2022 has been a disappointing year for AR/VR but the long-term outlook remains positive

2022 has been a disappointing year for AR/VR but the long-term outlook remains positive

Revenue from AR/VR displays will total $942 million in 2022, according to the latest issue of the Biannual Augmented and Virtual Reality Display Technologies and Market Report. Despite the current global economic downturn, the long-term outlook for AR/VR displays remains positive, with revenue expected to grow at a compound annual growth rate (CAGR) of 50.7% and reach $7.3 billion. 2027.

2022 has been a tough year for AR/VR device makers, with Meta lowering its sales target and Sony pushing back the PlayStation VR2 release until February next year. Total device shipments for headphones and smart glasses are expected to increase by another 11.5% compared to 2021. DSCC notes that AMOLED panels have already started shipping for Sony headphones, so they contribute to panel revenue of this year.

Billboard revenue (VR and AR passthrough)

The PlayStation VR2 panels will reach 850 PPI, a significant increase over the 615 PPI that was available on previous AMOLED headsets, such as the Oculus Quest 1 and HTC Vive Pro. Guillaume Chansin of DSCC, Director of Display Research, said: “We believe that Samsung Display has developed a new process to achieve this level of pixel density. It can be assumed that the modeling technology is based on photolithography, although advanced FMM is also possible (APS Research at the AR/VR Display Forum). It remains to be seen if other brands will adopt hi-res AMOLED for future headsets.”

LCD still easily beats AMOLED on pixel density. Recently launched Meta Quest Pro and Pico 4 feature panels with 1050 PPI and 1200 PPI respectively. Some LCD panel manufacturers have even demonstrated over 2000 PPI. To go further, it becomes necessary to use micro-displays produced on CMOS silicon backplanes.

Flagship VR headsets

We expect OLED-on-silicon (SiOLED) micro-displays for the Apple headset to begin shipping next year. The device is expected to be a high-end headset aimed at developers and professionals. Apple will most likely launch a more affordable headset for consumers later on, but there is some uncertainty about the display configuration. We assume that Apple will stick with SiOLED and push vendors to lower the cost of displays. Meta may also consider SiOLED technology for the second generation of the Quest Pro. Under this assumption, SiOLED revenues could reach $1.3 billion next year and double in 2024.

For seamless AR, most companies developing advanced smart glasses seem to be betting on MicroLED technology, with the exception of Magic Leap which has adopted LCoS. Meta was one of the first to recognize the importance of MicroLED and has been investing in the technology for several years. Vuzix still plans to release its first MicroLED smart glasses, although they will only display monochrome images. Earlier this year, it was revealed that Google had acquired Raxium, a startup developing color MicroLED displays.

Several Chinese brands offer so-called Smart Viewers, which are based on birdbath optics instead of waveguides. These devices currently use SiOLED displays to allow users to project virtual monitors for watching videos, playing games, or even working on documents. Since SiOLED will be used in both AR and VR devices, we expect SiOLED to have the largest AR/VR display market share from 2025.


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