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Augmented reality device market to approach $100B in 2020

Posted: 23 Nov 2015     Print Version  Bookmark and Share

Keywords:ABI Research  virtual reality  augmented reality  smart glasses 

According to the latest report by ABI Research, while virtual reality (VR) continues to generate some noise in the press, augmented reality (AR) will prove to be the bigger market in time, expected to reach nearly $100 billion in total market worth by 2020.

The company revealed that AR smart glasses are forecast to ship 21 million total units in 2020, with a CAGR of 78 per cent from 2015-2020. Total revenues for the AR market will follow a similar trend, with an estimated CAGR of 73 per cent from 2015-2020, and encompassing both dedicated AR hardware and mobile sales, 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 VR market will see similar growth rates, but in a much smaller market compared to AR.

"We expect revenues to primarily favour the healthcare and industrial verticals, owning approximately 54 per cent of the market, thanks to more progressive technology adoption habits along with strong use case applicability," said 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 found 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," noted 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 VR devices."

Mobile AR is 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.

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