Report: AR/VR Spending Will Double Through 2021

Ry Crist, CNET:

Worldwide spending on virtual and augmented reality is expected to double each year through 2021, say the analysts at IDC, a market research firm based in Framingham, Massachusetts. According to their math, total spending will increase from $11.4 billion in 2017 to $215 billion in 2021, with a compound annual growth rate of 113.2 percent.

This absolutely echoes what I’ve been hearing. Barring a significant economic event that curtails global spending (which, frankly, is quite possible), the money that’s already flowing into AR and VR will only flow more readily over the next three to five years.

Consumer sales for things like headsets and games are currently the top driver of overall spending, followed by sales in the manufacturing and retail sectors. In the US, some of those sectors could ultimately overtake consumer sales by 2021.

Consumer interest in, and spending on, VR will climb steadily, but I don’t think headsets will be the new smartphone anytime soon. That said, expect more “consumer sales drive AR/VR growth!” headlines over the next few years as sales of AR-ready iPhones inform analysts’ reports. I’d argue that these numbers will be somewhat artificially inflated, as the percentage of consumers who buy new iPhones specifically for Augmented Reality applications will be rather low.

“Other segments like government, transportation, and education will utilize the transformative capabilities of these technologies,” said Marcus Torchia, research director of IDC Customer Insights & Analysis.

This is where the big, dull action will be. Microsoft is already building a healthy Hololens business in the enterprise. Nobody outside the enterprise talks about it because enterprise tech is “dull” and consumer tech is “sexy.” But serious money is being invested in practical innovations built on AR and XR (mixed reality) technologies, and big corporations are betting on those innovations paying dividends in the form of more efficient training, logistics, and business processes.

AR will generate lots of buzz over the next 12 months thanks to iOS 11 and ARKit. What consumers do with it after that remains to be seen. But the money will continue to flow into AR and XR for the enterprise, at least for another three to five years.