The augmented reality and virtual reality market is expected to grow from US$ 27.96 billion in 2021 to US$ 252.16 billion by 2028; it is estimated to grow at a CAGR of 36.9% during 2021-2028.
Customer support departments of various enterprises have improved considerably due to advancements in AI-powered chatbots and virtual assistants. However, chatbots struggle with remote troubleshooting, which is a major challenge faced by customer care teams. The incorporation of virtual reality in customer service has been a game-changer for retailers, enhancing consumer engagements and satisfaction. Moreover, after the end of communication between customers and the customer care departments, this technology can resolve fundamental and challenging issues in less time. For businesses, implementing excellent customer service initiatives is better than any other way to demonstrate how much they respect their customers. Virtual reality is the most advanced technology assisting the retail sector. It creates an immersive experience with a powerful sensory effect and a solid emotional connection. Businesses use this connection to engage with customers in new and relevant ways. When emotionally connected with a brand, customers are likely to repeat purchases and become brand loyalists. Furthermore, virtual reality provides consumers with a highly realistic experience. Marketers can create exciting, exhilarating, scary, and even emotional VR ads to display products in new ways. For example, The North Face, an outdoor recreation products company, created an immersive virtual reality experience using the landscape from Nepal to help customers connect with the brand’s identity. Thus, the growing use of virtual reality solutions across retail stores is propelling the augmented reality and virtual reality market growth.
The adoption of AR is increasing across the world due to rising investments in the AR business, growing demand for AR devices and solutions in the healthcare industry, and surging demand for AR in the e-commerce and retail industries. In the healthcare sector, AR can offer a surgeon a virtual view of a patient’s body parts, allowing them to assess their condition, which helps surgeons perform invasive procedures accurately. The AR is also being used for teaching medical students, educating doctors, improving physical fitness, and managing pharmacies; the AR-enabled solutions also help hospitals in providing patient care and support after they leave the hospital. The availability of affordable VR devices, increasing adoption of HMDs in various industries, technological advancements and growing digitization, penetration of HMDs in gaming and entertainment sectors following the COVID-19 pandemic, and high investments in the VR industry are the primary factors driving the growth of the market for VR. However, the augmented reality and virtual reality market growth is hindered by the lack of user interface, processing power, and AR device storage.
Impact of COVID-19 Pandemic on Augmented Reality and Virtual Reality Market
As augmented reality (AR) and virtual reality (VR) technologies are used in head-mounted displays (HMDs), they are expected to be majorly adopted by medical professionals as protective gear in the coming years. Despite the negative impact of the COVID-19 pandemic-associated lockdowns and low cross-border trade, the augmented reality and virtual reality market has continued to grow with the increasing shift toward adopting AR and VR technologies, and businesses switching to remote working or hybrid working. According to an article published by the INEWS, in 2020, the China Spring Cloud Auto Show was organized by combining AR technology, big data, Web 3D, panoramic content, and other technologies to present cutting-edge technologies and products from multiple perspectives. Therefore, the overall impact of the COVID-19 pandemic on the global augmented reality and virtual reality market in 2020 was positive. In 2021, HTC Corporation conducted an online conference for developers using VR technology. Also, the digital transformation of several businesses in sectors such as retail (e-commerce), education (e-learning), and healthcare (advanced equipment) would support the growth of the augmented reality and virtual reality market in the coming years.
Based on technology, the augmented reality and virtual reality market is bifurcated into augmented reality and virtual reality. In 2021, the augmented reality segment led the augmented reality and virtual reality market. Based on component, the augmented reality and virtual reality market is segmented into semiconductor components, sensors, and others. In 2021, the semiconductor components segment accounted for the largest market share. Based on the end-user industry, the augmented reality and virtual reality market is segmented into entertainment, educational, industrial, medical, real estate & architecture, retail, aerospace & defense, and others. In 2021, the entertainment segment accounted for the largest market share. By geography, the augmented reality and virtual reality market is segmented into North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America (SAM). In 2021, North America accounted for the largest share in the augmented reality and virtual reality market.
The size of the augmented reality and virtual reality market has been derived using both primary and secondary sources. To begin the research process, exhaustive secondary research has been conducted using internal and external sources to obtain qualitative and quantitative information related to the market. The process also serves the purpose of obtaining an overview and forecast for the augmented reality and virtual reality market with respect to all the segments. It also provides the overview and forecast for the market based on all the segmentation provided with respect to five major regions?North America, Europe, Asia Pacific, Middle East & Africa, and South America. Also, primary interviews were conducted with industry participants to validate data and gain more analytical insights. The participants of this process include industry experts such as VPs, business development managers, market intelligence managers, national sales managers, and external consultants?including valuation experts, research analysts, and key opinion leaders?specializing in the augmented reality and virtual reality market.
The key companies operating in the augmented reality and virtual reality market include Immersive Gaze; Google LLC; EON Reality; Vuzix Corporation; Blippar Group Limited (Layar B V); Innovega Inc.; Simulanis Solutions Private Limited; Kanda ApS; YeppAR; and Zugara, Inc.