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AR/VR spending “to reach $18.8 billion in 2020”

IDC expects commercial sectors to lead the charge

Worldwide spending on augmented reality (AR) and virtual reality (VR) is forecast to reach $18.8 billion in 2020, a 78.5 per cent increase from 2019, according to the International Data Corporation (IDC).

The surge will be led by the commercial sectors, the IDC said, particularly retail ($1.5 billion) and discrete manufacturing ($1.4 billion).

While VR games are expected to account for $3.3 billion of AR/VR spend, consumer spending is projected to only make up one third of all AR/VR spending in 2020, with public sector use cases making up the balance.

The IDC suggested hardware will account for nearly two thirds of all AR/VR spending throughout the forecast, followed by software and services, with strong CAGRs for systems integration (113.4 per cent), consulting services (99.9 per cent) and custom application development (96.1 per cent).

China is projected to deliver the largest AR/VR spending total in 2020 ($5.8 billion), followed by the US ($5.1 billion), Western Europe ($3.3 billion) and Japan ($1.8 billion).

“AR/VR commercial uptake will continue to expand as cost of entry declines and benefits from full deployment become more tangible,” said IDC research analyst Giulia Carosella. “Focus is shifting from talking about technology benefits to showing real and measurable business outcomes, including productivity and efficiency gains, knowledge transfer, employee’s safety and more engaging customer experiences.”

“Across enterprise industries, we are seeing a strong outlook for standalone viewers play out in use case adoption,” added IDC research director Marcus Torchia. “Enterprises will drive much of these high-end headset adoption trends. In the consumer segment, more affordable viewer models for gaming and entertainment purposes will see the broadest industry adoption.”