The adoption of any technology is usually impacted by price, with sales of new devices growing as prices decline, particularly in the consumer segment. New technologies, such as AR and VR, are experiencing a different trend in the UK though. In the first quarter of 2017, the average selling price (ASP) of AR headsets increased 20% from the previous year to £1,762. VR headsets experienced even stronger growth, with ASPs climbing 226% year on year to £282, according to the IDC Quarterly AR/VR Headset Tracker, published in May 2017.
End users (consumers and enterprises) are looking for devices that offer better specs (improved displays, faster processors, etc.), and an enhanced experience. Instead of putting the focus on launching products at lower price points, manufacturers should work on improving quality. The adoption of new technologies is mainly driven by early adopters, for whom price is not necessarily a barrier. Take the example of Samsung and HTC. The HTC Vive costs around £760 in the UK, while the latest Samsung Gear VR with controller is priced at around £120. In the first quarter of 2017, Samsung saw its sales dive 56% year on year. Its market share declined to 24% from 87% in 1Q16. On the other hand, HTC sales increased by 3,500% and its market share grew to 13% in 1Q17 from 1% a year ago. In theory, the Samsung headset could make VR accessible to the mass market, but in reality the experience offered by HTC is attracting early enthusiasts and enterprises that want to use VR as a media and sales tool.
Lower prices will drive adoption in the longer run, when everyone understands the value of VR and AR and has the need for it, but we are still far from the early majority stage in the adoption curve. IDC expects AR and VR headset ASPs to continue to grow in the next two years.
Interested in finding out more? Visit the IDC website