Virtual Reality Is Booming
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.