Apple analyst Ming-Chi Kuo is continuing his negative view of VR Market and Apple's upcoming XR headset in his latest tweet. While some may find his views realistic, his latest string of negative comments and sarcasm towards Apple have been out of character.  

Last Thursday, Kuo tweeted: "Because Apple isn't very optimistic about the AR/MR headset announcement recreating the astounding "iPhone moment," the mass production schedule for assembly has been pushed back by another 1-2 months to mid-to-late 3Q23.

The delay also adds uncertainty to whether the new device will appear at WWDC 2023, as the market widely expects."

No one is expecting Apple's XR Headset to be anywhere near an "iPhone moment" and certainly not Apple who will be starting out slowly due to a price tag of an estimated US$3,000. And what delay is Kuo talking about? The device isn't expected to be delivered until sometime this fall unless Apple says otherwise during the WWDC23 Keynote in June.

Below are Kuo's notes from Kuo's latest tweet regarding the VR Market and Apple's coming Headset.  

Some critical updates on the sales/shipments of AR/VR headset devices:

• Sony has cut its 2023 production plan for the PS VR2 by about 20%.
• The product lifecycle shipment for Meta’s Quest Pro is only around 300,000 units.
• Pico (China’s largest AR/VR headset brand) shipments in 2022 were more than 40% lower than expected.

Conclusion:

• There is currently insufficient evidence to suggest that AR/VR headsets can become the next star product in consumer electronics in the foreseeable future.
• Apple’s announcement event is likely the last hope for convincing investors that the AR/MR headset device could have a chance to be the next star product in consumer electronics.
• The current market consensus may overestimate AR/VR headset devices’ contribution to key component suppliers over the next few years, particularly in the optical-related.

Apple's XR headset is likely to take a slow trajectory closer to that of the Apple Watch than an "iPhone moment." Bloomberg's Mark Gurman reiterated in his call in his Sunday Power On newsletter that Apple's Headset will indeed be showcased at WWDC23 in June. If Apple does indeed unveil their headset in June, then Kuo will have a little egg on his face on this front. 

In the bigger picture, IDC's November 30, 2022 report stated that "Worldwide spending on augmented reality and virtual reality (AR/VR) is forecast to reach $13.8 billion this year and grow to $50.9 billion in 2026, according to the International Data Corporation (IDC) Worldwide Augmented and Virtual Reality Spending Guide.

The five-year compound annual growth rate (CAGR) for AR/VR spending will be 32.3%. Virtual reality will account for more than 70% of all AR/VR spending throughout the 2022-2026 forecast while overall spending will be almost evenly split between consumer and commercial applications.

"The AR/VR market has been taking slow but sure steps in recent years and is poised to take longer strides in the years to come," said Ramon T. Llamas, research director, Mobile Devices and AR/VR at IDC. You could read more about this report here.

You could also check out 99 FIRMS report that provides a wealth of statistical data on the VR market. Although it's a 2020 report, it still provides some interesting insights into the VR market in general with few forecasts up to 2025.