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Augmented Reality (AR) – Thematic Research

The AR market was worth $7 billion in 2020 and is forecast to record growth of more than 35% during the forecast period. The number of emerging use cases reflects AR’s growing maturity and, as such, AR smart glasses could potentially replace smartphones in the long run. AR will also play an essential role in the metaverse – an emerging mega-theme in which Big Tech is increasingly investing.

COVID-19 has fueled enterprise adoption of AR across sectors such as healthcare, law enforcement, and manufacturing, mainly for remote collaboration. Businesses will continue to adopt AR in the coming years, but the high cost of headsets and smart glasses will be a barrier to widespread adoption in the short term. However, by 2030, enterprises will account for the largest share of the AR market by revenue.

Overview of the augmented reality (AR) market

Overview of the augmented reality (AR) market

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AR is a technology that allows the user to see the real world overlaid with digital data. AR is evolving into a utility in specific consumer and enterprise applications. On the consumer front, AR is primarily used in social media, gaming, and e-commerce. While Pokémon Go and Snapchat Lenses have helped popularize AR as a tool for entertainment, ecommerce is using it as a utility. In addition, upcoming metaverse platforms will integrate AR-related technologies, helping to bring AR to the fore.

The businesses will continue to adopt AR in the coming years, but the high cost of headsets and smart glasses will be a barrier to widespread adoption in the short term.

What are the main trends shaping the AR theme over the next 12 to 24 months?

Technology trends

The metaverse is a virtual world where users share experiences and interact in real-time within simulated scenarios. Metaverse developers will increasingly focus on AR, thanks to AR’s ability to allow the user to see the real world overlaid with a layer of digital content. AR-related technologies such as SLAM, facial recognition, and motion tracking will be vital for developing metaverse-based use cases.

Mobile AR refers to AR functionalities accessible via apps on mobile devices, particularly smartphones. The existing smartphone ecosystem, consumer comfort with smartphones, and the improving computing capabilities of these devices are major drivers of mobile AR. The lack of self-contained, affordable, and compelling AR-specific hardware also benefits mobile AR. According to ARtillery Intelligence, much of the AR compatibility in the smartphone landscape happens outside of the traditional iOS and Android ecosystems, thanks to social media platforms that support AR.

Macroeconomic trends

The COVID-19 pandemic has fueled the adoption of AR amongst enterprises and consumers. For example, doctors are using Vuzix’s M400 smart glasses for training and conducting patient rounds remotely, while AR-based virtual try-on is emerging as a common use case in retail. Several major cosmetics and apparel brands allowed consumers unable to visit stores due to lockdowns to try out products at home. AR is also being used for remote collaboration (e.g., Zoom) and edtech (Mondly). Post pandemic, the adoption of AR will grow further as the technology matures and new use cases emerge for consumers and enterprises. The dearth of AR content is one of the biggest obstacles to the mass adoption of AR platforms.

Regulatory trends

Growing awareness of the need to protect user data has led to the introduction of data privacy regulations such as the EU’s General Data Protection Regulation (GDPR), Japan’s Act on the Protection of Personal Information (APPI), and the California Consumer Privacy Act (CCPA). Data privacy regulators in the EU, Japan, and India have adopted an extraterritorial approach, forcing companies to process user data locally, regardless of where the companies themselves are headquartered. The regulations also mandate companies to have transparent privacy policies that stipulate the purpose and use of user-generated data. In addition, companies must equip users with features to request, access, correct, and suspend their data from privacy centers. We expect the policies to be further refined based on applications, and companies will have to adhere to new mandates.

Media trends

Most major social media services allow users to add AR features to their content. Facebook has made AR features available on Instagram and Messenger. In June 2021, it announced plans to roll out Instagram’s AR-based shops feature to WhatsApp and Facebook Marketplace, offering users the ability to virtually try on products before making a purchase. In July 2021, Snap partnered with Rakuten to incorporate AR lenses in the Viber social messaging app. Tencent has also integrated AR in WeChat’s mini-programs, enabling AR-based gaming, shopping, virtual try-ons, and real estate inquiries.

What are the platform classifications in the AR market?

AR software

AR software accounted for the largest share of the total global AR market in 2020, with the remaining coming from the sale of hardware such as smart glasses and headsets. AR software will continue to dominate the market as novel, immersive content and use cases are developed for smartphones, AR smart glasses, and AR headsets. Steady investments by enterprises into task-specific solutions (e.g., remote collaboration, training, maintenance, and customer support) will drive the growth of the enterprise AR software market. The benefits, including increased employee productivity and reduction in service resolution time, will boost the adoption of AR software. 

AR hardware

The launch of new AR smart glasses and headsets during the forecast period will increase AR hardware’s revenue share. This is attributable to the high price of AR headsets, especially those targeted at enterprises, compared to AR smart glasses. AR is a key technology in the future of work and, as such, will be a focus area for enterprises in the coming years, which will drive demand for AR hardware. The consumer AR hardware market is likely to gain pace following the expected launch of Apple and Facebook’s AR smart glasses in either 2022 or 2023.

AR market, by platform

AR market, by platform

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Who are the leading players in the AR market?

Technology companies of all sizes are battling for a share of the AR market. Tech giants are focusing on the development of AR smart glasses and AR headsets, which could potentially replace smartphones to become the next major computing device. Google and Microsoft are dominant in AR smart glasses and AR headsets, respectively. Other leading players include are Seiko Epson, Rokid, ThirdEye, Vuzix, RealWear, Varjo, Lenovo, and Magic Leap.

Market report scope

Market size (Year – 2020)

$7 billion
Growth rate >35%
Base year for estimation 2020
Key Platforms AR software and AR hardware
Key Players Google, Microsoft, Seiko Epson, Rokid, ThirdEye, Vuzix, RealWear, Varjo, Lenovo and Magic Leap

Scope

  • This report provides an overview of the augmented reality theme.
  • It identifies the key trends impacting the growth of the theme over the next 12 to 24 months, split into four categories: technology trends, macroeconomic trends, regulatory trends, and media trends.
  • It includes comprehensive industry analysis, including forecasts for augmented reality revenues to 2030. These forecasts are split by end-user (consumer and enterprise) and platform (hardware and software). There is also market share information for the AR smart glasses and AR headsets markets.
  • It contains details of M&A deals driven by the augmented reality theme, and a timeline highlighting milestones in the development of augmented reality.
  • The detailed value chain shows comprise five segments: semiconductors, components, devices, platforms, and applications and content. Leading and challenging vendors are identified across all five segments.

Reasons to Buy

  • AR is still developing as a technology but is beginning to move into the mainstream.
  • Leading tech companies are scrambling to build sustainable AR ecosystems and gain a foothold in this potentially lucrative market, while specialist firms focus on areas like content development.
  • This report tells you the need to know about AR, including market forecasts to 2030 and profiles of the leading companies.

Key Players

Qualcomm

Nvidia

Intel

Ambarella

Softbank (Arm)

Qorvo

Samsung Electronics

TDK (InvenSense)

STMicroelectronics

NXP Semiconductors

Micron

SK Hynix

Apple

AMD

Sony

Skyworks

Broadcom

Bosch

Infineon

Analog Devices

Western Digital

Yangtze Memory

Texas Instruments

MediaTek

Cirrus Logic

Unisoc Technologies

Goertek

Kioxia

Huawei

Cadence

Renesas

Synopsys

OnSemi

Toshiba

OmniVision

Murata

Blu Wireless

TSMC

Sensata

Nanya Tech

Microsoft

UltraLeap

Alphabet (Google)

Panasonic

Samsung SDI

DigiLens

Lumus

PMD

Sennheiser

Dolby Labs

AAC Technologies

Cognex

Magic Leap

BYD

LG Chem

Himax

Microvision

Leica

Occipital

Sixense

ViewAR

TDK (ATL)

CBAK Energy Technology

LG Display

Mojo Vision

Universal Display

Applied Materials

Adlens

Carl Zeiss

Mimi (3D Sound Labs)

Occipital

Sighthound

Augment

Wikitude

Visometry

Dynapack

LetinAR

Dispelix

Avegant

WayRay

VividQ

Olympus

LG Innotek

Kinicho

USound

Seiko Epson

Mantis Vision

Unity

Facebook

Autodesk

TeamViewer

Dassault Systèmes

PTC

ARToolkit

Snap

Epic Games

Xzimg

Amazon

DeepAR

Visionstar (EasyAR)

INDE

AR.js

Chukong Technologies

Siemens

ScopeAR

3D Systems

Maxst

Zapworks

ARGear

8th Wall

PlayCanvas

Cisco

ARreverie

Akamai

Tencent

Alibaba

F5 Networks

Fastly

jsDelivr

Verizon

BBK Electronics

Xiaomi

StackPath

Cloudflare

IBM

Baidu

iRobot

Teradyne

SAS

ABB

Festo

Robotiq

H2O.ai

AI.Reverie

PerceptiLabs

SparkCognition

Alteryx

Wolfram

Data Robot

RapidMiner

iFlytek

Mobvoi

LivePerson

SoundHound

Megvii

Clarifai

Affectiva

SenseTime

Cambricon

Horizon Robotics

Wave Computing

Neato Robotics

Diligent Robotics

Boston Dynamics

Blue Frog Robotics

Flybits

Semusi

Caspar.ai

Cobalt Robotics

BigML

dotData

Algorithmia

CognitiveScale

Oracle

KNIME

Ayasadi

MathWorks

Kasisto

Sherpa.ai

Hugging Face

Neurala

Catchoom

Cloudwalk

Facewatch

Groq

Syntiant

KnuEdge

Graphcore

ElliQ

Ecovacs

Miso Robotics

Grokr

Adobe

Atheer

Proximie

Augmedix

Sephora

Lockheed Martin

Northrop Grumman

Niantic

NetEase

Square Enix

Walt Disney

Comcast

AT&T (WarnerMedia)

Vipaar

SentiAR

Orca Health

Ikea

Shopify

Walmart

Zoom

Boeing

Nexon

Netflix

ViacomCBS

EON Reality

JBKnowledge

Accuvein

XRhealth

Touch Surgery

eBay

JD.com

Converse

John Lewis

The Home Depot

Pinterest

ByteDance

BAE Systems

Elbit Systems

Bandai Namco

Nintendo

Resolution Games

Gravity Jack

Groove Jones

AVEVA

RE’FLEKT

Intellectsoft

Kapanu

Saagara

Target

L’Oréal

De Beers

Brain Power

Inditex (Zara)

ARShow

Snaappy

Vuzix

ThirdEye

Next Games

Jam City (Ludia)

OliveX (Six to Start)

Amazon (MGM)

Rokid

Lenovo

nReal

Jorjin

Xloong

Realmax

Everysight

EssilorLuxottica (Oakley)

Varjo

RealWear

Asus

Iristick

LLVision

NuEyes

MAD Gaze

Aryzon

Jarvish

EyeLights

IC Helmets

Table of Contents

Executive summary

Players

Technology briefing

Trends

Industry analysis

Value chain

Companies

Sector scorecards

Glossary

Further reading

Thematic methodology

Frequently Asked Questions

The AR market was found to be worth $7 billion in the year 2020.

The AR market is forecast to record growth of more than 35% during the forecast period (2021-2030).

Key sectors in the AR market include AR software and AR hardware.

Consumer and enterprise are the key end-users in the AR market.

Google and Microsoft are dominant in AR smart glasses and AR headsets, respectively. Other leading players include Seiko Epson, Rokid, ThirdEye, Vuzix, RealWear, Varjo, Lenovo, and Magic Leap.

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