Page 6 - AeM_January_2020

RESEARCH
ANALYSIS
The latest update to IDC's Worldwide Augmented and Hardware will account for nearly two thirds of all AR/
TRENDS
Virtual Reality Spending Guide also shows that VR spending throughout the forecast, followed by
worldwide spending on AR/VR products and services software and services. Services spending will see
will continue this strong growth throughout the 2019- strong CAGRs for systems integration (113.4%),
2023 forecast period, achieving a five-year compound consulting services (99.9%), and custom application
annual growth rate (CAGR) of 77.0%. development (96.1%) while software spending will have
a 78.2% CAGR.
Worldwide spending on AR/VR solutions will be led by
the commercial sectors, which will see its combined "Across enterprise industries, we are seeing a strong
share of overall spending grow from less than 50% in outlook for standalone viewers play out in use case
2020 to 68.8% in 2023. The commercial industries that adoption. Enterprises will drive much of these high-end
are expected to spend the most on AR/VR in 2020 are headset adoption trends. In the consumer segment,
retail ($1.5 billion) and discrete manufacturing ($1.4 more affordable viewer models for gaming and
billion). Fifteen industries are forecast to deliver CAGRs entertainment purposes will see the broadest industry
of more than 100% over the five-year forecast period, adoption," said Marcus Torchia, research director,
led by securities and investment services (181.4% Customer Insights & Analysis.
CAGR) and banking (151.9% CAGR).
Of the two reality types, spending in VR solutions will
Consumer spending on AR/VR will be greater than any be greater than that for AR solutions initially. However,
single enterprise industry ($7.0 billion in 2020) but will strong growth in AR hardware, software, and services
grow at a much slower pace (39.5% CAGR). Public spending (164.9% CAGR) will push overall AR
sector spending will maintain a fairly steady share of spending well ahead of VR spending by the end of the
overall spending throughout the forecast. forecast.

"AR/VR commercial uptake will continue to expand as On a geographic basis, China will deliver the largest
cost of entry declines and benefits from full deployment AR/VR spending total in 2020 ($5.8 billion), followed by
become more tangible. Focus is shifting from talking the United States ($5.1 billion). Western Europe ($3.3
about technology benefits to showing real and billion) and Japan ($1.8 billion) and will be the next two
measurable business outcomes, including productivity largest regions in 2020, but Western Europe will move
and efficiency gains, knowledge transfer, employee's ahead of China into the second position by 2023. The
safety, and more engaging customer experiences," said regions that will see the fastest growth in AR/VR
Giulia Carosella, research analyst, European Industry spending over the forecast period are Western Europe
Solutions, Customer Insights & Analysis. (104.2% CAGR) and the United States (96.1% CAGR).

Commercial use cases will account for nearly half of all The Worldwide Augmented and Virtual Reality
AR/VR spending in 2020, led by training ($2.6 billion) Spending Guide examines the augmented reality and
and industrial maintenance ($914 million) use cases. virtual reality (AR/VR) opportunity and provides insights
into this rapidly growing market and how it will develop
Consumer spending will be led by two large use cases: over the next five years. Revenue data is available for
VR games ($3.3 billion) and VR feature viewing ($1.4 nine regions, 20 industries, 47 use cases, and 6
billion). However, consumer spending will only account technology categories and two reality types. Unlike any
for a little over one third of all AR/VR spending in 2020 other research in the industry, the comprehensive
with public sector use cases making up the balance. spending guide was created to help IT decision makers
to clearly understand the industry-specific scope and
The AR/VR use cases that are forecast to see the direction of AR/VR expenditures. ◊
fastest growth in spending over the 2019-2023 forecast
period are lab and field (post secondary) (190.1%
CAGR), lab and field (K-12) (168.7% CAGR), and By IDC
onsite assembly and safety (129.5% CAGR). Seven
other use cases will also have five-year CAGRs greater
the 100%. Training, with a 61.8% CAGR, is forecast to
become the largest use case in terms of spending in
2023.

January 2020: Digital Marketing Trends & Predictions 6