer Device Trackers at IDC. “Between now and then, AR will continue to grow within the consumer segment though most of the products will be more akin to goggles or headsets rather than glasses and that will be a non-starter for many.”

“The majority of AR headset shipments to date have been on the commercial side, where companies are willing and able to make the necessary investments in not just the hardware, but also the required software and services that can drive a clear return on investment,” Tom Mainelli, group vice-president, Device & Consumer Research. “We expect commercial shipments to drive the market well into the forecast period, as more companies embrace AR’s growing number of use cases.”