Worldwide spending on augmented reality and virtual reality (AR/VR) will reach $13.8 billion this year and grow to $50.9 billion in 2026, according to forecasts by the International Data Corporation (IDC).
The report released by the market intelligence group stated that the five-year compound annual growth rate (CAGR) for AR/VR spending will be 32.3%.
On a geographic basis, the United States will deliver the largest AR/VR spending totals, accounting for more than one-third of the market throughout the forecast. China will be the second largest region, growing to nearly a quarter of the overall market in 2026 with a five-year CAGR of 42.2%.
Virtual reality will account for more than 70% of all AR/VR spending throughout the 2022-2026 forecast while overall spending will be almost evenly split between consumer and commercial applications.
In AR technology, the report named commercial use cases that are forecast to receive the largest investments throughout the forecast as industrial maintenance and training which will both account for almost one-third of all AR-related spending.
In VR technology investments, the two largest named commercial use cases would be found in training and collaboration, capturing nearly 44% of the market by 2026.
In comparison, the two leading consumer use cases – virtual reality gaming and augmented reality gaming – will grow to about 25% of all AR/VR spending by the end of the forecast. Emergency response (82.9% CAGR), augmented reality games (57.8% CAGR), internal videography (47.8% CAGR), and collaboration (42.7% CAGR) will see the fastest spending growth over the forecast period.
The report further stated that, while commercial spending will trail consumer spending overall, a number of industries are expected to make strong investments in AR/VR applications over the next five years. The largest investments will come from discrete manufacturing, healthcare providers, professional services, education, and retail, while the strongest spending growth will be in industries such as healthcare, telecommunications, state/local government, and utilities.
In terms of Technology, standalone and tethered head-mounted displays (HMDs) are expected to account for more than one-third of all AV/VR spending throughout the forecast, followed by software.