The global XR display market is expected to grow 6% YoY in 2025, showing signs of recovery after a significant contraction in 2024, according to Counterpoint.
While the overall market growth remains modest, augmented reality displays are projected to surge 42% compared to just 2.5% growth for virtual reality displays. This disproportionate growth is being fueled by new AR smart glasses that leverage displays for AI-enabled applications rather than traditional media consumption.
The anticipated growth represents only a partial recovery from last year’s market decline, which occurred as device manufacturers worked to clear excess inventories and recalibrate their business strategies. Panel shipments will remain substantially below 2023 levels despite the positive trajectory.
LCD technology is expected to maintain its dominance in the VR segment, accounting for 87% of shipments in 2025. The versatility of LCD technology has allowed it to remain relevant across the price spectrum, from entry-level headsets to premium devices incorporating quantum dots and MiniLED enhancements. In the AR segment, OLED-on-Silicon displays are projected to see their market share decrease to 75%, ceding ground to MicroLED and LCoS alternatives. While Meta and Google have demonstrated prototype MicroLED smart glasses, they have yet to announce commercialization plans. Meanwhile, several Chinese manufacturers and Europe’s Even Realities are already marketing lightweight AR glasses featuring MicroLED displays with waveguide technology.
Looking further ahead, Counterpoint forecasts similar growth patterns for 2026, with AR display shipments increasing 38% and VR growing a modest 2.1%. However, the report cautions that US tariffs on Chinese products introduce significant uncertainty into the market outlook.
