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As we approach a new year, it’s time for our annual ritual of synthesizing the lessons from the past twelve months and formulating the outlook for the next twelve. 2024 was an incremental year for AR & VR, which both continue to gradually trudge uphill toward mainstream traction.
Highlights this year include XR’s initial convergence with AI, Apple Vision Pro’s slow traction, and some ups and downs for VR. 2024 was also defined by the rise of low-immersion smart glasses, and aspirational high-immersion AR glasses like Snap Spectacles and Meta Orion.
All these approaches – passthrough AR, seethrough AR, and non-display smartglasses – represent a divergence and diversification of form factors. That’s a good thing, as XR should include several formats that are purpose-built and use-case-driven – a key trend seen this year.
With that backdrop, what will 2025 look like in spatial computing? Aligned with the more extensive predictions of our research arm, ARtillery Intelligence, we’ve devised 5 predictions. We’ll break them down here weekly, starting with prediction 2: AR Form Factors Diverge & Diversify.
Prediction 1: AR & AI Collide
Prediction 2: XR Form Factors Diverge & Diversify
Prediction 3: Meta Orion Inspires Seethrough AR
Prediction 4: Mixed Reality Development Amps Up
Prediction 5: Visual Search’s Mainstream Move
Annual Predictions: 2024 Lessons, 2025 Outlook
Methodologies & Modalities
AR form factors are a mixed bag. For example, headworn AR is bisected by passthrough AR and seethrough AR. In the latter camp, there’s further subdivision into “flat AR” and “dimensional AR.” These then diverge into several methodologies and modalities to get light to the eye.
Over the past decade of XR’s lifecycle, there was some degree of consensus that seethough AR, using waveguide-based approaches, was a winning formula. This was mostly born from leading devices at the time, such as Microsoft HoloLens (1&2) and Magic Leap (1&2).
But that consensus made it difficult for diverging display technologies to get funding and traction. For example, as we examined recently alternative approaches like laser beam scanning (LBS) and virtual retinal displays (VRDs) were dismissed partly due to their departure from consensus.
But we’re now seeing a turning point in this industry dynamic. And it’s happening for one very big reason: the consensus didn’t work. The ”leading devices” noted above have largely failed to validate a substantial market. In fact, HoloLens has retreated from the market altogether.
From Audible to Augmented: Segmenting the Spatial Spectrum
Get Real
With those failures comes erosion to the claim that such optical and display systems represent a winning formula. The good news is that this means more openness to alternative flavors of XR. This is already happening given the rise of passthrough AR as a new standard in VR.
We’re also seeing lower-end form factors gain traction – more so than Magic Leap and HoloLens ever did. We’re talking about the ”flat AR” glasses noted above. Meanwhile, non-display AI glasses like Ray Ban Meta Smartglasses deviate even further from traditional approaches.
All the above has led to another key trend in the XR industry which is to ”get real.” After a decade of chasing the vision goal of robust and dimensional visual-AR experiences, the industry is starting to realize that it can’t be done in a form factor that consumers will wear in public.
So we’ve seen a proliferation of more toned-down AR experiences that are focused on a single use case, such as Xreal Air 2’s lean-back 3DoF screen mirroring. That focus has allowed devices to deliver compelling experiences at consumer-viable price points. Expect more of this.
Passthrough vs. Seethrough AR: The Answer is ‘Both’
Concrete Prediction
Boiling it down, the lite AR approach – which we define as both non-immersive flat-AR glasses and non-display AI glasses – will lead AR sales in 2025 with 1.3 million units sold. That will be followed by higher-end immersive AR hardware like Magic Leap and Apple Vision Pro.
That higher-end “dimensional AR” category will collectively reach 336,000 units. Note that this just counts devices that are primarily meant for AR. VR devices with passthrough AR such as Quest 3 are measured separately in our VR estimates – though the lines continue to blur.
We’ll pause there and circle back next week with another 2025 prediction. Meanwhile, check out the full report.
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