Vir­tual Re­al­ity Is Boom­ing

China's Foreign Trade (English) - - Industrial Watch - By Lynn Yu

Asia / Pacif ic ( exc lud­ing J a p a n) s p e n d i n g o n aug­mented re­alit y and vir­tual re­al­ity (AR/ VR) is fore­cast to reach USD 11.1 bil­lion in 2018, an in­crease of more than 100% from the USD 4.6 bil­lion which was spent the pre­vi­ous year. The lat­est up­date of the IDC’S World­wide Semi­an­nual Aug­mented and Vir­tual Re­al­ity Spend­ing Guide pro­vides a de­tailed view of in­vest­ments in AR/ VR prod­ucts and ser v ices which have gained an ex­cep­tional mar­ket mo­men­tum in 2018 and which are ex­pected to achieve a fiveyear com­pound an­nual growth rate (CAGR) of 68.5% through­out the fore­cast pe­riod (2017-2022).

“The avail­abil­ity of new stand alone VR head­sets, such as Ocu­lus Go from Face­book and Mi­rage Solo from Lenovo, is ex­pected to drive adop­tion and con­tent spend­ing in 2018 and be­yond, as these head­sets erad­i­cate the need for pair­ing with PCS or con­soles which used to drive costs higher for AR/ VR ex­pe­ri­ences,” said Avinav Tri­gu­nait, As­so­ciate Re­search Direc­tor at IDC Asia Pa­cific.

Be­ing the largest source of spend­ing, the con­sumer sec­tor will con­tinue to drive growth for AR/ VR prod­ucts and ser­vices, hold­ing a 51.3% share of over­all spend­ing in 2018. The growth will be pri­mar­ily driven by the avail­abil­ity of new VR head­sets which will lead to VR con­sumer spend­ing. In con­trast to this, AR spend­ing will

be dom­i­nated by the pur­chase of ser­vices, for ex­am­ple, the launch of Aug­mented Re­al­ity SDK plat­forms from both Google and Ap­ple are also ex­pected to drive spend­ing on ap­pli­ca­tion de­vel­op­ment and games for mo­bile plat­forms. In line with this trend, aug­mented re­al­ity games in the con­sumer sec­tor look very promis­ing and are pro­jected to hit a five-year CAGR of 90.9%, whilst vir­tual re­al­ity games will reg­is­ter a growth in fiveyear CAGR of 54.7% over the fore­cast pe­riod ( 2017-2022). As ex­pected, gam­ing is one of the most prom­i­nent uses of AR/ VR for con­sumers.

While con­sumer growth is an­tic­i­pated to grow steadily, ei­ther the com­mer­cial sec­tor or en­ter­prise spend­ing which rep­re­sents more than 48% of AR/ VR spend­ing in 2018 is ex­pected to over­take the con­sumer sec­tor in the next five years, with a 58% share by the end of the fore­cast pe­riod. Each of the five com­mer­cial sec­tors is fore­cast to reg­is­ter solid growth in spend­ing through­out the fore­cast pe­riod, led by dis­tri­bu­tion and ser­vices, as well as the pub­lic sec­tor. Dis­tri­bu­tion and ser­vices ( USD 2.0 bil­lion) will be the largest amongst the five com­mer­cial sec­tors in 2018, led by the per­sonal and con­sumer ser­vices, re­tail, and pro­fes­sional ser­vice in­dus­tries. The se­cond largest sec­tor will be man­u­fac­tur­ing and re­sources ( USD 1.7 bil­lion) with balanced spend­ing across the process man­u­fac­tur­ing, con­struc­tion, and dis­crete man­u­fac­tur­ing in­dus­tries.

The use of vir­tual re­al­ity games has the high­est share among all the sec­tors, gar­ner­ing a 39.4% share of over­all spend­ing in 2018. Like­wise, with the ris­ing hype in the mar­ket re­gard­ing aug­mented re­al­ity, there is an ex­pected in­cre­ment in the mar­ket for uses in dif­fer­ent sec­tors. In the dis­tri­bu­tion and ser­vices sec­tor, train­ing and re­tail show­cases will be the two largest uss, with a com­bined spend­ing of more than USD 329 mil­lion in 2018. Train­ing, in­dus­trial main­te­nance and project man­age­ment wi l l be the la rgest uses in the man­u­fac­tur­ing and re­source sec­tor. In the pub­lic sec­tor, in­fra­struc­ture main­te­nance and govern­ment train­ing will be the two largest uses in 2018.

“The uses for both AR and VR are in­creas­ing in the en­ter­prise seg­ment as com­pa­nies across sec­tors are de­vel­op­ing new IT and busi­ness ap­pli­ca­tions. Many en­ter­prises in the re­gion have al­ready de­vel­oped so­lu­tions uti­liz­ing AR and VR, for ex­am­ple, for de­sign and vi­su­al­iza­tion, cor­po­rate train­ing, f ield main­te­nance and cus­tomer ex­pe­ri­ence and mar­ket­ing ap­pli­ca­tions,” added Tri­gu­nait.

“AR/ VR tech­nolo­gies are quickly span­ning the chasm, with sev­eral re­al­world ap­pli­ca­tions emerg­ing ev­ery day in both the en­ter­prise and con­sumer seg­ments. Al­though, the adop­tion of same in Asia Pa­cific (ex­clud­ing China and Ja­pan) is slower when com­pared with the US or even the Chi­nese mar­ket, the growth tra­jec­tory is very promis­ing, with en­ter­prises wh i c h a r e u t i l i z i n g A R / V R tech­nolo­gies ac­cel­er­at­ing their dig­i­tal trans­for­ma­tion strate­gies. In terms of spend­ing, out of the 19 in­dus­tries cov­ered in this spend­ing guide, the ed­u­ca­tion in­dus­try is ex­pected to top the charts from 2019 un­til the end of the fore­cast pe­riod. Other key in­dus­tries driv­ing growth for AR/ VR in­clude re­tail, man­u­fac­tur­ing and health­care,” said Swati Chaturvedi, Se­nior Mar­ket An­a­lyst, IDC IT Spend­ing Team.

On a ge­o­graphic ba­sis, China will be the re­gion with the largest AR/ VR spend­ing, with a 91.3% share of the over­all spend­ing ($10.2 bil­lion) in Asi­apa­cific (ex­clud­ing Ja­pan) in 2018, and this trend is likely to rise over the fore­cast pe­riod (201722) with a five-year CAGR of 70.5%. De­spite this, AR/ VR tech­nol­ogy in other coun­tries in Asia Pa­cific (ex­clud­ing Ja­pan) are slowly gain­ing trac­tion and ex­per­i­ment­ing with how AR/ VR can im­prove the ex­pe­ri­ence in re­tail and other in­dus­tries.

The IDC World­wide Semi­an­nual Aug­mented and Vir­tual Re­al­ity Spend­ing Guide ex­am­ines AR/ VR op­por­tu­ni­ties and pro­vides in­sights into this rapidly grow­ing mar­ket and how the mar­ket will de­velop over the next five years. Rev­enue data is avail­able for eight re­gions, 12 in­dus­tries, 26 uses, and eleven tech­nol­ogy cat­e­gories. Un­like any other re­search in the in­dus­try, the com­pre­hen­sive spend­ing guide was cre­ated to help IT de­ci­sion mak­ers to clearly un­der­stand the in­dus­tryspe­cific scope and di­rec­tion of AR/VR ex­pen­di­tures to­day and in the fu­ture.

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