Samsung ended 2016 as the VR platform market leader due to its early mover advantage, high-quality VR experience and aggressive go-to-market strategy for Gear VR. However, the competitive landscape for VR headsets is unsettled and fast moving where newly released products from major competitors can quickly alter the balance of the market, IHS Markit says.

In 2016, Samsung used its Gear VR headset as a powerful marketing tool to promote sales of its Galaxy S7 smartphone and implemented appropriate pre-order bundling strategies across many sales territories. In 2017, Samsung has taken a more targeted approach retaining the offer for the launch of the Galaxy S8 in USA and Australia, but dropping it in a number of European territories.

“The arrival of competing platforms is playing out against a backdrop where Samsung has dialed down its previously aggressive pre-order bundling centered on its flagship smartphones and the Gear VR,” Harding-Rolls said.

With this change in strategy – partly driven by the Galaxy S8’s already clearly differentiated feature set – and the higher price point of the new Gear VR including motion controller, IHS Markit expects unit sales of Gear VR to decline year-on-year, although it will remain the biggest premium platform for VR content across the major brands.

IHS Markit forecasts that consumer sales of Samsung’s Gear VR will decline by 9.6 percent by year’s end, from 4.56 million in 2016 to 4.12 million.