AR hardware market is forecast to grow at over 90% CAGR from 2016 to 2024
Augmented reality brings a large number of technology solutions to many industries, such as medical, retail, automotive and e-commerce. Besides, number of mobile devices (tablets and smartphone) that are built in with AR functionalities are rising and becoming an important tool in the workplace to enhance smooth business workflows and operations further contributes to the growing industry size.
Augmented reality components
According to a report of Grand View Research
, augmented reality market size was over USD 640.2 million in 2015. Also from this report, the AR hardware market is expected to witness substantial growth at a nearly 90% CAGR from 2016 to 2024 due to the advances in displays, processors, and sensors. Innovations in hardware, such as the development of smart contact lens and advanced HMDs equipped with AR processors, are expected to induce substantial growth prospects for hardware equipment over the future. Moreover, increasing penetration of the technology across applications such as manufacturing and healthcare is expected to positively influence augmented reality
Meanwhile, the AR software segment dominated the market with a revenue share of over 95% in 2014, and it will also witness substantial growth in the future owing to the rising penetration of mobile devices such as smartphones
and tablets offering richer media and enhanced experience through mobile AR apps.
Augmented reality displays
The smart glass segment is expected to witness a significant growth on account of the increasing demand in the industrial and enterprise sectors. Advancements in smart glasses with more miniaturization, improved battery life, and better field of view may increase the segment demand.
Grand View Research expects that Head-mounted displays (HMDs) will dominate the market accounting for over 65% of the overall revenue by 2024. Another research company, Global Market Insight
, also projects that smart glass market size will observe significant growth at over 95% CAGR from 2016 to 2024.
Rising customer expectations have led organizations to bring digital world into person's perceived real world in an interactive way. Moreover, transforming workflow in industrial and enterprise sectors have led to rise in demand for advanced glasses to develop feature rich products. Such factors are projected to fuel the AR market over the future. Several companies in the industry are working on developing HMDs for AR with advanced features.
Augmented reality applications
Industrial applications accounted for over 25% augmented reality market share in 2015. Several industry players are developing AR for the industrial sector to leverage the full potential. Rising demand to handle complex machinery, assemble and maintenance will propel augmented reality industry growth.
According to the report of Grand View Research: “The automotive application segment is expected to grow at a CAGR of nearly 75% from 2016 to 2024, owing to the increasing adoption of AR across the automotive industry. Several automotive companies have started employing AR into their advertising campaigns.” Meanwhile, Global Market Insight expects this number will be 80%, also from 2016 to 2024.
AR also brings lots of solutions to the retail industry that can improve interaction between retailers and customers. Emerging trends such as pop-up stores in the retail segment are anticipated to fuel growth. Gesture-based technology is an important part of pop-up stores, along with a camera and iPad catalog, as they aim at encouraging customer participation. Furthermore, retailers willing to enter the online shopping industry find the lack of interaction with physical products as a barrier to making purchases. AR enables virtual trial rooms, which allow customers to try on products online.
Grand View Research believe that the Asia-Pacific augmented reality industry accounted for over 19% in 2015, growing at a CAGR of over 80% from 2016 to 2024, while Europe is estimated to grow at a CAGR of nearly 75% over the forecast period led by the increasing investments from countries such as Germany and the UK.
Both Global Market Insight and Grand View Research believe that China will be the key player in the Asia – Pacific region in augmented reality industry. According to Global Market Insight: China augmented reality market is predicted to witness significant growth and drive the Asia Pacific AR industry over the next few years. Increasing funding and investment in the technology is expected to augment the regional demand. Increasing penetration of smartphone & tablets and a huge number of manufacturers based in the countries including China, South Korea and Taiwan is anticipated to contribute towards the rising augmented reality market size.