AR and VR to see 16 million shipments due to coronavirus

March 26, 2020
The outbreak will cause manufacturing delays at the source and reduce the overall demand for augmented reality smart glasses

The coronavirus outbreak will cause manufacturing delays at the source and reduce the overall demand for augmented reality (AR) Smart glasses according to an ABI Research report. At the same time, there will be a significant increase in demand on both the enterprise and consumer side as telepresence and content demand grows. The balance between these two will see 16 million AR & virtual reality (VR) head mounted display (HMD) shipments in 2021, maintaining the trajectory of the 3.5 million consumer AR shipments in 2024.

“The coronavirus outbreak will cause temporary manufacturing and shipment delays, however the demand for consumer AR and VR devices and content has been increased due to home isolation, balancing initial drop in demand and financial losses for providers,” said Eleftheria Kouri, research analyst at ABI Research.

According to ABI, Covid-19 has impacted the AR and VR market as well, causing temporary delays in AR/VR device production, increased costs and revenue losses. MAD Gaze, a Hong Kong-based consumer AR smart glasses provider, has announced delays in shipments, and changed its display panel supplier from a Chinese factory to Korean and Japanese factories due to production delays in Chinese factories. Nreal, a China-based AR consumer smart glasses provider, announced production/ shipment delays as well.

“In the short term, the delays in production and scheduled shipments, and potential decrease in demand will have a huge financial impact on AR/VR device manufacturers, generating reduced revenue and unexpected extra costs for employee salaries or for alternative suppliers, said Kouri. Delays are anticipated in AR/VR application development and upcoming upgrades due to the cancellation of developer conferences.

Long-term production and shipment delays will mainly affect smaller companies says ABI. Delays may encourage potential customers to purchase products from competitors and bigger companies that are supported by high-scale supply chains and product stocks. Continuous delays of product delivery will negatively affect user experience.

The AR consumer market and smart glasses manufacturers are at a relatively lower risk in terms of losing potential customers and may not notice significantly reduced pre-orders/shipments, because AR consumer devices are not a high demand product at the current stage of the market, and the competition is still weak says ABI.

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