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Last year was a difficult one for augmented reality and virtual reality (AR/VR) sector, according to the International Data Corporation (IDC). Worldwide shipments of headsets declined by 8.3%, IDC researchers noted.

The sector is primed for a strong rebound in 2024, however, IDC said.

Data from the Worldwide Quarterly Augmented and Virtual Reality Headset Tracker showed that 8.1 million units were sold worldwide in 2023.

Sony’s PSVR and Meta’s Quest 3 were “well received,” the report said. But economic pressures on consumers and less commercial spending put a damper on device sales.

AR/VR Headset Shipments

IDC suggests that 2024 may be a significantly different story: The AR/VR category is expected to grow at a robust 46.4% rate.

One of the driving elements will be a full year’s availability of Meta Quest 3, the third-quarter 2023 market leader with a 55.2% share. In addition, Vision Pro from Apple is expected to ship just under 200,000 units.

IDC stated that AR will enjoy a compound annual growth rate (CAGR) of 96.5% between 2023 and 2027. VR will have a CAGR of 30.1%. The combined category is expected to see shipments of 28.6 million units in 2027, for a 2023 to 2027 CAGR of 37.2%.

“While the new VR headsets are expected to drive volume, they also risk alienating some consumers as average selling prices trend upwards,” Jitesh Ubrani, the research manager for IDC’s Mobility and Consumer Device Trackers, said in a press release. “The high price tag of the Vision Pro will likely relegate the device to businesses, while the Quest 3, which is more accessible, is also pushing the limits of consumers’ wallets making VR a delight for the affluent, particularly as production ramps down on older and more affordable headsets.”

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Accelerating demand for gigabit speed commercial services is driving demand for Gigabit Ethernet ports at the expense of lower-speed ports, according to Vertical Systems Group (VSG).

The analysts say that Gigabit Ethernet (GE) ports are increasing at a double-digit compound annual growth rate (CAGR). They are displacing slower 100 Mbps and lower speed services, whose CAGRs are declining. VSG says that by 2027, the number of GE ports will exceed the number of ports operating at 100 Mbps or slower speeds.

“The big picture is that DIA [direct internet access] is the top service for 1+ Gbps speed revenue, and the predominant service for gigabit speed underlays supporting U.S. Carrier Managed SD-WAN customer networks,” wrote VSG principal and co-founder Rosemary Cochran in a blog post.

Commercial Gigabit Ethernet Demand

Cochran wrote that Ethernet Private Line services are the second largest source of gigabit revenue. They are driven by enterprise applications that require “low latency, point-to-point circuits for secure, dedicated access to cloud services.”

VSG offered its expectations for various Gigabit Ethernet speeds.

• 1 Gbps: This is the most widely installed gigabit service based on port installations and will be the top revenue source through 2027 across all Ethernet services. Despite this, VSG says that the revenue outlook is less bright as customers will upgrade to higher speed GE ports or migrate to alternatives such as wavelength services.
• 10 Gbps. This category will enjoy double-digit growth rates through 2027 due to service upgrades and expanding market demand. Revenue is projected to nearly double between 2022 and 2027.
• 100+ Gbps services have a relatively small but rapidly growing base of installed ports. Its attraction, in part, is its competitively lower pricing (per Gbps). VSG says that revenue is projected to almost five-fold between 2022 and 2027.

Moving forward, challenges will come from carrier managed SD-WAN/secure access service edge (SASE), wavelength services and dark fiber, VSG notes.

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Seventy-eight percent of Americans feel that the Internet is as important as other basic household utilities and 85% rely on it seven days per week, according to an internet attitude study conducted in October by Consumer Reports.

The survey, which was conducted by NORC at the University of Chicago, looks at Americans’ access to the Internet, cost and affordability. It is based on 2,087 responses.

Some key findings:

Access: Seventy-four percent of households access broadband through a fixed cable or connection,18 percent only have access through their smartphone data plan and 5% through DSL or dial-up.

Cost: Eighty-four percent pay at least $50 per month for access to the internet and 27% who have a broadband service at their home say it’s somewhat or very difficult to afford their monthly costs.

Affordability: Fifty-nine percent have heard of the Affordable Connectivity Program, know someone who uses it, have applied, are currently enrolled or have enrolled in the past. Forty-one percent have never heard of the program.  

“These survey results show that more people than ever depend on access to fast, reliable internet connections for work, education, and health care,” Jonathan Schwantes, Consumer Reports’ senior policy counsel, said in a prepared statement.

“The survey also shows that there are still too many people who struggle to afford monthly internet costs. Lack of access to affordable, high-speed broadband is increasing the digital divide, and having a detrimental impact on low-income and rural communities. We need collective action to ensure that every American has access to quality, affordable broadband.”””

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The availability of fiber internet service across the United States grew from 45.9% of households to 55.6% between December 2021 and June 2023, according to a study by BroadbandNow. The site said that 5.6 million fiber subscribers have been added in the last 18 months.

There is quite a spread between the states with the highest and lowest fiber penetration rates. The states with the highest rates are Alaska (44.17%), New Mexico (41.74%), Arizona (35.26%), Nevada (22.39%) and Colorado (21.53%).

Those with the lowest rates are North Dakota (0.17%), Vermont (0.22%), Montana (0.36%), Wyoming (0.40%) and South Dakota (0.42%).

Among the 10 most urban states, the average percentage of households with fiber access has risen steadily over the last two years:

·         December 2021: 59.9%

·         June 2022: 61.9%

·         December 2022: 64.4%

·         June 2023: 67.2%

For the 10 most rural states, the percentage of households with fiber internet access has increased less steeply. The average percentage of households with fiber internet over the last two years is as follows:

·         December 2021: 35.9%

·         June 2022: 36.4%

·         December 2022: 39.4%

·         June 2023: 42.1%

“The steady growth in fiber access underscores the increasing adoption and expansion of fiber-optic technology across states,” noted BroadbandNow editor-in-chief Tyler Cooper. “However, the disparity in penetration rates suggests varying levels of infrastructure development, policy implementation, and prioritization among states. States with higher penetration might have benefitted from early investments, favorable policies, or a higher demand for advanced communication infrastructure.”

The report relied on almost 300 million speed tests, machine learning, FCC Form 477 data and the new National Broadband Map Fabric. Fiber broadband was defined to only include fiber-to-the-home – not hybrid fiber co-ax or DSL.

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A 5G report commissioned by Boldyn Networks found that 71 percent of decision-makers at service provider and public and private sector organizations in the U.S., U.K. and Ireland feel more confident in 5G performance than ever before. They said that availability of 5G directly influences the performance levels within their organizations.

Their confidence, however, was accompanied by acknowledgement of challenges to increasing 5G coverage and capacity. The report suggests that a neutral host approach may be a good path forward for network densification.

“Neutral hosts: The answer to 5G densification in delivering an interconnected future” found that respondents in the U.S. (86 percent) and in the U.K. and Ireland (64 percent) say 5G availability now has a direct impact on performance within their organization. Seventy-eight percent of respondents believe 5G will deliver optimal performance within the next year, with U.S. respondents being the most optimistic.

5G Report

The respondents identified challenges: CAPEX requirements (cited by 29 percent), achieving ubiquitous connectivity (27 percent) and laying new fiber (24 percent). Almost all decision makers (96 percent) faced challenges deploying 5G infrastructure, with 80 percent expecting to exceed their planned spend.

Despite the challenges, there is a clear desire to embark on 5G rollout quickly. The study found that 47 percent of respondents say increasing the deployment of macro cells and small cells was a priority. Sixty percent of operators and public and private sector organizations have a clear network densification strategy, with U.S.-based organizations being more advanced on that front.

The report suggests that neutral host approach may be the way forward for network densification. Ninety-two percent of respondents say they are likely to use neutral hosts to ease 5G densification. Increased cost effectiveness, assuring sustainability credentials, and time efficiency are the three top rationales for this approach, the study shows.

Sapio Research prepared the report. Respondents included 200 telecommunications decision-makers, 200 5G enterprise experts, and 200 public sector IT decision-makers evenly split between the U.K./Ireland and the U.S.