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Why demand for VR headsets will outweigh supply in 2016

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2016 is going to be the year of VR – Virtual Reality – with demand for headsets set to outstrip supply among Australian customers according to technology analysts Telsyte.

Telsyte predicts more than 110,000 VR headsets will be sold in Australia in 2016 with sales rising dramatically year on year.

“Strong market growth will come in 2017 and 2018 as manufacturers ramp up production and more ‘must have’ use cases emerge,” says Telsyte managing director Foad Fadaghi.

At this rate of growth Telsyte says more then 500,000 units will be sold per year by 2020.

And it will be driven by the strong computer games industry with the bulk of VR device demand coming from video gamers.

In Australia, one in two households has a gaming console and a third of those have the latest platforms like the Sony PlayStation 4.

The Samsung Gear VR headset
The Samsung Gear VR headset

Sony will release its VR headset later this year.

There are already models from the Samsung with the Gear VR and another coming from HTC called the Vive.

Telsyte has categorized VR headsets into four areas: computer, mobile, console and standalone with the company predicting console gaming to be biggest driver of sales for the next two years.

The HTC Vive VR headset
The HTC Vive VR headset

As prices come down, more advanced mobile and PC-based options will also become popular.

Another development that will arise from the popularity of VR will be developers who will create applications for businesses to take advantage of the new interface and new hardware.

“While some will take a leading position, it is more likely that a wait-and-see approach will be adopted by most organisations to substantiate the non-gamer user base, and for the current range of products to mature,” Fadaghi says.

“As with smartphone penetration, it could take up to a decade for VR to reach mainstream levels, but there is clearly pent-up demand from early adopters.”

Microsoft's Hololens
Microsoft’s Hololens

Telsyte surveyed more than 1000 Australian consumers aged 16 and more than half said they were already aware of the technology with 20 per cent expressing a desire to purchase a VR headset.

The most popular devices among customers now were the Samsung Gear VR, the Sony PlayStation VR, Google Cardboard and the Oculus Rift.

These potential customers favour games, movies, sports, entertainment and education will be the main uses.

Morpheus6

But only one in five respondents said they would spend more than $400 for a VR headset which is a lot lower than the price of the Oculus Rift, the HTC Vive and the Microsoft standalone Hololens.

But Telsyte says existing technologies like smartphones, computers and tablets won’t be replaced by VR, but rather used as a companion to these existing devices.