AR/VR spend in APeJ to reach US$34.9 billion by 2022

Source: IDC. Top use cases based on 2018 market share for AR/VR.

Asia/Pacific excluding Japan (APeJ) spending on augmented reality and virtual reality (AR/VR) will reach US$7.1 billion in 2019, an increase of 75.2% from the previous year, according to the latest IDC Worldwide Semiannual Augmented and Virtual Reality Spending Guide. IDC expects consumer and enterprise/commercial segments spending in AR/VR products and services to grow at a five-year compound annual growth rate (CAGR) of 70.7% over the forecast period (2017-22).

APeJ spending on augmented reality and virtual reality (AR/VR) will reach US$7.1 billion in 2019, an increase of 75.2% from the previous year, according to the spending guide. China will represent the largest AR/VR spending in the APeJ region with 83.0% share in 2018 and the spending is projected to take off at a five-year CAGR of 76.2% during the forecast period (2017-22).

IDC expects consumer and enterprise/commercial segments spending in AR/VR products and services to grow at a five-year CAGR of 70.7% over the forecast period (2017-22). Robust growth in AR hardware, software and services spending will drive overall AR spending quite ahead of VR spending by 2022.

“As the lines between digital and physical continue to blur, several progressive organisations across Asia Pacific are experimenting or deploying AR/VR technologies to prepare for the future of work. Use cases of AR/VR are emerging across sectors that include delivering more personalised customer experiences, accelerated product designing and go to market, AR-guided workflows and maintenance, as well as VR trainings for better learning outcomes and improved health and safety for employees,” said Avinav Trigunait, Research Director for Future of Work at IDC Asia/Pacific.

Content development and design software vendors such as Adobe and Autodesk are including AR/VR features in their solutions to make it easier to develop both content and applications. Also, new AR/VR software and hardware products launched in 2019 is expected to drive enterprises to explore the use of AR/VR technologies for a variety of new use cases. IDC forecasts that commercial segment spending in Asia Pacific will surpass consumer spending in 2019, added Trigunait.

Hardware will account for nearly half of all AR/VR spending throughout the forecast followed by software and services. The largest category of hardware spending will be host devices, but AR viewers will have the highest growth rate over the forecast period, (CAGR of more than 150%). Software contributes around 39.3% of the overall spend, of which AR software spending is leading in terms of growth with 108.2% CAGR (2017-22). Likewise, services spending is likely to proliferate by a CAGR for AR systems integration of 143.0%.

The consumer segment is the largest industry in AR/VR spending, which accounts for 41.2% of the overall spend in 2018. Commercial AR/VR solutions will see its combined share of overall spending increase from 58.8% in 2018 to more than 64.0% in 2022. Within the commercial segment, the industries that are expected to spend the most on AR/VR in 2018 include personal and consumer services followed by education and retail.

Use cases of AR/VR are emerging across sectors that include delivering more personalised customer experiences, accelerated product designing and go to market, AR-guided workflows and maintenance, as well as VR training for better learning outcomes and improved health and safety for employees.

Virtual reality games are a leading use case garnering around 28.03% of the overall AR/VR spend in 2018, followed by training, and video/feature viewing (VR). However, lab and field (post-secondary), and retail showcasing are the fastest growing use case in terms of compound annual growth rate over the forecast (2017-22).

“We see that the commercial segment is showcasing growth given the steady rise in spending throughout the forecast. On the other hand, augmented and virtual reality technology is rising (significantly in the consumer) gaming and entertainment industry-focused solutions,” said Ritika Srivastava, Associate Market Analyst at IDC Asia/Pacific.

“Furthermore, there are massive opportunities for industries including education, healthcare, retail and manufacturing to expedite their businesses in digital realm by implementing applications catering from customer interactions, product design and development, trainings and simulations etc.”

The China market will represent the largest AR/VR spending in the APeJ region with 83.0% share in 2018 and spending is projected to take off at a five-year CAGR of 76.2% during the forecast period (2017-22).