NEW YORK,June 20,2025
VR is out; XR is in
The AR/VR market is bouncing back,driven by new tech.
- The AR/VR market is experiencing a resurgence,with 18.1% annual growth in the first quarter.
- Mixed reality (MR) and extended reality (ER) are set to drive long-term expansion.
- Meta currently leads the market with a 50.8% share.
- Xreal and Viture are emerging as strong competitors with innovative form factors.
- Pure VR shipments are expected to decline,while MR and ER gain prominence.
The augmented and virtual reality market is seeing new life, and the AR/VR market rebound is primarily due to the growth of mixed reality and extended reality, according to new data.
A shifting landscape
The augmented reality (AR) and virtual reality (VR) market is experiencing a vigorous comeback, posting 18.1% annual growth in the first quarter of the year. This surge is setting the stage for mixed reality (MR) and extended reality (ER) to spearhead expansion for years to come, according to research from IDC.
By the numbers
IDC’s Worldwide Quarterly Augmented and Virtual Reality headset Tracker indicates a market shift toward more immersive and versatile experiences.Despite a projected 12% dip in total shipments for 2025 due to product launch delays, IDC anticipates a powerful resurgence in 2026 with 87% growth, exceeding the pandemic peak of 11.2 million units. From 2025 to 2029,the market is forecast to expand at a compound annual growth rate (CAGR) of 38.6%.
Meta still dominates
The study highlights that Meta is leading the charge, capturing 50.8% of the market. While Meta remains in the top spot, IDC also points to the rise of brands like Viture and Xreal, suggesting that consumers are responding positively to innovation in design and user experience. IDC predicts that mixed and extended reality will fuel the next wave of growth, especially as AI and Android XR platforms mature.
New players emerge
Among the top five suppliers, Xreal secured the second position, driven by strong shipments of its One series. Viture stood out with remarkable growth, while TCL also posted impressive gains.
Reader question:-How will the rise of Xreal,Viture,and TCL impact Meta’s dominance in the AR/VR market in the long term?
However,the study reveals that not all companies are benefiting equally. The “others” category experienced a sharp decline of 47.2%, highlighting a market shift toward established and emerging leaders with clearly defined product strategies.
IDC noted that Sony and Apple, typically strong players, were absent from the top rankings in the first quarter of 2025 as channels maintained healthy inventory. This shift also marked the first time that three of the top five suppliers-Xreal, Viture, and TCL-specialized in optical-see-through (OST) glasses, collectively capturing 22.5% of the market.
The future of AR/VR
Looking ahead, IDC forecasts a dynamic transformation in the AR/VR landscape. Pure VR shipments are expected to decline sharply, while mixed reality and extended reality are poised to take center stage.
Mixed reality on the rise
Despite the overall growth in MR, IDC anticipates that it will primarily remain a means of gaming and content consumption for consumers. However, smart glasses, as found in the ER category, are expected to have broader appeal in both consumer and enterprise segments. MR shipments are projected to grow from 3.3 million units in 2025 to over 15.2 million units by 2029. IDC slightly lowered this forecast due to changing priorities and supply shifts caused by tariffs in the US.
Did you know?-tariffs imposed by the U.S. have led IDC to slightly lower its forecast for MR shipments due to changing priorities and supply shifts.
Extended reality gains traction
ER is expected to surge from 2.2 million to 8.6 million units over the same period, and augmented reality will also see steady growth, reaching 457,000 units by 2029.
Analyst’s outlook
IDC research director Ramon T. Llamas believes the worldwide AR/VR headset market is at a turning point. “Pure VR was once
Beyond the Headset: The Future of AR/VR Applications
The shift from VR to XR represents more then just new hardware. It also indicates a fundamental change in how we interact with digital content. What was once confined to immersive, isolating experiences within a headset is transforming into a more integrated and accessible reality. While gaming and entertainment are driving initial adoption of mixed and extended reality,the true potential lies in enterprise and consumer applications.
Extended reality is poised to transform industries, offering practical applications across various sectors. This includes everything from remote collaboration to enhanced training and education.
XR in the Enterprise: Boosting Productivity
The enterprise sector is poised to benefit significantly from the rise of XR. Businesses are already leveraging AR and MR for a variety of applications, including:
- Remote Assistance: Technicians can receive real-time guidance from remote experts, overlaying instructions and visual aids onto their field of view.
- Training and Simulation: employees can participate in immersive training simulations, practicing complex procedures in a safe and controlled environment.
- Product Design and Prototyping: Designers and engineers can visualize and interact with 3D models in their physical space, accelerating the design process.
- collaboration: Teams can collaborate on projects in shared virtual spaces, nonetheless of their physical location.
Implementing XR can lead to meaningful cost savings. It increases worker efficiency and reduces downtime due to streamlined processes and enhanced training. this is especially evident in complex manufacturing and maintenance tasks.
XR in the Consumer Market: Redefining Everyday Experiences
Beyond enterprise applications, XR is also poised to revolutionize the consumer market. from entertainment to everyday utility, the possibilities are vast:
- Gaming and Entertainment: immersive gaming experiences blend the digital and physical worlds for unparalleled interactivity.
- Navigation and Facts Overlay: AR glasses can provide real-time navigation,overlaid information directly onto the user’s view.
- Shopping and Retail: Consumers can virtually “try on” clothes, visualize furniture in their homes, and access detailed product information.
- Social Interaction: XR transforms how we connect with others, enabling new forms of interaction, collaboration, and shared experiences.
How does XR differ from VR? Virtual reality creates fully immersive digital worlds. Extended reality overlays digital content onto the real world.
the Challenges Ahead
Despite the immense potential of XR, several challenges remain.These include:
- Cost and Accessibility: High prices and limited availability currently restrain wider adoption.
- User experience: Improved comfort, ergonomics, and ease of use are essential.
- Content Creation: A robust ecosystem of compelling XR applications is vital.
- Privacy and Security: Data security and user privacy must be addressed.
Key Takeaways
- The AR/VR market is evolving, with mixed and extended reality leading the charge.
- XR provides practical solutions across the enterprise and consumer sectors.
- Innovation in design and a more accessible design is key to future growth.
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