Worldwide spending on augmented reality and virtual reality (AR/VR) is forecast to achieve a five-year compound annual growth rate (CAGR) of 71,6% over the 2017-2022 forecast period.
According to a new update to the International Data Corporation (IDC) Worldwide Semiannual Augmented and Virtual Reality Spending Guide, spending on AR/VR products and services is forecast to reach $27-billion in 2018, a 92% increase year over year.
“IDC’s Worldwide Semiannual ARVR Spending Guide accounts for the latest technology developments, industry investments, and use case adoption in a comprehensive end user spending forecast product,” says Marcus Torchia, research director: customer insights and analysis at IDC. “This release incorporates the impact of recent industry developments, such as ARKit and ARCore, as well as trending adoption of screenless viewers in early deployments.”
The consumer industry maintains its position as the largest source of spending for AR/VR products and services over the course of the forecast period, reaching $53-billion by 2022, followed by spending in the retail, discrete manufacturing, and transportation industries, representing $56 -illion collectively by 2022.
Virtual reality gaming continues to be the dominant AR/VR use case in 2018 with spend expected to reach $7-billion.
Over the course of the forecast period, retail showcasing represents the use case with the largest CAGR of 119,3%, followed by lab and field and film and television amusement. New use cases for 2018 include public infrastructure maintenance, as well as 360-degree educational video viewing (K-12).
Host devices represent the top technology category for 2018 with spending to reach $10-billion, followed by VR software at $5,7-billion in 2018.
With 141,6% CAGR, AR viewers represent the top technology category over the forecast period followed by AR systems integration, and AR customer application development.
The consumer sector maintains its leadership position in 2018 with spending forecast to be $142,2-billion, while the distribution and services sector is estimated to achieve a 34,4% CAGR over the forecast period with spend to reach nearly $72-billion by 2022. Manufacturing and resources follows, estimated to achieve 18,5% CAGR over the forecast period while public sector is forecast to reach $33,5-billion by 2022.
“Commercial interest in both augmented and virtual reality continues to accelerate as new hardware ships, improved software appears, and more use cases evolve,” says Tom Mainelli, vice-president of devices and AR/VR at IDC. “A recent IDC survey of US IT decision markers showed a huge percentage of companies testing both technologies and we expect that appetite will only grow as major industry players roll out the next generation of AR and VR experiences throughout the rest of 2018.”
The US will maintain a strong foothold as the region with the largest CAGR over the forecast period at 99,1%. The Middle East & Asia, and Asia Pacific (excluding Japan) (APeJ) will experience similar CAGRs over the forecast period followed closely by Latin America. In 2018, China will top all regions in spend at $10,2-billion with top spending in host devices, followed by VR software and AR software.