IDC sees augmented and virtual reality market growth (AR/VR) expanding enormously out to 2020. According to the IDC Worldwide Semiannual Augmented and Virtual Reality Spending Guide, global AR/VR revenues will grow at a 181.3 percent CAGR from 2015-2020 as revenues increase from $5.2 billion this year to more than $162 billion in 2020.
AR/VR devices, equipment and software and steadily advancing from the realm of science fiction to commercial reality, according to IDC. ¨Now with powerful smartphones powering inexpensive VR headsets, the consumer market is primed for new paid and user generated content-driven experiences,¨ Chris Chute, vice president, Customer Insights and Analysis, was quoted in an Aug. 15th press release.
Augmented and Virtual Reality Market Growth
Use of AR/VR headsets in healthcare are demonstrating the beneficial impact the technology can yield in specific industry sectors, Chute continued. ¨Over the next five years we expect to see that promise become realized in other fields like education, logistics, and manufacturing,¨ he said.
Declining hardware costs will fuel a sharp, steep rise in AR/VR sales over this five-year forecast period, IDC says. What people can actually do with it is the key question, however. ¨What people can do with that hardware will depend upon the applications and services that power it,¨ added Tom Mainelli, VP, Devices & AR/VR for IDC.
¨In the coming years, we expect developers to create a wide range of new experiences for these devices that will fundamentally change the way many of us do work.”
Sales of AR/VR hardware will account for 50 percent of global market revenues from 2015-2020, according to IDC. Software revenues are expected to grow faster and catch up, increasing more than 200 percent year-over-year in 2016. AR/VR services revenues will outpace both, and overtake software revenues in the middle years of the five-year forecast period, IDC says.
Sales of VR products and services, which include viewers, software, consulting and systems integration services, will exceed those from their AR counterparts in 2016 and 2017, largely due to sales of games and paid content. AR revenues will surge and achieve critical commercial mass thereafter based on growing use in healthcare delivery and product design and management.
Regionally, demand across the U.S., Western Europe and Asia-Pacific excluding Japan (APeJ) will account for 75 percent of AR/VR revenues out to 2020, according to IDC. Annual revenues will be about equal across all three regions this year, but grow much faster in the U.S. by 2020. That said, growth will exceed 100 percent in all three throughout the forecast period.