Wednesday, 05 June 2019 11:36

IDC forecast says AR/VR spending to touch US$160b by 2023

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IDC forecast says AR/VR spending to touch US$160b by 2023 Image by dlohner from Pixabay

Global spending on augmented reality and virtual reality will reach US$160 billion by 2023, up from the US$16.8 billion forecast for 2019, the research firm IDC says, adding that the five-year compound annual growth rate for AR/VR spending will be 78.3%.

The company said it was of the opinion that most of the growth in spending would come from the commercial and public sectors, with the highest growth to come from the financial (133.9 CAGR) and infrastructure (122.8% CAGR) over the five-year forecast period.

Estimates were taken from the IDC Worldwide Semiannual Augmented and Virtual Reality Spending Guide.

The manufacturing and public sectors would not be far behind, either, IDC said. By comparison, consumer spending on AR/VR was expected to deliver a modest CAGR of 52.2% from 2019-2023.

"A growing number of companies are turning to virtual reality as a way to drive training, collaboration, design, sales, and numerous other use cases," said Tom Mainelli, group vice-president, Devices and Consumer Research at IDC.

"Augmented reality uses cases are also growing with a wide variety of companies leveraging next-generation hardware, software, and services to fundamentally change existing business processes and bringing new capabilities to first-line workers who require hands-free technology."

IDC said commercial use cases forecast to receive the biggest investments in 2023 were training (US$8.5 billion), industrial maintenance (US$4.3 billion), and retail showcasing (US$3.9 billion).

The three consumer use cases for AR/VR (VR gaming, VR video/feature viewing, and AR gaming) were forecast to see spending of US$20.8 billion in 2023. Use cases that would see the fastest spending growth over the forecast period included AR for lab and field education, AR for public infrastructure maintenance, and AR for anatomy diagnostic.

The IDC figures predicted hardware would account for more than half of all AR/VR spending, followed by software and services. Strong spending growth (189.2% CAGR) for AR viewers would make this the largest hardware category by 2023, followed by VR host devices.

AR software would be the second fastest growing category, enabling it to overtake VR software spending by 2022. Services spending would be driven by strong growth from AR consulting services, AR custom application development, and AR systems integration.

"Augmented reality is gaining share in the commercial market due to its ability to facilitate tasks, provide access to resources, and solve complex problems," said Marcus Torchia, research director, Customer Insights & Analysis at IDC.

"Industries such as manufacturing, utilities, telecommunications, and logistics are increasingly adopting AR for performing tasks such as assembly, maintenance, and repair."

China is the country forecast to see the largest AR/VR spending totals throughout the five-year period, followed by the US. The two countries will account for nearly three-quarters of all spending worldwide by 2023.

The fastest growth in AR/VR spending will be in Western Europe (101.1% CAGR), followed by the US and China.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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