Augmented reality and virtual reality (AR/VR) spending in Europe will reach $4,8-billion in 2024. AR/VR spending will record a 21,9% compound annual growth rate (CAGR) over the next five years to reach $10,2-billion in 2028.
According to the Worldwide Augmented and Virtual Reality Spending Guide published by International Data Corporation (IDC), stronger-than-expected growth is driven by increased spending for VR following the launch of new devices on the European market.
“European organisations recognize the importance of AR/VR technologies in their digital transformation journey. The technical progress has been accelerating, but a widening skills gap creates bottlenecks in the transformation,” says Barbora Pavlikova, research analyst with IDC Data and Analytics, Europe.
“Given the current ageing population and low supply of talent and employees’ lack of necessary new skills, AR/VR offers a great opportunity for organizations to bridge the skills gap by increasing their upskilling and reskilling initiatives via efficient immersive training.”
Discrete manufacturing will be the highest-spending industry sector in the AR market. AR helps optimise processes across the value chain and supports time and costs efficiencies by allowing visualisation and streamlining of complex concepts in real time and providing valuable insights into operations.
Healthcare will see the fastest medium-term growth in AR spending, with a 22.7% five-year CAGR. European healthcare organisations continue to prioritise investments in innovation, including interconnected workspaces and the expansion of virtual care and telehealth.
Reflecting the popularity of AR in manufacturing, augmented maintenance is the largest use case in terms of investments in AR, while training is forecast to post the highest CAGR by 2028. As digital transformation continues shaping new job roles and changing required skillsets, training becomes a crucial transformation tool.
On the VR side, retail will remain the largest industry in terms of spending, accounting for 17,8% of total B2B spending for VR. Online retail showcasing has revolutionised customer shopping experiences and accelerated investments in VR.
Banking will record the fastest growth in VR spending in the five-year forecast period.
The recent launches of Apple Vision Pro, Meta Quest 3, and Bigscreen Beyond will further push spending in VR, and all industries are forecast to post a double-digit five-year CAGR.
Training will remain the largest use case for VR, as immersive training is effective in improving the learning curve for employees. VR offers a great opportunity for businesses not only to provide training to new joiners but also to increase their upskilling and reskilling initiatives from within.
Collaboration will be the fastest growing use case, driven by continuous shift of organisations toward more flexible models of work and new ways of working, which requires increased investments in collaborative employee experience.