The augmented reality (AR) and virtual reality (VR) market has shown a sharp rebound in the first quarter of the year, with 18.1% annual growth that is setting up mixed reality (MR) and extended reality (ER) to drive long-term expansion, according to research from IDC.
The analyst’s Worldwide quarterly augmented and virtual reality headset tracker found that the market was shifting toward more immersive and versatile experiences. Despite a forecasted 12% decline in total shipments for 2025 due to delayed product launches, IDC expects a strong rebound in 2026 with 87% growth, surpassing the pandemic-era peak of 11.2 million units. From 2025 to 2029, the market is projected to grow at a compound annual growth rate (CAGR) of 38.6%.
The study revealed that the market resurgence was led by Meta, which captured a 50.8% share of business. While Meta continues to lead, IDC also noted that the rise of brands such as Viture and Xreal shows that innovation in form factor and user experience is resonating with consumers, and IDC predicted that the next wave of growth will be driven by mixed and extended reality, especially as AI and Android XR platforms mature.
Among the top five suppliers, Xreal secured the second position after Meta, driven by strong shipments of its One series. Viture stood out with what the analyst called “staggering” 268.4% year-on-year growth, while TCL also posted “impressive” gains at 91.6%.
Yet the study showed that the rising tide of the leaders was not floating all immersive technology boats. By stark contrast, the “others” category in the market study showed that firms experienced a sharp decline of 47.2%, underscoring a market shift toward both established and emerging leaders with focused product strategies.
IDC made particular note that Sony and Apple – typically strong players in the AR/VR space – were absent from the top rankings in the first quarter of 2025 as channels maintained healthy inventory of their products. The data also showed that this shift marked the first time that three of the top five suppliers – Xreal, Viture and TCL – specialised in optical-see-through (OST) glasses, collectively capturing a significant 22.5% share of the market.
Looking ahead, IDC forecasts a dynamic transformation in the AR/VR landscape where pure VR shipments are expected to decline sharply while at the same time mixed reality and extended reality are poised to dominate.
Despite the growth in MR, IDC expects the market category will largely remain as a means of gaming and content consumption for consumers. However, it also believes that smart glasses such as those found in the ER category will 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, a forecast slightly lowered by IDC due to changing priorities and shifts in supply brought about by the onset of tariffs in the US.
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.
Assessing the prospects for future business, IDC research director Ramon T. Llamas said the worldwide AR/VR headset market was reaching a critical tipping point: “Pure VR was once the darling of the market with companies like Meta, HTC and Sony accounting for the vast majority of volumes. Now we have it on track to wind down in the next few years.
“Likewise, pure AR had strong promise with the help of Microsoft, but now we anticipate volumes to hold a small place in the overall market. Meanwhile, we anticipate MR to experience a strong reception with many of those VR companies pivoting there and gaining entrants like Apple.
“ER headsets will continue to gain traction primarily among gamers. Not to be overlooked is the impact that Google’s Android XR can have across both MR and ER, and we look forward to seeing more vendors leverage the new platform in much the same way that numerous smartphone vendors embraced Android.”
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