Bench Talk

(Source: Creative Clicks - stock.adobe.com)

As companies and workers grappled with the need to continue business operations through social distancing in the first few months of COVID-19, there were signs that some combination of augmented reality (AR), virtual reality (VR), and mixed reality (MR) might take firmer root.

After all, these technologies offer an array of possibilities for human interaction without demanding an actual physical presence. The chance of interactive training without leaving the home office was an attractive option to many companies who needed to get new workforce recruits up and running. On the consumer front, transport into other worlds, which VR offers, was especially appealing when most travel had ground to a halt. What seemed like the emergence of an exciting new market has become something else, though.

The Sales Numbers

Unfortunately, expectations have not lived up to reality in the years since. The sales of headsets, the primary mechanism with which to access VR, AR, and MR, have lurched from year to year, with mostly downward trends. Sales of VR headsets and AR glasses in the US dipped nearly 40 percent in 2023, according to research firm Circana.^[1] The prior year had seen a much smaller drop of 2 percent. These data stand in contrast to statistics that show a fairly decent growth curve for equivalent technologies. The AR/VR industry, for example, is forecast to grow at a compounded annual rate of 32.3 percent, reaching 50.9 billion USD by 2026.^{[2] [3]}

So, what explains the discrepancies? An argument could be made that there simply has not been enough momentum in applications tailormade for these headsets for them to become more ubiquitous. The unwieldy bulk of the early iterations of devices has not helped, nor has the fact that early models needed to be tethered to computers so they could lean on their processing power. While commercial applications for AR, VR, and MR have been promised, their foray into corporate markets has been anemic.

An Upswing in 2024?

But not all is lost for headsets just yet. 2024 might prove to be a turnaround year. Tech giants like Meta, Apple, and Samsung plan on amping up their game and will sharpen three critical aspects that might increase adoption: more seamless integration of the technology into the headsets, better design of the headsets themselves, and a more comprehensive suite of apps to run on them.

Here are the factors to keep an eye on through the remainder of this year, which may ultimately be a breakout one for headsets.

AR as a Viable Option to Smartphones

If Meta has its way, its AR glasses—and associated wrist devices that will act as controllers—will surface as a dynamite alternative to smartphones. Meant to be worn all day long, the newer versions of the glasses are expected to feature the equivalent of a viewfinder for checking text messages and other tasks that need a display. A complementary band will enable users to control the glasses and allow typing through a virtual keyboard. Futuristic as this may sound, AR glasses promise to gain increasing traction soon.

New Apps and Games

Instead of simply lifting and dropping existing apps made for a 2D world into VR and MR headsets, developers in both the iOS and Android worlds might explore new ways of catering specifically to the more immersive 3D realities these headsets can deliver. In this case, the chicken-and-egg problem—is there enough traction in headsets sales to justify creating exclusive apps or will creating these apps deliver traction—is real. But 2024 will likely see a roster of new apps and games specially crafted for the new hardware versions.

Big-Name Players with Grand Ambitions

This year's much-anticipated debut is for Apple Vision Pro, which is expected to reset the rules of the immersive AR, VR, and MR worlds with fluid displays and impressive hand-and-eye tracking.^[4] Apple promises a seamless connection between "digital content and physical space" and replaces the alphabet soup terminology of the technologies with the phrase "spatial computing." Meta also amps up its offerings with the Quest Pro and the Quest 3. To avoid being left behind, Samsung and Google plan to collaborate and use Qualcomm’s VR chip as the linchpin in their competitive arsenal.^[5] As these tech giants ramp up their offerings, we will see more choices regarding headsets.

AI Makes Its Way into Headsets?

Given that AI has permeated practically every aspect of our world, why should AR, VR, and MR devices be left out? AI is becoming part of the discussion as camera-driven inputs through which these devices can recognize objects or safety features. The challenge will be to get the processing power needed for AI-intensive tasks in a tetherless headset or AR glasses. Such developments are something to watch and might get an early seeding as we head to the second half of 2024.

Conclusion

After witnessing dips in headset sales in recent years, we might be on the verge of seeing a greater push for commercial adoption of headsets, moving beyond gaming and consumer apps. Given the momentum into new versions and an expanded array of apps, it appears that the tech giants believe we’ll see real traction in headsets and related devices soon. The numbers will eventually tell the real story.

Sources:

[1] Jonathan Vanian, “VR market keeps shrinking even as Meta pours billions of dollars a quarter into metaverse,” CNBC, December 19, 2023, https://www.cnbc.com/2023/12/19/vr-market-shrinking-as-meta-pours-billions-of-dollars-into-metaverse.html.
[2] “AR & VR Headsets Market Insights,” International Data Corporation, April 2, 2024, https://www.idc.com/promo/arvr#:~:text=While%202023%20will%20be%20another,3%20million%20units%20globally.
[3] The near future of VR & AR, December 6, 2023. https://medium.com/@Web3comVC/the-near-future-of-vr-ar-f15d6d6a889b#:~:text=From%20the%20data%20point%20of,grow%20at%20a%20high%20speed..
[4] “Apple Vision Pro,” Apple, https://www.apple.com/apple-vision-pro/.
[5] Naomi Buchanan, “Google and Samsung Set To Use Qualcomm’s New VR Chip, Could Compete with Apple and Meta,” Investopedia, January 4, 2024, https://www.investopedia.com/google-and-samsung-set-to-use-new-qualcomm-vr-chip-could-compete-with-apple-and-meta-8422266.