COVID-19 pandemic played an enormous role in the market growth of the AR/VR technologies, as the businesses are now adapting to the model of remote work. In this article we will analyze the AR/VR market size, major players and industries shares, as well as major trends and our predictions for the AR/VR market development for the next couple of years.

Consumer Technology Association predicts AR/VR technologies to occupy a central position among the key technologies for the next decade. IDC estimates global spending on AR/VR technology to increase from 12 billion in 2020 to 72.8 billion dollars by 2024. The drastic shift happened during the last year, when the COVID-19 pandemic forced almost the entire world to shut down all the public events and entertainment. TrendForce noted that nearly 5.5 million AR/VR units were sold last year, predicting that in 2 years sales will grow to 26 million units per year, with 53% accounted for gaming content. The implementation of VR technologies in the entertainment industry went much further than just video games. It is becoming a new normal to watch a movie “together” while staying apart just by using VR headsets and a corresponding app.

Referring to the diverse potential of virtual and augmented reality apps, we can say that by 2025 the size of the market of AR and VR software in the public sector will be 16.1b dollars, and in the consumer - 18.9 billion. Compared to this year, the size of the world market will increase by more than 800% from 35 billion up to 296.9 billion US dollars. Not surprisingly, the game content occupies a leading position with an estimated value of 11.6 billion and it accounts for about 34% of the total AR/VR market. Other industries that possess significant shares on the AR/VR market are: healthcare - 5.1b or 15%, engineering - 4.76b or 14%, real estate - 2.6 b or 7%, retail - 1.6 b or 5%, and military - 1.4 b or 4%.

AR/VR share growth on the global market is determined by both AR/VR software products development as well as AR/VR hardware manufacturing. The major players on the market of VR hardware remain tech giants: Oculus VR, Google, HTC, Microsoft, Samsung, Sony. From time to time we see new players on the market, however the majority of them don't last long as they are unable to compete with the tech giants. Moreover, we observe significant price drop for the VR headsets, which is possible due to a large volume of production and reduction of the average total costs and average fixed costs. Obviously, small companies can not ensure the prime costs of the hardware on the same level as the Top players on the market, which leaves them a very moderate if any profit at all. It doesn't mean though that the market is closed for new companies. If you are considering this segment, we would suggest carefully choosing the niche free of the current main players.

Now let's take a closer look at some of the sectors that are rapidly implementing AR/VR technologies and how these technologies might impact the way of conducting businesses.

Remote Assistance

Technicians or engineers will be able to assess and correct the situation only with the help of a mobile phone or laptop, or an AR headset if such is available. Increase of internet speed and quality throughout the world and development of AR technologies will help in creating a much better opportunity to provide remote assistance and since it has a substantial B2B share, we can anticipate steady growth in this sector.

AR and vehicles

Auto manufacturers are interested in implementing  AR technologies to improve the quality and safety of driving. BMW, Chevrolet, Jaguar, Lexus, Mazda, Mercedes-Bez, MINI, Toyota and Volvo - these companies are already offering some AR features in their new vehicles. Heads up displays project the important data such as speed, gas level, directions etc. right  on the windshield, so that the driver would not be distracted from the road. However, the possibilities of the AR technologies extend much further. The manufacturers are working on the vehicle's mirrors. Thus, a rearview mirror of the future would detect blind spots and bring them to the driver's attention. While another rearview mirror will offer the hybrid view  - the panoramic view of what is behind you by combining the images from the rear and side view cameras. 

Fashion and beauty

AR and VR technologies offer a variety of opportunities for the fashion and beauty industries, especially for online shopping. AR/VR technologies give shoppers an option "to try it before you buy it". Metal, along with Tufts University and the Kellogg School of Management, have found that AR applications will improve sales by almost 22%. From glasses and lipstick to shoes and hats - all of that can be tried on without leaving the comfort of your home. However, the more complex is the clothes and/or accessories the more challenging it is to create a smooth real looking fitting experience. Despite the rapid implementation of AR technologies in the fashion industry, we still do not have a fully functional virtual fitting room which would allow the shoppers to try on the clothes in real time from their home. Read more about AR/VR trends in beauty and fashion industries in our next article.

City construction and Smart City

Architecture and city construction industries do not stand still and stride confidently forward, and tools such as VR and AR simplify and accelerate this movement. Architects can use the virtual environment to assess space and make informed decisions. Moreover, professionals can replace 2D rendering with the AR/VR experience when developing a new project and not only increase their productivity but also minimize the chance of a mistake. We strongly believe that AR/VR will become an integral tool for any construction and/or design project in the next couple of years. Usage of AR visualizations has already changed the landscape of public services following the concepts of Smart City.

Medicine

Healthcare industry was one of the first to realize the benefits and endless opportunities of AR/VR technologies. In contrast to some sectors that are very careful about applying technological changes, medicine is all about rapid implementation of innovative solutions. Covid-19 pandemic accelerated the process even more and boosted the surge in AR/VR software designed to assist healthcare professionals with working and learning remotely. Virtual anatomy labs became an integral part of many medical schools’ curriculums. But even fully trained surgeons discovered the benefits of the VR applications, thus, many of them prefer to perform the “rehearsal surgery”  in virtual reality first, before they move to the actual case. The need to conduct appointments virtually also has found its realization via AR/VR apps, and now doctors can  not only assess the patients’ conditions but also engage them in physiotherapy.

Final thoughts

We have analyzed the current AR/VR market as well as the trends for the next couple of years. It is obvious that AR/VR technologies have an enormous potential for implementation in various fields and the rapid growth of the market gives us a clue that  the major changes still have to come.  If you are considering investing in a new project, take a look at the AR/VR market as it shows very promising figures and trends. Our company has a large team of professionals that specialize in innovative AR/VR software development. If you have an idea, or want to get a free consultation, please feel free to contact us and we’ll be happy to assist you.