Augmented Reality and Virtual Reality Market by Technology, Application, and Geography - Forecast and Analysis 2023-2027

Augmented Reality and Virtual Reality Market Analysis 2023-2027

Global augmented reality and virtual reality market size is estimated to grow at a CAGR of 52.37% between 2022 and 2027. The size of the market is forecast to increase by USD 364557.67 million. The growth of the market depends on several factors, including the increasing demand for AR and VR technology, product launches, and the increasing number of M&A activities. The high development costs associated with AR and VR apps is a major factor hindering the market growth.

This report extensively covers market segmentation by application (consumer and enterprise), technology (AR and VR), and geography (APAC, North America, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. 

What will the Size of the Augmented Reality And Virtual Reality Market be During the Forecast Period?

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Augmented Reality And Virtual Reality Market: Key Drivers, Trends, Challenges, and Customer Landscape

Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a decrease in demand for the market during the COVID-19 pandemic, a holistic analysis of drivers will help companies refine marketing strategies to gain a competitive advantage.   

Key Augmented Reality And Virtual Reality Market Driver

The increasing demand for AR and VR technology is notably driving the augmented reality and virtual reality market growth. Customers are increasingly adopting VR and AR technology, either for professional or private use. This adoption rate increased significantly in the last decade. An increasing number of customers are actively requesting VR solutions, whereas others are curious about virtual reality (VR) and are seeking information about it. Therefore, the increasing demand for VR and AR technology will boost the growth of the global AR and VR market during the forecast period. Technological innovations will further drive the demand for AR and VR applications during the forecast period as these applications will enable users to use the technology in a more user-friendly manner. Wearable technology platforms will likely enhance the utility of AR in everyday life. For instance, Google's Project Glass offers access to a variety of AR applications. The development of Android AR applications enables users to have a new experience, both for offline and online shopping. Virtual fitting rooms will help users in choosing the right size of clothing and reduce the frequency of returns. A similar benefit will be gained with regard to choosing a color for a new car or new furniture for an apartment. The growing application areas for AR and VR technology in different fields, such as education, medical, retail, and training, will further boost the growth of the global AR and VR market. 

Key Augmented Reality And Virtual Reality Market Trends

Growing funding in startup AR and VR companies from investors is the primary trend driving the augmented reality and virtual reality market growth. The AR and VR industry has gained the attention of vendors from diverse fields. This has led to an increase in funding for AR and VR technology from different companies as the application of AR is going beyond gaming to enterprises, healthcare, and marketing. Funding is primarily focused on display medium manufacturers and AR application developers. Funding for small startups from venture capitalists will promote technological advancements in the AR and VR market, which will boost the growth of the global AR and VR market during the forecast period. In March 2018, Magic Leap Inc. received $461 million in Series D funding from investors. Since its foundation in 2010, the company raised more than $2.3 billion in funding in March 2018 from its investors for the development of AR. The company developed a head-mounted virtual retinal display called Magic Leap One, which superimposes 3D computer-generated imagery over real-world objects by projecting a digital light field into users' eyes. Such funding will boost innovation in the global AR and VR market and drive its growth during the forecast period.

Key Augmented Reality And Virtual Reality Market Challenge

The risks associated with AR and VR applications may impede the augmented reality and virtual reality market growth. AR and VR give rise to new and different intellectual property that may contain sensitive information, which requires controls for security and privacy. High-definition 3D renderings of facilities, the detailed tracking of property and equipment locations and controls, and associated beacons, sensors, and connected footprints need appropriate protection, ranging from encryption and access controls to rights and asset management. Protecting the information that is being presented in an AR and VR world and ensuring its integrity also becomes critically important. AR and VR collect and process vast amounts of information about users and their environment. Therefore, privacy concerns are a major challenge in the global AR and VR market. Moreover, AR and VR technology can access the personal data of users and may pose a threat to their privacy. It can collect a lot of information from the users' social networking accounts. User privacy can also be threatened if hackers gain access to users' devices. Moreover, AR smart glasses are also associated with privacy-related concerns. These glasses automatically screen and process the users' environment, violating the privacy of users and those around them. The issues arising from the development and use of such products may hamper the growth of the global AR and VR market during the forecast period.

Key Augmented Reality And Virtual Reality Market Customer Landscape

Our analysis of the Life Cycle of the market indicates a movement from the innovator’s stage to the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries including the US, China, Japan, Germany, and the UK. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027.

Global Augmented Reality and Virtual Reality Market Customer Landscape

Who are the Major Augmented Reality and Virtual Reality Market Vendors?                                   

Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market 

Alphabet Inc. - The company operates under multiple segments, including Google Play Services, Google Cloud, and Google AR & VR with a high focus on AR and VR. The company offers solutions for augmented reality and virtual reality experiences, which allow users to take in information and content visually. AR dramatically expands the ways in which Google's devices can help users with everyday activities like searching for information, shopping, and expressing themselves.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including :

• Alphabet Inc.
• Apple Inc.
• Augmented Pixels Inc.
• Blippar Ltd.
• CyberGlove Systems Inc.
• Eon Reality Inc.
• HP Inc.
• HTC Corp.
• Innovega Inc.
• Lenovo Group Ltd.
• Magic Leap Inc.
• Microsoft Corp.
• PTC Inc.
• Samsung Electronics Co. Ltd.
• Seiko Epson Corp.
• Toshiba Corp.
• Vuzix Corp.
• Zugara Inc.
• Maxst Co. Ltd.

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak. 

What is the Fastest-Growing Segment in the Augmented Reality And Virtual Reality Market?

The market share growth by the AR segment will be significant during the forecast period. The extensive application of AR in various fields increases its demand. Moreover, several vendors manufacture hardware, such as headsets, smart glasses, and lenses for AR technology. The rise in popularity of AR technology is driving its use in various sectors such as enterprise, retail, healthcare, media and entertainment, and education. Several industries are using AR for streamlining their processes, training and troubleshooting, advertising and marketing, and entertainment purposes. The rising adoption of AR technology in different application sectors is likely to propel the growth of the AR segment. 

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The AR segment showed a gradual increase in market share from USD 12251.94 million in 2017 and continued to grow by 2021. The use of AR has been steadily rising as an entertainment, gaming, and advertising platform over the last several years. The introduction of wearable AR lenses in 2014, followed by the success of Pokemon Go in 2016, boosted the adoption of AR in mainstream applications, which led to its use across different application areas, such as marketing and search. For instance, in May 2019, Google, a subsidiary of Alphabet Inc., announced AR in Search. Users can view and interact with 3D objects right from search and place them directly into the real world, giving them a sense of scale and detail. Such innovations will increase the awareness and adoption of AR among users and will drive the growth of the AR segment during the forecast period. Furthermore, our report provides a brief analysis of the historical and forecast market share and their segment along with their reasons for growth from 2017 to 2027.

The growth of this segment is primarily attributed to the increasing adoption of augmented reality and virtual reality, which is driven by an increase in the global demand for the augmented reality and virtual reality industry.

Which are the Key Regions for the Augmented Reality And Virtual Reality Market?

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APAC is projected to grow at 35% by 2027. Another region offering significant growth opportunities to vendors is North America. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The presence of key vendors in the region is likely to augment the growth of the AR and VR market in North America. Several vendors, such as Alphabet, Facebook Inc., and Microsoft Corp., have established a strong presence in the US and are heavily investing in AR and VR technology. For instance, in October 2017, Microsoft Corp. invested in the development of Microsoft Reactor Studio in San Francisco for content creators of AR. Such investments are likely to enhance the technology and improve the results provided by applications that use AR and VR. For instance, in November 2019, Starbucks built its holiday-themed AR effects using Facebook's Spark AR and VR platform with new computer vision technology. Such investments and advancements in technology will drive the growth of the AR and VR market in the region during the forecast period. 

The rapid spread of COVID-19 impacted the economy of North America, especially the US, in 2020. Several commercial enterprises, industries, and institutions partially shut down their operations due to the imposition of lockdowns. The lockdowns in the region compelled people to work from home to mitigate the threat of COVID-19. This further increased the demand for platforms such as Microsoft Teams, Facebook, and ZOOM, which accelerated the deployment of AR and VR technology. In addition, in 2021, North America's economic conditions showed some signs of stabilizing, which was expected to spur the growth of the IT sector in the region by mid-2021. 

Segment Overview

Our report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by technology, application, and region.

• Technology Outlook (USD Million, 2017 - 2027)
  • AR
  • VR

• Application Outlook (USD Million, 2017 - 2027)
  • Consumer
  • Enterprise

• Region Outlook (USD Million, 2017 - 2027)
  • APAC
    • China
    • India
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America 
    • Argentina
    • Brazil

Augmented Reality And Virtual Reality Market Scope
Report Coverage	Details
Page number	120
Base year	2022
Historical year	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 52.37%
Market growth 2023-2027	USD 364557.67 million
Market structure	Fragmented
YoY growth (%)	31.83
Regional analysis	APAC, North America, Europe, the Middle East and Africa, and South America
Performing market contribution	APAC at 35%
Key consumer countries	US, China, Japan, Germany, and UK
Competitive landscape	Leading companies, Competitive Strategies, Consumer engagement scope
Key companies profiled	Alphabet Inc., Apple Inc., Augmented Pixels Inc., Blippar Ltd., CyberGlove Systems Inc., Eon Reality Inc., HP Inc., HTC Corp., Innovega Inc., Lenovo Group Ltd., Magic Leap Inc., Microsoft Corp., PTC Inc., Samsung Electronics Co. Ltd., Seiko Epson Corp., Toshiba Corp., Vuzix Corp., Wikitude GmbH, Zugara Inc., and Maxst Co. Ltd.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Augmented Reality And Virtual Reality Market Report?

• CAGR of the market during the forecast period 2023-2027
• Detailed information on factors that will drive the growth of the augmented reality and virtual reality market between 2023 and 2027
• Precise estimation of the size of the augmented reality and virtual reality market size and its contribution to the parent market.
• Accurate predictions about  upcoming trends and changes in consumer behavior
• Growth of the augmented reality and virtual reality industry across North America, APAC, Europe, the Middle East and Africa, and South America
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive details of factors that will challenge the growth of augmented reality and virtual reality market vendors

 

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