ABI Research Shows Augmented Reality on the Rise with Total Market Worth to Reach $100 Billion by 2020

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Augmented Reality (AR) and Virtual Reality (VR) continue to be hot topics in the technology industry. While VR continues to make waves in the press, AR will prove to be the bigger market in time, projected to reach approximately US$100 billion in total market worth by 2020, according to the latest market study by ABI Research , a leader in technology market research.

Read ABI Research’s Augmented Reality Applications and Verticals report.

The company’s report shows AR smart glasses are forecast to ship 21 million total units in 2020, with a Compound Annual Growth Rate (CAGR) of 78% from 2015 to 2020. Total revenues for the AR market will follow a similar trend, with an estimated CAGR of 73% from 2015 to 2020, and encompassing both dedicated AR hardware sales and mobile, as well as dedicated AR content and software revenues. The revenues will be split between a number of major verticals, including education, gaming, healthcare, industrial, and retail, among others. The Virtual Reality market will see similar growth rates, but in a much smaller market compared to AR.

“We expect revenues to primarily favor the healthcare and industrial verticals, owning approximately 54% of the market, thanks to more progressive technology adoption habits along with strong use case applicability,” says Eric Abbruzzese, Research Analyst at ABI Research. “On the other hand, mobile devices being used for AR will have a larger user base than dedicated AR devices across all verticals.”

Specifically, the report finds that industrial and healthcare applications will continue to be the dominant verticals through 2020. In addition, more consumer-focused verticals, such as gaming and media & entertainment, will primarily be found on mobile devices, at least until more dedicated AR devices support unique gaming content, such as the Microsoft HoloLens being used for Minecraft.

“Mobile devices will primarily account for software and content revenues, and they will better target consumer audiences than more expensive dedicated AR devices like smart glasses,” continues Abbruzzese. “The high-end focus of verticals like healthcare and industry will demand high-end devices, and thus will see higher hardware revenues. However, the more budget-minded consumer crowd will prefer low cost mobile AR experiences, in a similar fashion to Mobile Virtual Reality devices.”

Mobile AR is already pervasive today—with marketing, retail and gaming experiences—but more advanced mobile AR content will serve as an entry point for both consumers and enterprises for AR, as well as act as a test for whether further investment in more advanced devices is desired.

These findings are part of ABI Research’s Augmented Reality, Virtual Reality and Gaming Technologies Research Service, which includes research reports, market data, insights and competitive assessments.

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