Spending on virtual reality (VR) and augmented reality (AR) will grow to $18.8 billion next year globally, according to a study by International Data Corporation (IDC). That’s an increase of 78.5% from 2019.
VR/AR products and services are likely to attract an annual growth rate of 77%.
IDC expects commercial sectors to lead much of the growth from 50% in 2020 to 68.8% in 2023.
Consumer spending on VR and AR technologies is driven by VR games ($3.3 billion) and VR feature viewing ($1.4 billion). But consumer spending is a relatively small segment, accounting for just over one-third of all AR/VR spending in 2020.
Retail is predicted to become a dominant driver of AR and VR in 2020 at a spend of $1.5 billion, followed by discrete manufacturing ($1.4 billion).
Securities and investment services, and banking sectors are also investing more in these technologies.
“AR/VR commercial uptake will continue to expand as cost of entry declines and benefits from full deployment become more tangible. Focus is shifting from talking about technology benefits to showing real and measurable business outcomes, including productivity and efficiency gains, knowledge transfer, employee’s safety, and more engaging customer experiences,” said Giulia Carosella, research analyst, European Industry Solutions, Customer Insights & Analysis.
By 2020, commercial use of AR and VR spending will be led by training ($2.6 billion) and industrial maintenance ($914 million) sectors.
But AR and VR are different technologies, so which one’s attracting higher investment? According to IDC, VR solutions will attract higher spending.
China is contributing a lion share of $5.8 billion in spending, followed by the US at $5.1 billion. Western Europe ($3.3 billion) and Japan ($1.8 billion) rank third and fourth.
“Across enterprise industries, we are seeing a strong outlook for standalone viewers play out in use case adoption. Enterprises will drive much of these high-end headset adoption trends. In the consumer segment, more affordable viewer models for gaming and entertainment purposes will see the broadest industry adoption,” said Marcus Torchia, research director, Customer Insights & Analysis.