High Prices Keeping AR Headsets From Gaining Ground With Consumers, Says SA
Consumers’ familiarity with augmented reality on smartphones through apps such as Snapchat and Pokemon GO isn’t carrying over to headset sales, said Strategy Analytics Thursday. AR headsets including Google Glass and Microsoft HoloLens are niche products with sales “barely into…
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the hundreds of thousands of units,” said the research firm. Google Glass kick-started the AR headset market in 2013, and though it wasn’t a commercial success, “the potential of AR became clear,” and surrounding hype led Google, Apple, Microsoft and other players to make serious investments in the AR field, said analyst David MacQueen. Much of AR technology found its way into smartphones, but dedicated AR headsets remain a niche product due to hardware cost, he said. The relatively low-cost $200 Lenovo slot-in Mirage AR headset drove the market to a peak level last year, but while it became the top-selling AR headset of all time, “it only moved the needle slightly,” pushing total shipments from tens of thousands to hundreds of thousands, said MacQueen. Slot-in AR devices represent most shipments, but binocular AR units such as HoloLens will gain followers as the market shifts to devices offering higher quality experiences, said the analyst. Key consumer use cases including gaming, marketing and search require a device capable of delivering rich 3D graphics, he said, and they’ll need to have a lower consumer cost, with similar functionality, than state-of-the-art technology, he said. “To drive the price down to a consumer-friendly price point for an AR device with a stereoscopic 3D view, it is likely that some of the functionality (and therefore component cost) will be shifted to a smartphone,” said MacQueen, saying smartphone OEMs are the most likely contenders to succeed long-term. Strategy Analytics projects a 10-million-unit global market by 2023 as average selling prices drop.