Following a significant downturn in 2025, the global near-eye display market is anticipated to rebound in 2026. Industry analyst firm Omdia forecasts that global revenue from near-eye displays will reach $675 million next year, representing a 12% increase year-over-year. Shipment volumes are also expected to climb to 14.53 million units, up 16% annually.
This projected expansion is primarily driven by rising demand for augmented reality (AR) glasses. While the virtual reality (VR) segment remains sluggish, sustained growth in the AR eyewear category is expected to largely offset the ongoing softness observed in the VR sector.
AR glasses emerge as a key driver of market recovery
With major players such as RayNeo, Alibaba (09988), XREAL, and VITURE launching new products, AR glasses are poised to become the fastest-growing application segment within the near-eye display market in 2026. Omdia projects that AR display shipments will surge to 4.1 million units next year, a remarkable 154% jump year-over-year. Correspondingly, market revenue for this segment is expected to hit $156 million, reflecting a substantial 152% increase.
This acceleration highlights the rapid development of the AR eyewear industry, underpinned by continued sector investment and an evolving, more mature ecosystem. These factors are collectively fostering an environment conducive to broader adoption and commercial success.
VR headsets continue to face hardware and ecosystem hurdles
After consecutive declines in 2025 and 2026, the VR display market is expected to remain under persistent pressure. Even when a recovery eventually materializes, it is likely to be a gradual, step-by-step process rather than a swift comeback. Compared to the fast-expanding AI-powered smart glasses and AR eyewear markets, VR headsets continue to grapple with several obstacles.
These challenges include a lack of compelling next-generation product iterations, form-factor limitations stemming from bulky hardware and high power consumption, discomfort during extended wear, and a content ecosystem that still holds limited appeal for the mass consumer base. Meanwhile, industry investment and market attention are progressively shifting toward AI-integrated smart glasses and lightweight AR devices.
As the Quest 3 and Quest 3S mature within their product lifecycles, Meta has slowed the pace of new VR headset releases. Additionally, the market performance of Apple Vision Pro has fallen short of earlier expectations, and Samsung's Galaxy XR is still in the early stages of market adoption. Consequently, leading manufacturers are adopting a more cautious stance regarding investment pace and growth projections for the VR segment.
Given these dynamics, Omdia estimates that global VR display shipments will decline 4% year-over-year in 2026, reaching 10.5 million units. Market revenue is likewise projected to fall 4%, settling at $518.7 million for the year.
Comments