Extending reality: XR hardware shipments to achieve 31% CAGR

Extended Reality (XR) hardware shipments increased by 5.3% worldwide last year, achieving nearly 18 million units. That’s according to a new industry report from Futuresource Consulting, which forecasts vigorous growth, culminating in more than 60 million units shipped in 2028 and a CAGR of 31%. 

XR innovations and advancements boosting interest

“The planets are aligning for an XR ascent,” says Nikolaos Tzoumerkas, Market Analyst, Futuresource Consulting. “Hardware is becoming lighter, allowing for longer usage times without the discomfort, battery life is gradually improving, and prices are beginning to dip.  

“Meta Quest 3 was a significant upgrade to its predecessors, with higher resolution, a more powerful processor, and colour pass-through cameras that further elevated the XR experience. It demonstrated the potential of an all-in-one headset at a low price point. Now, the release of Apple Vision Pro, and the collaboration between Samsung and Google, is raising awareness and building interest, which will significantly boost shipments as the market moves forward.” 

AIO out in front

The all-in-one (AIO) category takes the lion’s share of shipments, achieving a total of 13.9 million units worldwide last year. Combined, PSVR, PCVR and AR glasses accounted for around four million shipments. And while the USA captured more than 50% of global shipments, Futuresource expects APAC to move into pole position by 2028.  

Gaming leads the way in terms of applications, capturing 75% of the market. Entertainment is growing steadily, as the second biggest segment at 15%, followed by a wide range of other applications, including B2B applications.  

Gaming also remains the most popular motivator for XR adoption. However, Futuresource expects gaming’s market share to decline through the forecast period, with industrial use cases rising as XR moves towards the mainstream. 

Stoking the enterprise opportunity

“As XR awareness builds, enterprises will act on the segment’s potential to enhance productivity and cut costs,” says Tzoumerkas. “XR has already gained a foothold in warehouse training this year, with Vuzix releasing a pair of AR glasses specifically targeted at this use case. And the integration of AR in products like this is establishing a tinderbox, to spark further industrial use cases in the future. However, we expect medicine to witness the fastest growth, due to the opportunities it offers to drive down costs and eliminate mistakes.” 

As well as device weight and cost reductions, Futuresource notes that easier onboarding and faster configuration of devices to fit companies' specific needs will be crucial for rapid growth. The segment will also greatly benefit from advances in AI, which will help to create personalised content and new immersive experiences for users. 

Futuresource Consulting’s Global XR Market Outlook report assesses the current state of the AR and VR markets and provides an outlook on the evolution of the sector over the next five years. For more information or to make a purchase, please contact Ben at ben.thrussell@futuresource-hq.com.  

About the author

Nikolaos Tzoumerkas

Nikolaos Tzoumerkas is a Market Analyst in the Consumer Electronics team at Futuresource Consulting. Having joined in January of 2023, his main research focus includes the segments of wearables, where he tracks smartwatches and sports watches among others, and XR where he tracks all the major types of hardware technology. Nikolaos has also worked on tablets and smartphones giving him a holistic overview of the personal electronics sector.