Augmented Reality Will Outgrow VR

By Tom Allen
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Nintendo’s proposed ‘Pokémon Go’ game is a perfect example of mobile AR.

ABI Research has forecast that augmented reality will prove to be a larger market than virtual reality in time. The firm projects that the AR market will be worth $100 billion by 2020.

A new report (http://tinyurl.com/pb64h6k) predicts that 21 million smart glass units will be shipped in 2020, showing a CAGR of 78% from 2015. Total AR market revenues – including dedicated and mobile hardware sales, content and software revenue – will show a CAGR of 73% over the same period. Revenue will be split between the major verticals: education, gaming, healthcare, industrial and retail, among others. The VR market will see similar, but smaller, growth.

Approximately 54% of the AR market will belong to the healthcare and industrial verticals, said research analyst Eric Abbruzzese. However, mobile devices used for AR will have a larger user base than dedicated AR devices, across all verticals. This will be especially true in consumer-focused verticals like gaming and media & entertainment – at least until more dedicated devices support unique gaming content, such as Microsoft’s Hololens being used for Minecraft.

The majority of content and software revenues will come from mobile devices. Verticals like healthcare, however, require high-end hardware and so will generate the majority of hardware revenues.