Global extended reality (XR) device shipments recorded a strong 44.4 percent year-over-year growth in 2025, marking a pivotal shift in the evolution of immersive technologies. According to new data from International Data Corporation, the surge is being driven primarily by rapid adoption of smart glasses, while traditional virtual reality (VR) and mixed reality (MR) headsets continue to decline.
Extended reality, or XR, is an umbrella term that encompasses virtual reality, augmented reality (AR), and mixed reality. These technologies blend physical and digital environments to create immersive user experiences across entertainment, enterprise, and everyday applications, IDC report said.
The key catalyst behind the market expansion in 2025 is the growing popularity of lightweight, AI-enabled smart glasses. Unlike bulky headsets, smart glasses resemble conventional eyewear but integrate advanced capabilities such as cameras, audio, and AI assistants. Devices like Ray-Ban Meta AI glasses have played a central role in bringing XR into mainstream usage, making wearable technology more practical for daily life.
Market dynamics clearly indicate a structural transition. While smart glasses shipments surged, demand for VR and MR headsets declined sharply, with usage increasingly limited to gaming-focused scenarios. This shift highlights changing consumer preferences toward more comfortable, always-on wearable devices rather than immersive but cumbersome hardware.
Meta Platforms continues to dominate the XR market with a commanding 72.2 percent share in 2025. Its leadership is supported by a strong partnership with EssilorLuxottica, expansion of its smart glasses portfolio, and new product innovations including performance-focused eyewear under the Oakley brand. However, Meta’s Quest headset lineup experienced a 42.3 percent year-over-year shipment decline, reflecting weakening demand beyond core gaming audiences and ongoing supply chain challenges.
Other vendors are gaining traction, albeit at a much smaller scale. Xiaomi secured the second position with a 4.2 percent market share, driven largely by domestic demand in China. XREAL captured 2.3 percent share with a focus on gamer-oriented display glasses, while RayNeo expanded its presence in the United States through aggressive pricing strategies. Meanwhile, ByteDance and Viture each held 1.5 percent share, though their trajectories diverged significantly, with ByteDance shipments declining 30.5 percent and Viture growing 94.9 percent due to retail expansion and product refreshes.
Looking ahead, the XR market is expected to maintain strong momentum. Shipments are projected to grow 33.5 percent in 2026, with a compound annual growth rate of 26.5 percent between 2026 and 2030. Smart glasses without displays already account for the majority of shipments, but display-enabled glasses are forecast to surpass VR and MR headsets by 2027, signaling the next phase of XR evolution.
The industry is entering a transition period where hardware form factors are rapidly evolving. Display-equipped smart glasses are expected to move beyond simple heads-up displays and begin supporting immersive media experiences traditionally limited to MR headsets, all within slimmer and lighter designs.
Despite the optimistic outlook, challenges remain. The XR supply chain is still in its early stages, with key components being highly IP-intensive, limiting competition and slowing hardware innovation. As a result, differentiation in the XR market is increasingly shifting toward software ecosystems, services, and onboard artificial intelligence capabilities.
Smart glasses are emerging as the dominant XR form factor, AI is becoming the central driver of innovation, and competition is expanding across both hardware manufacturers and platform providers. As new entrants such as Google, Snap Inc., and several Chinese vendors accelerate development, the XR landscape is set for intensified competition and rapid transformation in the coming years.
SHAFANA FAZAL
