Virtual Reality Spending to Double Every Year Through 2021, Says IDC

Virtual reality spending, as well as Augmented Reality (VR and AR) spending, will continue to grow, according to the International Data Corporation (IDC).

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Virtual Reality Spending to Double Every Year Through 2021, Says IDC

Chinese analyst International Data Corporation (IDC) reports virtual reality spending, along with augmented reality (VR and AR), will increase 100 percent or more each year through 2021.

The figures come from the Worldwide Semi-Annual Augmented and Virtual Reality Spending Guide, which is produced by IDC. The report argues that total spending on AR/VR products and services is to rise from $11.4 billion in 2017 to nearly $215 billion in 2021; achieving a compound annual growth rate (CAGR) of 113.2% along the way.

The report says the United States will be the region with the largest augmented reality and virtual reality spending total in 2017, estimated at $3.2 billion. That will be closely followed by Asia/Pacific – excluding Japan (APeJ) — on $3.0 billion and Western Europe notching up $2.0 billion.

The regions predicted to experience the fastest growth over the 2016-2021 forecast period are Canada (145.2% CAGR), Central and Eastern Europe (133.5% CAGR), Western Europe (121.2% CAGR) and the United States (120.5% CAGR).

The consumer segment will be the largest source of AR/VR revenues in each region in 2017. In the United States and Western Europe, the next largest segments are discrete manufacturing and process manufacturing. In contrast, the next largest segments in APeJ in 2017 are retail and education.

Over the course of the forecast, the consumer segment in the U.S. will be overtaken by process manufacturing, government, discrete manufacturing, retail, construction, transportation and professional services. Consumer spending will also lead the way in Western Europe, with discrete manufacturing, retail and process manufacturing showing strong growth by the end of the forecast.

To underline the movement in this market, IMAX recently underlined its commitment to concentrate on VR rather than 3D tech.

“The consumer, retail, and manufacturing segments will be the early leaders in AR & VR investment and adoption. However, as we see in the regions, other segments like government, transportation and education will utilise the transformative capabilities of these technologies,” says Marcus Torchia, research director of IDC Customer Insights & Analysis. “With use cases that span both AR & VR environments, we see a significant opportunity for companies to re-cast how users interact in business processes and everyday tasks.”

“Augmented and virtual reality spending is gaining traction in commercial settings and we expect this trend will continue to accelerate,” adds Tom Mainelli, program vice president, Devices and AR and VR at IDC. “As next-generation hardware begins to appear, industry verticals will be among the first to embrace it. They will be utilizing cutting-edge software and services to do everything from increase worker productivity and safety to entice customers with customized, jaw-dropping experiences.”

Installers and tech companies looking to exploit the sector need to keep an eye on where the investment is most likely to come from.

virtual reality spending, IDC, VR, augmented reality, AR

The IDC says that industry use cases that will attract the largest AR/VR investments are expected to evolve over the five-year forecast. In 2017, the largest industry use cases will be retail showcasing ($442 million), on-site assembly and safety ($362 million), and process manufacturing training ($309 million). By the end of the forecast, the largest industry use cases in terms will be industrial maintenance ($5.2 billion) and public infrastructure maintenance ($3.6 billion), followed by retail showcasing ($3.2 billion).

The consumer segment will be dominated by AR and VR games throughout the forecast, with total spending reaching $9.5 billion in 2021. The use cases that will see the fastest growth over the forecast period are lab & field (166.2% CAGR), therapy and physical rehabilitation (152.0% CAGR) as well as public infrastructure maintenance (138.4% CAGR).

Read next: KFC VR Training Game Won’t Let You Escape Until You Learn How to Make the Chicken

Spending on VR systems, including viewers, software, consulting services, and systems integration services, are forecast to be greater than AR-related spending in 2017 and 2018, largely due to consumer uptake of hardware, games and paid content. After 2018, the reports says AR spending will surge ahead as industries make significant purchases of AR software and viewers.

Whether the report turns out to be accurate or not in the detail, one thing is for sure AR and VR is set to grow big time, so integrators and their customers should start thinking seriously about how best to exploit its potential now and into the future.

This article premiered on our sister publication, CI Europe.