Consumer spend on VR, AR to rise 92% in 2018
by FRANK ELEANYA
June 12, 2018 | 3:34 pm| | | Start Conversation
Consumers are expected to spend $27 billion, a 92 percent increase year over year, on augmented reality (AU) and virtual reality (VR) products and services in 2018, according to new update by the International Data Corporation (IDC).
The report is update to the IDC’s Worldwide Semiannual Augmented and Virtual Reality Spending Guide.
IDC also expects worldwide spending on AR and VR to hit a five-year compound annual growth rate (CAGR) of 71.6 percent over the 2017-2022 forecast period.
To be sure, Augmented Reality (AR) refers to a technology that adds digital elements to a live view often by using the camera on a smartphone. Simply put, computer generated graphics are used to augment a live environment. For instance, picture a wall turning into a big computer-generated screen or your coffee turning into a monopoly board. A vivid example of AR is Pokemon Go, a game developed by Niantic for iOS and Android devices.
Virtual Reality (VR) on the other hand is a technology built to help the user interact with a virtual world. VR is usually achieved wearing a VR device like Oculus Rift or Google Cardboard. These devices transport the user a number of real-world and imagined environments, stimulating the user’s vision and hearing, by making him or her believe he or she is living the simulated reality firsthand.
Consumer industry, according to the IDC update, remains the largest source of spending for the AR/VR products and services over the course of the forecast period, reaching $53 billion by 2022, followed by spending in the retail, discrete manufacturing, and transportation industries, representing $56 billion collectively by 2022.
“Commercial interest in both augmented and virtual reality continues to accelerate as new hardware ships, improved software appears, and more use cases evolve,” Tom Mainelli, vice president of Devices and AR/VR at IDC said. “A recent IDC survey of US IT decision markets showed a huge percentage of companies testing both technologies and we expect that appetite will only grow as major industry players roll out the next generation of AR and VR experiences throughout the rest of 2018.”
However analysts at Retail Dive noted that the progress made so far in the retail side of VR and AR market has been below expectation. The pointed out that launch of retail products has only picked up about nine months ago as several retailers launched mobile AR-enhanced apps designed to improve customer experiences and drive sales.
“VR has been deployed to even lesser degree, though there have been some notable employee training applications of the technology by retailers,” the analysts said.
Mike Murphy, writing for the Quartz, agrees that retail has not measured up to the hype of the market.
“Since Facebook’s Oculus and HTC released their first proper consumer-ready VR headsets in 2016 (followed swiftly by Sony later in the year), it’s felt like we’ve been on the cusp of a future envisioned by science-fiction writers for years, where we could drop into immersive virtual worlds as we pleased. But, in reality, the early experiences were awkward at best, often dull and occasionally quite nauseating,” Murphy wrote.
Nevertheless, the IDC expects retail to grow to 119.3% over the course of the forecast period.
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