Augmented Reality And Virtual Reality Market Analysis North America, APAC, Europe, Middle East and Africa, South America - US, China, Germany, UK, Japan - Size and Forecast 2024-2028

Augmented Reality and Virtual Reality Market Size 2024-2028

The augmented reality and virtual reality market size is estimated to grow by USD 442.99 billion at a CAGR of 50.22% between 2023 and 2028. The market's growth trajectory is influenced by multiple factors, notably the rising appetite for AR and VR technology, frequent product introductions, and the uptick in mergers and acquisitions. However, a significant obstacle to market expansion lies in the substantial development expenses linked with AR and VR applications. Despite the growing demand and innovation in these technologies, the considerable investment required for their development acts as a deterrent to market growth. Nevertheless, the increasing adoption of AR and VR solutions across various industries underscores their potential to revolutionize experiences and processes. The automotive augmented reality and virtual reality market is expanding rapidly, driven by innovations in healthcare AR and VR technologies. The latest augmented reality and virtual reality market report highlights significant growth trends, reflecting the increasing integration of AR and VR market solutions in various automotive applications. Thus, while factors such as technology demand, product launches, and corporate consolidation propel market advancement, the formidable barrier of development costs poses a challenge to its full realization.

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

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Market Segmentation

By Technology

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 companies manufacture hardware, such as headsets, smart glasses, and lenses for AR technology. The rise in popularity of this 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 in different application sectors is likely to propel the growth of the segment. 

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The AR segment showed a gradual increase in market share from USD 14.03 billion in 2018. The use 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. In the AR and VR market, the automotive augmented reality and virtual reality market is experiencing notable growth. According to the augmented reality and virtual reality market report, advancements in AR and VR technologies are fueling demand, particularly within automotive applications and across the broader AR and VR market landscape. Such innovations will increase the awareness and adoption of these among users and will drive the growth of the 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.

By Region

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APAC is projected to grow at 42% by 2028. Another region offering significant growth opportunities to companies 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 companies in the region is likely to augment the growth of the market in North America. Several companies, such as Alphabet, Facebook Inc., and Microsoft Corp., have established a strong presence in the US and are heavily investing in this 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 market in the region during the forecast period. 

Augmented Reality and Virtual Reality Market Dynamics and Customer Landscape

The market is propelled by advancements in 3D models and smartphones, enabling immersive experiences through AR and VR. With heads-up displays and head-mounted displays (HMDs), industries like VR gaming and the infotainment industry flourish. In manufacturing and industrial automation, simulations and machine-to-machine communication streamline operations. Investment activity fuels innovation in VR exposure therapy and self-monitoring devices. Engineers leverage AR for information search, while the automobile industry integrates VR for design and testing. As SoC integration advances, VR and AR redefine interactions across sectors, promising transformative impacts on society. In the industrial automation industry, manufacturing industries are leveraging augmented reality (AR) and virtual reality (VR) technologies to create immersive 3D environments, enhancing machine-to-machine communication (M2M) and integrating Internet of Things (IoT) capabilities for optimized operations. Our researchers studied the data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market. 

Key Market Driver

The increasing demand for AR and VR technology is notably driving the 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 will boost the growth of the market during the forecast period. Technological innovations will further drive the demand during the forecast period as these applications will enable users to use the technology in a more user-friendly manner. The augmented reality industry is rapidly expanding, with the augmented reality market size showing impressive growth. Augmented reality market size trends reflect a strong upward trajectory, driven by technological advancements and increasing adoption across various sectors.

Moreover, 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 concerning 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 market. 

Significant Market Trends

Growing funding in startup AR and VR companies from investors is the primary trend driving the market growth. The industry has gained the attention of companies 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 market, which will boost the growth of the market during the forecast period. 

Moreover, in March 2018, Magic Leap Inc. received USD461 million in Series D funding from investors. Since its foundation in 2010, the company raised more than USD 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 market and drive its growth during the forecast period.

Major Market Challenge

The risks associated with AR and VR applications may impede market growth. They 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. They collect and process vast amounts of information about users and their environment.

Therefore, privacy concerns are a major challenge in the market. Moreover, they 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 market during the forecast period.

Key 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 Augmented Reality Market Size Trends Forecast 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 2023 to 2028. In the burgeoning augmented reality industry, the augmented reality market size continues to grow significantly. Recent augmented reality market size trends highlight an accelerating market, fueled by innovations and expanding use cases in both consumer and enterprise applications.

Global Market Customer Landscape

Who are the Major Market Companies?                                   

Companies 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 offers solutions for augmented reality and virtual reality experiences, which allow users to take in information and content visually. AR dramatically expands how 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 companies, 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 companies 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 companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak. 

Segment Overview

The Augmented Reality and Virtual Reality market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.

• Technology Outlook 
  • AR
  • VR

• Application Outlook 
  • Consumer
  • Enterprise

• Region Outlook
  • 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

Market Analyst Overview

The Augmented Reality and Virtual Reality market sees exponential growth fueled by 5G networks and innovations in AI. In consumer electronics and gaming applications, AR and VR redefine experiences, while cloud-based AR applications enhance e-commerce and tourism businesses. Industrial automation benefits from gesture-tracking devices and machine-to-machine communication, while architecture and real-estate firms leverage 3D environments for visualization. HMDs and head-up displays revolutionize aerospace & defense and consumer goods, while security compliance drives adoption in network infrastructure. With media & entertainment embracing immersive technologies, the market expands across sectors, propelled by advancements in semiconductor components and software development.

Moreover, in the market, commercial industries leverage immersive experiences through AR and VR, transforming operations in manufacturing and industrial automation. HMDs and display walls redefine interactions in IT & telecommunication, while position trackers enhance experiences in travel & tourism. Machine-to-machine communication drives connectivity in IoT, benefiting from advancements in industrial tools and projectors. Virtual reality gaming captivates audiences, while technical expertise fuels innovation in mental health applications. With 3D environments and cameras facilitating immersion, AR and VR continue to shape diverse industries, driven by technological advancements and growing demand.

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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
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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