Virtual Reality Devices Forecast To Leap To 337 Million; 65% Smartphone-Based

Virtual reality and augmented reality are projected to grow globally over the next four years. VR and AR revenues will increase by more than 30 times by 2020, according to a new study.

Revenue will grow from $5 billion this year to more than $162 billion by 2020, according to IDC’s worldwide, semi-annual virtual reality and augmented reality spending guide.

Half of that revenue will come from AR/VR hardware alone.

The majority (75%) of global AR/VR revenue will come from Asia/Pacific (excluding Japan), the U.S. and Western Europe this year, but the U.S. will lead by 2020. However, the two different segments will trade off in terms of growth and revenue throughout the next four years.

Over the next year, VR will drive more revenue than AR, most of which will be caused by consumer adoption of VR games and content, according to IDC.

"The rise of new, less expensive hardware will put virtual and augmented reality technology within the grasp of a growing number of companies and individuals," said Tom Mainelli, VP of devices and AR/VR at IDC.

"In the coming years, we expect developers to create a wide range of new experiences for these devices that will fundamentally change the way many of us do work."

Another recent study by Ovum projects that 68 million VR units will have been sold by the end of this year and that number will grow to almost 140 million in the next five years.

Most VR units sold over the next year will be promotional viewers, like Google Cardboard, but due to growing consumer adoption, mid-level mobile VR units, such as Samsung’s Gear VR, will account for most (65%) of units sold in 2020, according to Ovum.

Non-mobile VR systems like the Oculus Rift and HTC Vive will account for almost a quarter (21%) of market share by 2020.

The base of VR devices in use will grow from 71 million this year to 337 million in 2020 and more than a quarter (27%) of the market will shift to China.

After next year, revenues from AR will surpass VR with the mass adoption from the healthcare and industrial sectors, according to the IDC research.

"Now with powerful smartphones powering inexpensive VR headsets, the consumer market is primed for new paid and user generated content-driven experiences,” said Chris Chute, VP of customer insights and analysis at IDC.

“Recent developments in healthcare demonstrated the powerful impact augmented reality headsets can have at the industry level, and over the next five years we expect to see that promise become realized in other fields like education, logistics, and manufacturing.”

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