The augmented reality (AR) and virtual reality (VR) sectors are experiencing a remarkable resurgence, showcasing a robust annual growth rate of 18.1% in the first quarter of the year, according to new insights from International Data Corporation (IDC). This upswing in the market is laying the groundwork for an expansive future driven by mixed reality (MR) and extended reality (ER) technologies.
Market Analysis and Growth Projections
According to IDC’s Worldwide Quarterly Augmented and Virtual Reality Headset Tracker, the shift in consumer demand is leaning toward more immersive experiences that offer greater versatility. Despite an anticipated 12% decline in total shipments for 2025, attributed to delays in product launches, IDC forecasts a remarkable rebound for the sector in 2026 with projected growth of 87%, surpassing the previous peak of 11.2 million units experienced during the pandemic. Over the span of four years, from 2025 to 2029, the AR/VR market is expected to grow at a staggering compound annual growth rate (CAGR) of 38.6%.
Notably, Meta leads this resurgence, commanding a substantial 50.8% share of the market. However, competitors such as Viture and Xreal are quickly gaining traction, indicating a shift toward innovative form factors and improved user experiences that resonate well with consumers. Furthermore, IDC suggests that the next wave of growth will heavily rely on the synergies between mixed reality and artificial intelligence (AI), particularly as the Android XR platform matures, which is pivotal for the future landscape of AR/VR experiences.
Emerging Trends and Consumer Preferences
The report highlights that Xreal has secured second place, closely following Meta, largely due to substantial shipments of its One series of devices. Simultaneously, Viture has distinguished itself with a remarkable 268.4% year-on-year growth, while TCL has recorded impressive gains at 91.6%. Yet, the study also reveals a contrasting trend; the “others” category experienced a staggering 47.2% decline, reflecting a pronounced market consolidation favoring established and innovative companies that implement focused product strategies.
Interestingly, well-known players like Sony and Apple did not feature in the top rankings for the first quarter of 2025. This absence can be partially attributed to an oversupply of their existing products in the market. Moreover, this shift signifies a notable milestone as three out of the top five suppliers—Xreal, Viture, and TCL—are specializing in optical see-through (OST) devices, collectively acquiring a commendable 22.5% market share. As user preferences evolve, these OST devices present a promising avenue for both consumer and enterprise applications.
Future Outlook and Business Implications
Looking forward, IDC anticipates a considerable transformation in the AR/VR landscape. Shipments of pure VR devices are predicted to decline, while mixed reality and extended reality technologies are set to take center stage. Even though MR is currently seen predominantly as a medium for gaming and content consumption, the potential for smart glasses in both consumer and enterprise markets appears to be significant. IDC estimates that MR shipments will surge from 3.3 million units in 2025 to over 15.2 million units by 2029. However, this forecast has been slightly adjusted downward due to shifting priorities and supply chain challenges exacerbated by tariffs in the U.S.
The ER segment is expected to experience even greater growth, projected to rise from 2.2 million to 8.6 million units during the same period. In addition, augmented reality is set for steady expansion, with estimates suggesting a reach of 457,000 units by 2029. Commenting on the evolving landscape, IDC’s research director Ramon T. Llamas remarked on the pivotal moment for the worldwide AR/VR headset market, stating, “Pure VR was once the darling of the market… Now we have it on track to wind down in the next few years.”
He further elaborated that, while pure AR had shown considerable promise, it now tends to occupy a smaller niche within the overall market, paving the way for hybrid technologies like MR to gain a robust foothold, especially with new entries like Apple making the switch. Llamas noted, “ER headsets will continue to gain traction primarily among gamers,” emphasizing the potential impact that platforms such as Google’s Android XR can have on MR and ER domains. As more vendors leverage this emerging technology, parallels can be drawn with the past embrace of the Android platform by numerous smartphone manufacturers, indicating a promising future for the AR/VR market overall.
Quick Reference Table
| Category | Growth Rate (2025-2029) | 2029 Projected Shipments |
|---|---|---|
| Mixed Reality (MR) | 38.6% | 15.2 million units |
| Extended Reality (ER) | 74.5% | 8.6 million units |
| Augmented Reality (AR) | Steady growth | 457,000 units |
As we transition into a new era for AR and VR, the emphasis will likely shift toward integrated experiences that blend gaming, professional applications, and daily functionalities, all underpinned by advancing technologies.