Western European revenues for AR/VR market expected to reach $2.5 billion in 2017

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Revenues for the augmented reality and virtual reality (AR/VR) markets in Western Europe will reach $2.5 billion in 2017, according to a new study from IDC.

The report, IDC’s latest worldwide semi-annual augmented and virtual reality spending guide, shows a 131% increase over the $1.1 billion spent in 2016. According to the report, AR/VR spending will further accelerate in the coming years, achieving a CAGR of 210% and totalling $25.7 billion in 2020.

In the coming years, the consumer market will be the largest AR/VR segment and will account for more than 50% of spending in Western Europe until 2018, IDC says. The AR scenario is totally different when it comes to industry distribution, with consumer share remaining below 20%.

AR spending in Western Europe will be driven by manufacturing and retail in terms of both, market share and growth. This will lead manufacturing and retail, together with utilities, to be the three fastest growing industries considering the full AR/VR picture, with all these sectors expected to have a 2015–2020 CAGR of around 220%. At present, hardware (including both viewers and commercial hosts) represent more than 80% of the AR/VR spending in Europe, software and services spending will increase, hitting more than 50% of overall AR/VR revenues in 2020.

Andrea Siviero, IDC research manager, European customer insights and analysis, said: “The industrial application of AR is evolving and its adoption is expected to rapidly ramp up in particular in those fieldworker-based sectors, such as manufacturing, transportation, and utilities. Meanwhile, VR is still strongly limited to the gaming/amusement consumer sector and providers need to make an effort to further prove business cases and expand industrial coverage and usage.

“AR/VR does not represent an opportunity for just hardware providers; services and software players could certainly ride the wave and they will have a key role in bringing use cases to life, while fully integrating them with existing company infrastructure and assets,” Siviero added.

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