The augmented reality and virtual reality market size is projected to reach US$ 646.50 billion by 2031 from US$ 52.40 billion in 2023. The market is expected to register a CAGR of 36.9% during 2023–2031. 5G integration and mixed reality are likely to remain key trends in the market.
Augmented Reality and Virtual Reality Market Analysis
AR and VR technology provide numerous unique opportunities for both new and established enterprises and commerce. AR technology allows people in numerous professions to see computer-generated graphics in their field of view. Both technologies are widely used in several industries, including healthcare, media, gas and oil, tourism, education, gaming, entertainment, military, marketing, e-commerce, and retail.
Augmented Reality and Virtual Reality Market Overview
The global AR and VR industry is experiencing rapid expansion due to increased demand for mobile devices and R&D investments. AR/VR technology has poor demand and adoption compared to other consumer devices because of its high cost and visual impact. Leading multinational tech corporations are investing in VR/AR research and development to advance the technology.
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Augmented Reality and Virtual Reality Market: Strategic Insights
Market Size Value in US$ 27.96 billion in 2021 Market Size Value by US$ 252.16 billion by 2028 Growth rate CAGR of 36.9% from 2021 to 2028. Forecast Period 2021- 2028 Base Year 2021
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Augmented Reality and Virtual Reality Market: Strategic Insights
| Market Size Value in | US$ 27.96 billion in 2021 |
| Market Size Value by | US$ 252.16 billion by 2028 |
| Growth rate | CAGR of 36.9% from 2021 to 2028. |
| Forecast Period | 2021- 2028 |
| Base Year | 2021 |
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Augmented Reality and Virtual Reality Market Drivers and Opportunities
The Rising Applications in the Automotive Sector to Favor the Market
AR/VR in the automobile industry is increasingly becoming a standard due to the numerous applications and benefits it provides. It simplifies and improves the vehicle purchase and driving experience for all parties concerned. The automobile industry is aggressively adopting AR/VR to improve driving and vacation experiences. In fact, among all the major sectors, the automotive sector invested the most in AR and VR technologies. Some industry heavyweights, like Porsche, Chrysler, Hyundai, Mitsubishi, and Tesla, have already integrated the two technologies into various stages of vehicle production, marketing, and sales. This is driving the demand in the augmented reality and virtual reality market.
Rising Adoption in the Entertainment Sector
The virtual reality entertainment sector has had a significant impact on how consumers consume media, causing a paradigm change in everything from video games to films, live shows, and amusement park experiences. VR/AR (Virtual Reality/Augmented Reality) technology is already beginning to have an impact on broadcasting and streaming media. VR/AR broadcasting and streaming may provide viewers with a fully immersive experience, allowing them to interact with material in new and intriguing ways. This technology may be utilized to produce captivating experiences such as 360-degree films, interactive sports coverage, virtual reality music events, and much more.
Augmented Reality and Virtual Reality Market Report Segmentation Analysis
Key segments that contributed to the derivation of the augmented reality and virtual reality market analysis are technology, component, and end-user Industry.
- Based on technology, the augmented reality and virtual reality market is divided into augmented reality and virtual reality. The augmented reality segment held a larger market share in 2023.
- By component, the market is segmented into direct semiconductor components, sensors, and others.
- By end-user industry, the market is segmented into entertainment, educational, industrial, medical, real estate & architecture, retail, aerospace & defense, and others.
Augmented Reality and Virtual Reality Market Share Analysis by Geography
The geographic scope of the augmented reality and virtual reality market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South & Central America.
North America dominated the augmented reality and virtual reality market share in 2023. The region has countries such as the US and Canada, which are technologically advanced. The startup landscape in the US is continuously evolving, with emerging players getting breakthroughs in state-of-the-art AR and VR technologies.
Augmented Reality and Virtual Reality Market Report Scope
Augmented Reality and Virtual Reality Market News and Recent Developments
The augmented reality and virtual reality market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the augmented reality and virtual reality market are listed below:
- EON Reality proudly announces the launch of the inaugural Spatial AI Center in the Marshall Islands. This pivotal initiative is set to transform the islands’ approach to education, healthcare, and climate resilience, deploying immersive technologies to pioneer advanced learning experiences and sustainable development. (Source: EON Reality, Press Release, April 2024)
- Vuzix® Corporation (NASDAQ: VUZI) announced it has received new additional orders from two aerospace and defense firms to further develop and deliver waveguide-based display solutions in 2024. (Source: Vuzix Corporation, Press Release, April 2024)
Augmented Reality and Virtual Reality Market Report Coverage and Deliverables
The “Augmented Reality and Virtual Reality Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:
- Augmented reality and virtual reality market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Augmented reality and virtual reality market trends as well as market dynamics such as drivers, restraints, and key opportunities
- Detailed PEST/Porter’s Five Forces and SWOT analysis
- Augmented reality and virtual reality market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the augmented reality and virtual reality market
- Detailed company profiles
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Technology, Component, and End-User Industry
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russian Federation, Saudi Arabia, South Africa, South Korea, United Arab Emirates, United Kingdom, United States
Frequently Asked Questions
North America dominated the augmented reality and virtual reality market in 2023.
The rising applications in the automotive sector and rising healthcare applications are expected to drive the augmented reality and virtual reality market.
5G integration and mixed reality are likely to remain key trends in the market.
Immersive Gaze, Google LLC, EON Reality, Vuzix Corporation, Blippar Group Limited (Layar B V), Innovega Inc., imulanis Solutions Private Limited, Kanda ApS, YeppAR, Groove Jones, Quytech, The Intellify, Niantec, Microsoft, Apple, VironIT, Appricotsoft, Varwin, Monkhub Innovations are among the leading payers operating in the augmented reality and virtual reality market.
The augmented reality and virtual reality market size is projected to reach US$ 646.40 billion by 2031
The augmented reality and virtual reality market is expected to register a CAGR of 36.9% during 2023–2031
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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