2025 is coming soon, and as the middle of the decade rolls in, it is easy to forget where the XR market was in 2020.

The start of the decade marked a shift towards consumer adoption of XR. The Meta Quest 2 became the leading VR headset thanks to its consumer-friendly mobile design and low cost.

In enterprise, however, XR solutions existed for many years beforehand, creating a base mark for today’s emerging AR/VR/MR sector.

Understanding how the XR hardware market is expected to shift is necessary for businesses wanting to stay ahead of technology trends; if a company does not catch the current cycle, it can become problematic over time.

Investing in the future is a common trait among successful businesses, and if XR market forecasts are correct, investing in AR/MR headsets could be a significant part of the next enterprise technology cycle.

In the first quarter of 2024, the IDC reported a substantial decrease in global AR/VR headset shipments. According to the report, there was a 67.4 per cent year-over-year drop in shipments in Q1. Interestingly, the decline mainly affected VR headsets, as potential buyers were more interested in MR/AR devices.

The Rise of MR Headsets 

The decade started with VR headsets dominating the market, with the Quest 2 still topping user metrics on platforms like SteamVR in 2024.

In years past, AR smart glasses and MR devices were reserved for niche enterprise and consumer use cases, but the tides seem to be changing.

ResearchAndMarkets’ recent “Smart Augmented Reality Glasses—Global Strategic Business Report” states that MR holographic displays, such as Apple’s Vision Pro, are expected to grow at a 58.4 per cent CAGR until 2030.

As VR entered the mainstream, leading firms such as Meta and Apple—among many others—started researching and developing AR/MR devices in the early 2020s.

This research initially led to the Meta Quest Pro, an enterprise-facing device that failed to take off; Apple Vision Pro then stole the MR thunder and gave XR another mainstream boost in 2024.

But the story continues in 2024, with Meta debuting the Meta Quest 3S, which looks to again grab a foothold on the MR marketplace with a Quest 2-esc low-cost device.

At Meta Connect 2024 last month, CEO Mark Zuckerberg introduced the Orion AR smart glasses, which look to continue the uptick in AR smart glasses that Meta is experiencing with the Ray-Ban Stories portfolio.

That said, it appears that Microsoft could potentially be working on a new device in reaction to modern MR headset expectations. The firm has recently dropped support for HoloLens while also patenting AI-powered MR headset technology.

It is hard to get through the hype and the marketing to uncover MR/AR’s true value, so XR Today spoke exclusively to Frank Furnari, the CEO and founder of ARuVR, a cross-platform award-winning immersive learning platform.

Furnari said:

“The contribution of large companies is vital for the growth and maturation, not only advanced the technology but also help create a sustainable and scalable market-paving the way for a more immersive and interconnected future.”

Will AR Smart Glasses Smash Ubiquity Expectations?

While enterprise vendors like Vuzix and RealWear have many years of experience rolling out AR and assistive reality glasses to businesses, the consumer space has yet to embrace the technology.

If consumer adoption rises, it could lead to more interest from enterprise clients, much like the Quest 2 boom, where professionals asked how business value can be extracted from the emerging technology.

Furnari added:

“For businesses, a cost-effective XR device can facilitate deployment at scale over several use cases, such as training or remote collaborations, without the heavy investment they typically need to make if they go with high-end devices.”

However, market forecasts expect slow adoption to buck, stemming from successful sale figures from the Meta Ray Ban Stories portfolio to smaller hardware providers like Xreal.

Meta’s Orion AR smart glasses have great potential. However, the device is still years away from the market, and Zuckberg’s firm only allows trusted partners to use it to find exciting use cases.

The previously mentioned ResearchAndMarkets report highlights that the global market for smart glasses reached approximately 678,600 units in 2023, with predicted growth reaching 13 million units by 2030, representing a CAGR of 53.0 per cent from 2023 to 2030.

Does this Mean Eye and Hand Tracking are the Future of XR Interaction?

MR and AR wearables bring new forms of navigation, like eye and hand tracking, potentially simplifying professional onboarding.

A Global Market Insights report noted that the eye-tracking market was worth roughly $850 million in 2023, with an expected CAGR of over 30.5 per cent between 2024 and 2032.

To answer this, XR devices like the Vision Pro leverage hand and eye tracking, negating the need for controller-based input and leveraging a pinch-and-pull input method that mirrors smartphone screen navigation without requiring controller familiarity.

Furnari noted the importance of converging emerging technologies, by explaining:

“Having AI engines on those devices will make usability very easy, and therefore, the use cases and applications will be much broader than what we have today. The combination of high-end AR technology, AI engines, and design will make we’ll have a bright future these devices.”

The rise of MR and AR devices, alongside this new method of XR interaction, can bring many benefits, one of which comes from improving decision-makers’ perception of XR.

Despite an increasing understanding of XR in the business world, controllers may bring an unwanted feeling of gamification to the workplace, which could muddy an unaware team member’s perception of an XR solution.

Going back to the Orion device, the product also avoids traditional controllers for input, instead leveraging a neural interface wristband that translates a user’s electrical brain activity into device input to remove user friction.

In an additional report from Evolve Business Intelligence, the group found that the XR hardware and software market share is fairly even—hardware at 56 per cent and software at 44 per cent—showing signs of increased investment and interest in software services for enterprises and consumers.

This could also show that as AR/MR grow and alternative tracking input methods become more common, investments in services such as immersive training, collaboration, design, and entertainment will also increase.