Consumer and enterprise/commercial segments spending in AR/VR products and services to grow at a five-year CAGR of 81 per cent over the forecast period (2018 to 2023). — Reuters photo
SINGAPORE: Asia/Pacific-excluding Japan (APEJ) spending on augmented reality and virtual reality (AR/VR) will reach US$7.5 billion in 2019, recording an increase of more than 100 per cent from the previous year, according to the latest IDC Worldwide Semiannual Augmented and Virtual Reality Spending Guide.
In a statement, IDC said it expected consumer and enterprise/commercial segments spending in AR/VR products and services to grow at a five-year compound annual growth rate (CAGR) of 81 per cent over the forecast period (2018 to 2023).
IDC predicted a considerable increase in AR/VR spending with the rising investments from distribution & services, and public sectors with the combined spending of US$30.7 billion by 2023.
Following this, Personal and Consumer Services, Retail, Education and Healthcare industries are the drivers of these sectors, respectively.
Amidst, the manufacturing and public sectors will follow closely. In comparison, consumer spending on AR/VR is expected to deliver a five-year CAGR of 70.2 per cent during 2018 to 2023, respectively.
“As new enterprise grade hardware hits the market and several enterprise software companies that offer content development and design tools such as Adobe, PTC and Autodesk, etc. add AR/VR capabilities to their platforms, many enterprises are exploring use of AR/VR for a variety of use cases such as training, maintenance, digital prototyping, architectural designs, retail showcase and remote collaboration,” said IDC Research director Future of Work, AR/VR and Mobility Avinav Trigunait.
“As organisations prepare for the future of work, the lines between digital and physical continue to blur and commercial spending is expected to further gain momentum over the next few quarters as more projects come out of pilots and hit production driving both headset volumes and more importantly software and services spend,” added Trigunait.
While commercial segment surpassed consumer spending last year and will continue to dominate over the forecast period, virtual reality games are the leading use case garnering around 19.3 per cent of the overall AR/VR spend in 2019, followed by training, and 360 Degree Educational Video Viewing (K-12). However, Augmented Reality Games, Anatomy Diagnostic, and Lab and Field (Post-Secondary) are the fastest growing use case in terms of compound annual growth rate over the forecast (2018 to 2023).
IDC reported that hardware would account for more than half of all AR/VR spending throughout the forecast followed by software and services.
“The largest category of hardware spending will be VR host devices, but AR viewers will have the highest growth rate over the forecast period, (CAGR of more than 200 per cent). AR software will be the second fastest growing category, enabling it to overtake VR software spending by 2023.
“Likewise, services spending is likely to proliferate by CAGRs of AR Consulting services 167.8 per cent. Thereby, the robust growth in AR hardware, software and services spending will drive overall AR spending quite ahead of VR spending by 2023,” it added.
:AR/VR technology can deal with most of the requirements of the future of businesses in this millennials workforce from facilitating better corporate training experiences to improvise collaboration, giving shape to new ideas to product design and development said,” IDC Asia/Pacific Associate Market analyst Ritika Srivastava.
“Furthermore, industries like Personal and Consumer Services, Construction, Education, Retail and Healthcare Provider are expected to be potentially disrupted by this technology with the combined spending of $29.5 billion by 2023,” added Srivastava.
According to IDC, China’s market would represent the largest AR/VR spending in the APEJ region with more than 87 per cent share in 2019 and the spending is projected to take off at a five-year CAGR of 84.7 per cent during the forecast period (2018 to 2023).
“While, AR/VR technology in Asean countries of Asia/Pacific (excluding Japan) are slowly gaining trend and experimenting on how AR/VR can improve the industry experience,” it added.