VR shipments fall sharply despite 5G excitement, claims new report

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Shipments of VR headsets plummeted by over a third in the second quarter of this year, new research has found, potentially sounding alarm bells about one of 5G's most touted use cases.

IDC said momentum had stalled from several years ago, when Alcatel, Google and Samsung were bundling headsets with smartphones. However, it noted shipments of screenless viewers, which are tethered to a handset, had dropped sharply from one million headsets in Q2 2017 to 409,000 this year. It was the largest contributor to the market decline.

Tethered headsets connected to a console or computer also fell by 37.3 percent because the likes of Oculus and Sony were unable to continue the momentum they achieved from a price competitive 2017. They shipped 102,000 and 93,000 headsets respectively. Market leader HTC shipped almost 110,000 devices thanks to the launch of its Viveport subscription service and its Pro headset launch.

Standalone headsets were the lone positive for the market, with shipments up 417.7 percent, largely driven by the global availability of the Oculus Go and Xiaomi Mi VR devices.

Virtual reality has been central to trials and excitement among telcos regarding 5G's potential. Vodafone Spain was the most recent operator to showcase the technology in a demonstration in July.

Researchers said they expected the fall in shipments to be a blip as the market found its feet. However, Jitesh Ubrani, Senior Research Analyst for IDC Mobile Device Trackers, said: "One of the major issues with the VR market is that consumers still find it difficult to try a VR headset.

"This is where the commercial market has an opportunity to shine. HTC's recent partnership with Dave & Busters or Oculus' work with schools around the world stand to play an important role in educating and enticing consumers to use VR."

However, the report noted commercial deployments of VR tech are starting to gain traction through trials and large scale deployments. Around a fifth of total VR headset shipments were for the commercial shipments, up from 14 percent in the previous year. Average selling prices also increased from $333 to $442 during the same period.

Tom Mainelli, Program VP, Devices and Augmented and Virtual Reality at IDC, said: "In a market where mainstream VR content is still lacking, a growing number of vendors are looking to commercial as a way to build their business while they wait for the consumers to catch up.

"These vendors are moving beyond entertainment-focused B2C deployments to real-world training scenarios in companies of all sizes, all over the world. IDC expects commercial buyers to represent an increasingly important percentage of the market going forward.”