Analysis: VR market under pressure as AI smart glasses take-off
June 30, 2026
After a sharp contraction in 2025, near-eye display market revenue is forecast to reach $675 million (€592.7m) in 2026, up 12 per cent year-over-year (YoY), according to Omdia’s VR, AR, XR Near Eye Displays – 2026 Analysis.
The research also projects that near-eye display shipments will reach 14.53 million units in 2026, representing a 16 per cent YoY increase, as rapid growth in AR glasses partially offsets continued weakness in the VR segment, where market sentiment remains subdued.
“Since 2025, the XR industry has undergone a notable strategic shift,”commented Valerie Li, Principal Analyst at Omdia. “Major technology companies including Meta, Apple, Samsung and Huawei have adjusted their product roadmaps, delaying or scaling back VR headset launches in favor of lightweight AI smart glasses and AR glasses.”
AR glasses support market recovery
With new product launches from RayNeo, Alibaba, XREAL and VITURE, AR glasses segment is expected to emerge as the fastest-growing application within the near-eye display market in 2026. Omdia forecasts AR display shipments to reach 4.1 million units, representing 154 per cent YoY growth. Market revenue is projected to increase by 152 per cent year-on-year to $156 million. This growth reflects the accelerated development of AR glasses, supported by rising industry investment and expanding ecosystem support.
VR headsets face hardware and ecosystem challenges
After consecutive declines in 2025 and 2026, the VR display market is expected to remain under pressure, with any subsequent recovery likely to be gradual rather than immediate. Compared with the rapidly expanding AI smart glasses and AR glasses segments, VR headsets continue to face structural challenges, including limited major product refreshes, form-factor constraints associated with bulky designs and high-power consumption, limited suitability for all-day wear, and a content ecosystem that has yet to deliver compelling mass-market use cases.
Industry investment and consumer attention are also shifting toward AI-enabled eyewear and lightweight AR devices. Meta has slowed the pace of new VR headset launches as Quest 3 and Quest 3S move further into the mature stage of their product lifecycles, while Apple Vision Pro has fallen short of initial sales expectations and Samsung’s Galaxy XR has yet to gain significant market traction. As a result, leading vendors have become increasingly cautious in their investment priorities and growth expectations for the VR market.
Consequently, VR display shipments are expected to decline by 4 per cent YoY to 10.5 million units in 2026, while market revenue is projected to decrease by 4 per cent YoY to $518.7 million.
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