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Augmented Reality and Virtual Reality Market Overview
The global augmented reality (AR) and virtual reality (VR) market was valued at $6,158.5 million in 2017 and is expected to witness a CAGR of 58.1% during 2018–2023. The increasing penetration of smartphones and tablet computers and soaring demand for AR and VR in the retail and e-commerce sectors and business enterprises are some of the key factors driving the market across the globe.
On the basis of device type, the AR market has been categorized into head-mounted display (HMD) and heads-up display (HUD). Of these, the market for HMDs is expected to witness faster growth, owing to the increasing demand for lightweight displays, technological advancements, and increasing patented product portfolio of companies. AR-based HMDs are increasingly gaining popularity in applications such as tourism, automotive, military, gaming, and education.
GLOBAL AUGMENTED REALITY AND VIRTUAL REALITY MARKET, BY COMPONENT, $M (2013 - 2023)
On the basis of application, the VR market has been classified into consumer, commercial, healthcare, enterprise, aerospace and defense, and others. Among these, the consumer category held the largest share in the market in 2017 owing to the increase in the demand for VR games. This can be attributed to the efforts made by the companies engaged in VR content development to cater to the growing needs of gamers. Some of the key players in this market are Oculus VR, Samsung Electronics Co. Ltd., Sony Corporation, HTC Corporation, FOVE Inc., Nintendo Co. Ltd., and Electronic Arts Inc.
Based on geography, the AR and VR market has been categorized into North America, Europe, Asia-Pacific (APAC), and rest of the world (RoW). Among these, North America held the largest share in the market in 2017 due to the rapid adoption of new technologies by the masses and presence of several augmented & virtual reality companies. The U.S. is a major contributor to the growth of the market in the region.
AR and VR Market Dynamics
The use of AR and VR technologies is not confined to enterprise or commercial applications; it has extended to other niches such as healthcare, education, and media and entertainment. A notable trend that is being observed in the AR and VR market is the popularity of VR concerts and 360-degree virtual tours. Bands including Coldplay have teamed up with Live Nation to bring live musical concerts to the audience in the VR format. Moreover, these technologies are being tested by organizations such as the National Basketball Association (NBA) and broadcasters, such as Entertainment and Sports Programming Network (ESPN), Fox Sports, and Turner Sports, as well as in sports event like the National Hockey League (NHL).
The increasing demand for AR and VR from enterprises is fueling the growth of the AR and VR market across the globe. The enterprise sector is considered one of the most important target markets for AR and VR. The application potential of these technologies in enterprises is huge, with all major device manufacturers, app developers, and solution providers targeting the sector. Moreover, most of the Fortune 500 companies have started experimenting with AR and VR technologies, and some of them have already started pilot projects. The main objective of these pilot projects is to find out how these technologies can be helpful in increasing the productivity and cutting down the operational costs.
Although beneficial in a lot of applications, AR and VR technologies also pose some threats to the physical and emotional wellbeing of users, which hamper the AR and VR market growth. A certain percentage of users have experienced anxiety and stress after using VR headsets. Other negative health issues reported by the users are nausea, motion sickness, and severe eyestrain, if closed headsets are worn for a prolonged period. Moreover, fully immersed VR headsets completely disconnect the users from the real environment. Further, the prolonged focus of the eye on the display can cause retinal radiation, which is a potential cause of eye cancer.
AR and VR Market Competitive Landscape
The global AR and VR market is highly competitive in nature. Key market players are focusing on partnerships and product launches to expand their market foothold. In the recent past, product launches were the major activities across the globe. For instance, in March 2018, DAQRI LLC. launched DAQRI Worksense, which is an AR productivity suite offering remote expert support for the management of operations via AR, critical assessment of actual facility or a piece of equipment, and design comparison in operations for improving business processes. DAQRI also unveiled the DAQRI Worksense Pro Subscription, a subscription service delivering a complete AR package that includes DAQRI Worksense software and wearable DAQRI Smart Glasses.
Similarly, in October 2017, EON Reality Inc. launched a VR level crossing safety application for Network Rail. This application delivers safety information through story-driven VR scenes, followed by interviews with family members and experts. Some of the key players in the augmented reality and virtual reality market are Qualcomm Technologies Inc., PTC Inc., Intel Corporation, Samsung Electronics Corporation Limited, Himax Technologies Inc., Microsoft Corporation, Sony Corporation, Seiko Epson Corporation, Google LLC, and Vuzix Corporation.
Key Questions Addressed/Answered in the Report