Augmented & Virtual Reality Market to Grow by USD 442.99 Billion (2024-2028), Boosted by AR and VR Demand – Market Evolution Powered by AI – Technavio

NEW YORK, Feb. 11, 2025 /PRNewswire/ — Report on how AI is driving market transformation – The global augmented reality and virtual reality market size is estimated to grow by USD 442.99 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 50.22% during the forecast period. Growing demand for AR and VR technology is driving market growth, with a trend towards growing funding in startup ar and vr companies from investors. However, high development costs associated with AR and VR apps poses a challenge. Key market players include Alphabet Inc., Apple Inc., Augmented Pixels Inc., Blippar Ltd., CyberGlove Systems Inc., Eon Reality Inc., HP Inc., HTC Corp., Innovega Inc., Lenovo Group Ltd., Magic Leap Inc., Maxst Co. Ltd., Microsoft Corp., PTC Inc., Samsung Electronics Co. Ltd., Seiko Epson Corp., Toshiba Corp., Vuzix Corp., Wikitude GmbH, and Zugara Inc..

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Market Driver

Augmented Reality (AR) and Virtual Reality (VR) markets are experiencing significant growth due to the integration of 3D models in 3D environments. With the rollout of 5G networks, the speed and responsiveness of AR and VR technologies will increase, benefiting commercial industries such as aerospace & defense, architecture, and manufacturing. AR applications using cameras and gesture-tracking devices are revolutionizing consumer engagement in sectors like e-commerce, entertainment, and gaming. HMDs (Head-mounted displays) and heads-up displays are transforming industries like healthcare, industrial automation, and transportation. AR and VR technologies are also being used in IT & telecommunication, media & entertainment, and tourism businesses for innovative solutions. The investment activity in AR and VR is on the rise, driven by the integration of AI, semiconductor components, and SoC (System on Chip) technology. The future of AR and VR holds endless possibilities, from mental illness treatments to simulations and self-monitoring devices. 

The global Augmented Reality (AR) and Virtual Reality (VR) market is experiencing significant growth due to increasing collaborations and partnerships among vendors. These strategic alliances enable companies to enhance their product offerings and explore new application areas for AR and VR software platforms. For instance, in March 2020, Valve, Microsoft Corp., and HP Inc. Announced a collaboration to develop a next-generation SteamVR headset, called HP Reverb G2. Such collaborative efforts are expected to fuel the growth of the AR and VR market during the forecast period. Vendors are leveraging these partnerships to expand their reach, improve product quality, and cater to the evolving needs of end-users. 

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Market Challenges

• Augmented Reality (AR) and Virtual Reality (VR) markets are experiencing significant growth due to increasing demand from commercial industries. AR technology overlays digital 3D models onto real-world environments, enhancing consumer engagement in sectors like retail, architecture, and manufacturing. Challenges include developing 3D environments for AR applications, integrating AR technology with 5G networks, and creating technical expertise for hardware like HMDs (Head-mounted displays) and gesture-tracking devices. VR technology immerses users in entirely digital 3D environments, revolutionizing industries such as aerospace & defense, healthcare, and entertainment. Challenges include investing in network infrastructure for cloud-based VR applications, creating VR content for gaming and simulations, and ensuring security compliance. Consumer electronics, including smartphones and smart glasses, are driving mass adoption of AR and VR. Industries like e-commerce, real-estate, and tourism businesses are exploring AR applications for product visualization and customer engagement. Meanwhile, AR and VR are transforming industrial automation, IT & telecommunication, and the infotainment industry, improving efficiency and productivity. Semiconductor components and SoC integration are crucial for developing AR and VR hardware. AI and position trackers are essential for enhancing user experience and creating realistic simulations. VR exposure therapy is a promising application for mental illnesses, while VR technology is revolutionizing industrial tools and training. In conclusion, the AR and VR market presents numerous opportunities for innovation and growth, with challenges that require investment in hardware, software, and technical expertise. Industries from consumer electronics to aerospace & defense are embracing these technologies to enhance user experience, improve efficiency, and drive productivity.
• In the realm of Augmented Reality (AR) and Virtual Reality (VR) market, creating engaging projects involves various intricate components. Cost considerations are crucial, encompassing expenses for VR content creation and distribution, as well as hardware and software costs. For instance, 360-degree cameras are utilized to generate panoramic content at a relatively lower cost compared to computer-generated graphics. However, the real value of VR games lies in their interactive content. To create lifelike VR content, a combination of 360-degree cameras, computer graphics, and high-end photorealistic cameras is necessary. The approximate cost for developing only the VR content for an app falls between USD50,000 and USD100,000.

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Segment Overview

This augmented reality and virtual reality market report extensively covers market segmentation by

• Technology
  • AR
  • VR
• Application
  • Consumer
  • Enterprise
• Geography
  • North America
  • APAC
  • Europe
  • Middle East And Africa
  • South America

1.1 AR- The Augmented Reality (AR) segment is experiencing significant growth due to increasing new product launches, expanding application areas, and rising investments in AR technology. AR is an innovative technology that overlays digital information onto the real world, offering an enhanced user experience. This technology can be accessed through apps or web platforms. AR’s versatile applications in various industries, including enterprise, retail, healthcare, media and entertainment, and education, are driving its demand. Key players, such as Alphabet and Microsoft, are investing in AR software development kits to create AR platforms. For instance, Microsoft’s Mesh service enables people to collaborate in AR environments. Technological advancements in AR hardware and software, including smartphones and AR development platforms, are making AR more accessible and user-friendly. The growing need for remote collaboration and training solutions, especially during the COVID-19 pandemic, is also accelerating AR adoption. Major vendors, including Microsoft, Google, and Apple, are providing AR technology for enterprise applications, such as remote assistance, training, and product visualization. The increasing adoption of AR across industries for remote collaboration, training, and customer engagement, technological advancements, and continued innovation in AR applications will fuel the growth of the AR segment in the Augmented Reality and Virtual Reality market.

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Research Analysis

Augmented Reality (AR) and Virtual Reality (VR) are revolutionary technologies that have been gaining significant traction in various industries. AR superimposes digital 3D models onto the real world, enhancing user experience in areas like gaming, simulations, and infotainment. Smartphones and smart glasses serve as popular devices for AR, while heads-up displays are used in vehicles. VR, on the other hand, immerses users in a completely virtual 3D environment. VR technology finds applications in gaming, simulations, and exposure therapy, among others. Investment activity in AR and VR is on the rise, driven by the potential of these technologies in sectors like manufacturing industries, industrial automation, and self-monitoring devices. Engineers and designers use AR and VR for creating and testing complex designs, while the infotainment industry leverages these technologies for providing experiences. VR technology is also transforming shopping, allowing customers to virtually try on clothes or explore homes before purchasing. SoC integration is making VR and AR more accessible and affordable for the masses.

Market Research Overview

Augmented Reality (AR) and Virtual Reality (VR) are revolutionary technologies that transform the way we interact with our surroundings and digital content. AR overlays 3D models and information onto real-world environments in real-time using cameras and AR technology. VR creates 3D environments, transporting users to new worlds. Both technologies are gaining traction in various industries, including aerospace & defense, architecture, engineering, and manufacturing industries, for design and simulation. 5G networks enable seamless AR and VR experiences. AR applications are being used in commercial industries, consumer electronics, e-commerce, and tourism businesses for consumer engagement, product visualization, and information search. VR is popular in gaming, entertainment, healthcare, and education for training, therapy, and experiences. HMDs (Head-mounted displays), gesture-tracking devices, and position trackers are essential hardware components. The IT & telecommunication industry is investing heavily in AR and VR technology, with semiconductor components playing a crucial role. Technical expertise is required for software development and integration with SoCs (Systems on Chips). AR and VR are also being used in industrial automation, security compliance, and mental illnesses treatment. The future of AR and VR is bright, with endless possibilities in entertainment, education, and everyday life.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Technology
  • AR
  • VR
• Application
  • Consumer
  • Enterprise
• Geography
  • North America
  • APAC
  • Europe
  • Middle East And Africa
  • South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio