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Virtual and augmented reality spending to reach $13.9 billion in 2017: IDC

The research firm put out a study today that says AR and VR spending will increase 130.5-percent over last year.
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Written by Natalie Gagliordi, Senior Writer on
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Virtual reality (VR) and augmented reality (AR) are still finding a place in the mainstream technology market, but a new spending analysis from IDC suggests the segment is growing much faster than what was previously thought.

The research firm put out a study today that says the AR and VR market will reach $13.9 billion in 2017, an increase of 130.5 percent over the $6.1 billion spent in 2016. What's more, AR and VR spending is expected to accelerate to a compound annual growth rate (CAGR) of 198.0 percent over the 2015 to 2020 forecast period, reaching $143.3 billion in 2020.

Most of the spending will come from the consumer market, with early adopters expected to contribute $6.2 billion on hardware, software and services sales in 2017.

On the business side, discrete manufacturing and retail are expected to be biggest spenders, and the only two industries that will invest more than $1 billion on AR and VR technologies this year. IDC expects retail to move ahead of discrete manufacturing to become the top industry for AR/VR spending in 2020. Transportation and healthcare will also experience growth rates above 200 percent over the forecast period.

When pitted against each other, IDC expects that VR spending will top AR due to consumer uptake of games and paid content. But within two years, AR could surge ahead after hitting stride in healthcare delivery, product design, and management-related use cases.

"We expect initial AR spending to lean on mobile workforce-based use cases, where AR headsets are a natural enhancement to existing mobility investments," said IDC analyst Marcus Torchia. "And we will see education, research and design applications form a foundation of adoption in professional environments."

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