CES 2016: VR Headset Sales to Surge 500%

Las Vegas -- Thanks in large part to the emergence of new virtual reality headsets such as the Oculus Rift, Samsung Gear VR and HTC Vive, unit sales in the budding CE device category will surge 500% in 2016 and reach 1.2 million units sold, according to a new forecast from the Consumer Technology Association (formerly the Consumer Electronics Association).

VR, identified by CTA as one of three “Tech Sectors to Watch” (drones and 3D printing were the other two), will also generate total revenues of $540 million this year, a 440% jump over 2015, the organization said.

Among headset makers, Samsung last year began to sell an Oculus-powered Gear VR mobile headset for $99, about half the price of the previous generation product.  Facebook-owned Oculus announced today that it will start to take pre-orders for the higher-end (and much pricier) Oculus Rift VR platform  on Wednesday (January 6), but has yet to announce a commercial launch date.  Oculus told The Verge that initial pricing and the ship date will be announced when preorders open.

While VR is expected to become a key conduit for gaming, the technology is also attracting attention from video programmers, including Discovery Communications, which unveiled a VR initiative in August. Comcast, meanwhile, has been splashing VC dollars on VR startups such as Baobab Studios, NextVR,  and AltspaceVR.

VR is “clearly a growth area,” Shawn DuBravac, the chief economist and senior director of research at the CTA, said here during a session that previewed the organization’s latest forecasts.

The 4K/Ultra HD market is also heating up. DuBravac said 7 million 4K TVs were sold last year, up from 1.4 million in 2014, and that he expects that figure to reach 13 million in 2016. CTA also predicts that revenues from 4K UHD displays in 2016 will top $10 billion, representing a 65% year-on-year increase.

While costs for 4K TVs have been coming down, he also attributed that growth to the broadening of the technology’s ecosystem, referencing the growth of 4K streaming options, the coming of new 4K-capable Blu-ray players, and the increased attention being given to the format by studios. Warner Bros, for example, announced today that it will make 35 titles, including Mad Max: Fury Roadand San Andreas, available on Ultra HD Blu-ray by the end of 2016.

CTA also announced Monday that it expects the Internet of Things (IoT) market to eclipse a record-setting $287 billion in retail revenues ($224 billion wholesale) in 2016.

While smartphones, televisions and laptops/desktops comprise 51% of the consumer technology industry’s revenue, that will drop below the 50% market this year thanks to growth from wearables, VR and drones, CTA said.

In a nod to smart home services and strategies that are now well underway among several of the nation’s largest MVPDs, CTA sees the smart home tech sector (which includes connected thermostats, cameras, smart locks and lighting) to reach 8.9 million units sold in 2016, a 21% increase, alongside $1.2 billion in revenue.

But not all product categories are hot. Tablet sales,  CTA predicted, will continue to slow in 2016, projecting that unit sales will reach 60 million, a 9% drop from 2015, while sales dip 12%, to $18 billion.

And although UHD TV sales are on the upswing, CTA expects revenues for the overall TV market to not increase in 2016.