European augmented reality (AR) and virtual reality (VR) spending are projected to surge to $8.4 billion by 2027, reveals the latest Worldwide Augmented and Virtual Reality Spending Guide by the International Data Corporation (IDC). This growth reflects a robust 22.4 percent compound annual growth rate (CAGR) over five years.
The report highlights the burgeoning landscape of AR and VR, citing the recent market launches of Apple Vision Pro and the Meta Quest 3 as pivotal catalysts propelling VR’s accelerated growth, outpacing AR within the region.
Despite economic uncertainties, organizations are bolstering their IT budgets, with a strategic focus on AR and VR. These technologies are seen as instrumental in fostering innovation, enhancing hybrid work environments, and delivering cutting-edge customer experiences, Barbora Pavlikova, research analyst at IDC Data and Analytics, Europe, said.
AR Finds Strong Foothold Across Industries
Discrete manufacturing, transportation, and process manufacturing are slated to lead AR spending in 2024. AR adoption in manufacturing industries aims at optimizing processes through remote communication, streamlined asset maintenance, and training enhancements, enabling real-time task management. The central government sector is expected to witness rapid AR spending growth, particularly within Smart City initiatives.
Augmented maintenance remains a popular AR use case, but the consumer segment’s appetite for AR games is expected to drive substantial growth by 2027.
VR Reshapes Retail Experience and Work Dynamics
In the VR realm, retail emerges as the frontrunner in spending, with a shift back to prioritizing customer experiences following a period focused on profitability and cost containment. Virtual product showcasing and customization options have revolutionized the shopping journey, augmenting consumer interest and propelling spending within the retail sector.
Training stands out as the dominant VR use case in the commercial segment, driven by technological advancements, the evolving landscape of remote teams, and the rise of hybrid workplaces. This trend is anticipated to witness substantial growth, making collaborative VR solutions the fastest-growing VR use case by 2027.
The recent launches of Apple Vision Pro, Meta Quest 3, and the Bigscreen Beyond are poised to further invigorate VR spending across all covered industries, fostering a double-digit CAGR over the next five years.