FRAMINGHAM, Mass., November 30, 2022 – Global spending on augmented reality and virtual reality (AR/VR) is expected to reach $13.8 billion this year and reach $50.9 billion in 2026, according to the International Data Corporation (IDC) Worldwide Augmented and Virtual Reality Spending Guide. The five-year compound annual growth rate (CAGR) of AR/VR spending will be 32.3%. Virtual reality will account for more than 70% of all AR/VR spending throughout the 2022-2026 forecast, while overall spending will be almost evenly split between consumer and commercial applications.
“The AR/VR market has been advancing slowly but surely in recent years and is poised to advance further in the years to come,” said Ramon T. Llamas, Research Director, Mobile Devices and AR/ VR at IDC. “Newly announced and upcoming hardware from major brands is a marked improvement over first-generation devices. The deeper proliferation into current use cases and the addition of new ones highlights the versatility that the AR/VR. And with those, there’s a whole host of services to help bring them to fruition. The result: a mature market ready to thrive for consumers and commercial users alike.”
The named business use cases that are expected to receive the largest AR investments throughout the forecast are industrial maintenance and training. Together, these two use cases will account for almost a third of all AR spend. In VR technology investments, the two largest named business use cases are in training and collaboration, capturing nearly 44% of the market by 2026.
By comparison, the top two consumer use cases – virtual reality games and augmented reality games – will reach around 25% of all AR/VR spending by the end of the forecast.
The use cases that will see the fastest spending growth over the forecast period are emergency response (82.9% CAGR), augmented reality games (57.8% CAGR), videography internal (47.8% CAGR) and collaboration (42.7% CAGR). Sixteen other use cases are expected to have five-year CAGRs of 30% or more.
“IDC introduced 34 additional business use cases to the Worldwide AR/VR Spending Guide in 2022, including loosely integrated, highly mobile, and remote use cases, as well as emerging virtual collaborations.” said Marcus Torchia, VP of Research, Data & Analytics. “Enterprises are deploying AR and VR investments in a variety of ways, including headset-centric and personal-device-centric approaches, as well as on-premises and through cloud-service-supported implementations. This flexibility allows businesses to realize positive returns and short payback periods on their investments.”
While commercial spending will broadly follow consumer spending, a number of industries are expected to invest heavily in AR/VR applications over the next five years. The largest investments will come from discrete manufacturing, healthcare providers, professional services, education and retail. The industries that will see the highest spending growth over the forecast period will be healthcare, telecommunications, public and local government, and utilities.
From a technology standpoint, standalone and connected head-mounted displays (HMDs) will account for more than a third of all AV/VR spending throughout the forecast, followed by software, which will reach more than a quarter of all expenditure by the end. of the forecast. Host devices and connected HMDs will experience the fastest spending growth with five-year CAGRs of 59.5% and 57.9%, respectively. Software will also experience strong growth with a CAGR of 41.3%.
On a geographic basis, the United States will provide the largest AR/VR spending totals, accounting for more than a third of the market throughout the forecast. China will be the second largest region, reaching nearly a quarter of the overall market in 2026 with a five-year CAGR of 42.2%.
The IDC Worldwide Augmented and Virtual Reality Spending Guide (V2 2022) examines augmented reality (AR) and virtual reality (VR) opportunities from the perspective of use cases, technology, industry and geography. Spend data is available for nine regions, 20 industries, 80 use cases and 12 technology categories. The data provides valuable insights into this rapidly growing market and how the market will develop over the next five years.
About IDC’s Spending Guides
IDC’s Spend Guides provide a granular view of top technology markets from a regional, industry vertical, use case, buyer, and technology perspective. Spend Guides are delivered via a pivot table format or a custom query tool, allowing the user to easily extract meaningful insights into each market by visualizing data trends and relationships.
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International Data Corporation (IDC) is the world’s leading provider of business information, consulting services and events for the information technology, telecommunications and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on IT technology, benchmarking, and procurement, as well as industry opportunities and trends in more than 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community make fact-based technology decisions and achieve their key business goals. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world leader in technology media, data and marketing services. To learn more about IDC, visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC blog for industry news and insights.
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