The revenue of the augmented reality and virtual reality (AR/VR) market will be more than $162 billion in 2020 against $5.2 billion in 2016, said IDC.
The growth in the global augmented reality and virtual reality market will be a compound annual growth rate (CAGR) of 181.3 percent during 2015-2020.
“With smartphones powering inexpensive VR headsets, the consumer market is primed for new paid and user generated content-driven experiences,” said Chris Chute, vice president, Customer Insights and Analysis at IDC.
IDC analysts have already noted the impact of augmented reality headsets in the global healthcare industry. Industry verticals such as education, logistics and manufacturing will be making investing in augmented reality.
“The rise of new, less expensive hardware will put virtual and augmented reality technology within the grasp of a growing numbers of companies and individuals,” said Tom Mainelli, vice president, Devices & AR/VR at IDC.
IDC says sales of AR / VR hardware will generate more than 50 percent of revenues. AR / VR software revenues will be growing more than 200 percent year over year in 2016, but will quickly be overtaken by services revenues in the middle years of the forecast, as logistics and manufacturing demand enterprise-class support.
Revenues for VR systems, including viewers, software, consulting services and systems integration services, are forecast to be greater than AR-related revenues in 2016 and 2017, largely due to consumer uptake of games and paid content. After 2017, AR revenues will surge ahead, hitting critical mass in healthcare delivery and product design and management-related use cases, said IDC.
Asia Pacific (excluding Japan), the United States, and Western Europe will account for three quarters of worldwide AR / VR revenues. The three regions will generate comparable revenue amounts in 2016, but the United States is forecast to pull well ahead of the other two regions by 2020.
AR / VR technology is expected to see annual growth of more than 100 percent throughout the forecast period, said IDC.