AR and VR Face Crucial Transition Before 2020 Rebirth
The current generation of augmented and virtual reality struggles to find a mass market, with mixed smartglasses sales and declining VR units. Analysts predict a necessary industry shakeout in 2019 before a major inflection point arrives in late 2020.
The current generation of augmented and virtual reality fails to deliver a true mass market despite launching in earnest after Facebook's acquisition of Oculus in 2014. Mobile AR generates over $3 billion globally through apps like Pokémon GO and e-commerce integrations, but the active user base remains limited as developers struggle to figure out what works.
Smartglasses experience a mixed landscape, with Microsoft winning a massive military contract while other pioneers sell off assets or furlough staff. Meanwhile, the VR market declines in unit sales and revenue as phone makers abandon mobile headset bundles and the release of the highly anticipated Oculus Quest faces delays.
Analysts view 2018 as the first of two transitional years for the industry, with a potential market shakeout expected throughout 2019. The technology requires these fundamental changes to clear out underperforming products and pave the way for a significant inflection point in late 2020.