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VR headset market forecast to boom in 2018

Posted: 16 Mar 2016     Print Version  Bookmark and Share

Keywords:augmented reality  virtual reality  smart glasses  wearables 

The nascent market for augmented and virtual reality headsets are expected to boom in 2018, according to the panel at the Game of Developers Conference in San Francisco, California. At present, it is at the stage of prototypes and developer kits, but VR and AR experts are projecting users to be up to a hundred million and are expecting to overtake the mobile market.

Tim Merel, founder and chief executive at Eyetouch Reality and Digi-Capital, an investment baking firm for VR and AR and his fellow panelists defined virtual reality devices as those with "presence" that provide an immersive experience, such as the Daqri smart helmet. Augmented reality fuses overlays digital images on the physical world with products such as Microsoft's HoloLens or Meta glasses.

The first two months of 2016 showed a ₹7,382 crore ($1.1 billion) investment in AR and VR—the first time that AR/VR investment has topped a billion dollars in any year. Nearly ₹5,369.13 crore ($800 million) went into display start-up Magic Leap, which developed a retinal display for AR that superimposes computer generated imagery over real-world objects.

Digi-Capital forecasts ₹8.05 lakh crore ($120 billion) in revenue from AR/VR by 2020. While the success of VR is mostly consumer related, AR poses an opportunity for revenue from myriad vertical markets. Mobile operators could potentially charge customers for the data used to drive higher frame rates and stereo images, Merel noted.

AR revenue

Figure 1: The tipping point for AR passing VR will be between 2018 and 2019. (Source: Digi-Capital)

"Everybody from big players at the top to a million start-ups is working on this," Merel said, adding that the domestic Chinese market is growing rapidly.

VR will come online first, because the technology is driven by the gaming industry, and will eventually turn into a ₹2.01 lakh crore ($30 billion) market. Augmented reality systems–driven by smartphone-like use cases that include online commerce and heads-up displays for vehicles–will eventually take up a larger piece of the pie at ₹8.05 lakh crore ($120 billion), according to Digi-Capital.

- Jessica Lipsky,
  EE Times

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