Augmented Reality Market by Component (Hardware and Software), Device Type (Head Mounted Display, Handheld Devices, and Others), End Use (Media and Entertainment, Manufacturing and Construction, Healthcare, Education, Retail, Others), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2022–2031

Augmented Reality Market Analysis

The Global Augmented Reality Market Size was $24,169.3 million in 2021 and is projected to grow with a substantial CAGR of 33.2%, by generating revenue of $411,396.9 million by 2031.

Augmented Reality Market Synopsis

The massive growth of the augmented reality market is mainly attributed to its growing use in the healthcare industry. The AR technology is being increasingly adopted in surgeries as well as diagnostics. A surgeon can examine patient vitals during surgery without juggling multiple devices. Hence, data misinterpretation is avoided. AR technology is offering unlimited opportunities to healthcare professionals and providers, payers, medical devices, and other players in the healthcare ecosystem. In the retail sector as well, AR technology has numerous applications such as store mapping. With AR, on-screen directions can assist a user in navigating the store layout to find the item that they require. The user has to only hold their smartphone up and follow the AR directions through the aisles to their preferred destination: the item. AR technology also assists customers by offering a personalized online shopping experience. It can check which clothes look perfect on a customer, shows what sizes would fit them, and other features that would solve the problems of online shopping. All these factors are likely to propel augmented reality market share growth in predicted period.

The long-term mental health problems rising due to AR may hinder the augmented reality market growth during the forecast period. The users respond to the immersive environment in a similar way as the physical environment, which affects their behavior and psychology. Excessive use of AR technology can disturb the sensory system of users and lead to symptoms including sickness, dizziness, increased sweating, paleness, loss of balance, etc. In sensitive people, these symptoms may occur within the first few minutes of usage.

The growing use of AR technology in the gaming industry is expected to offer ample growth to augmented reality market players. Games are the most lucrative business for AR technology today and represent the highest market growth during the forecast period. Some of the very first mainstream instances of AR were delivered directly to the entertainment world such as in a game like Pokémon Go.

Augmented Reality Overview

Augmented reality is a live image of a physical real-world environment whose elements are combined with virtual computer-generated graphics. The use of information in the form of visuals, audio, text, and other virtual enhancements combined with real-world goods is known as AR. Unlike simulations, AR integrates and adds value to the user's interaction with the real world. The rising popularity of smart glasses, smartphones, and other handheld and wearable devices is driving the use of mobile AR technologies to create immersive experiences.

COVID-19 Impact on Global Augmented Reality Market

The COVID-19 pandemic has had a massive impact on the global corporate sector. Many countries have implemented strict lockdowns, severely restricting how corporations can conduct business and, in many cases, causing operations to cease. Covid-19 has had a positive impact on the augmented reality market share growth, as demand for the technology continues to rise across industries such as media and entertainment, education, healthcare, and retail. Moreover, the use of AR technology has been one of the major trends in the beauty and fashion sector. It helps brands in experiential marketing, creating immersive storytelling, etc. With most of the stores closed during the COVID-19-induced lockdowns, AR stepped in as a notable resource. For example, beauty retailers like Ulta and Sephora have to prohibit customers from physically testing their beauty products. Beauty retailers are instead turning to AR technology to help consumers digitally experiment products to aid in buying decisions.

Growing AR Technology Adoption in the Healthcare Sector is expected to drive the Market Growth

Augmented reality has a lot of potential in the field of medicine. The use of technology can make healthcare more affordable and available to millions of people. The technology has potential applications in health awareness, disease outbreak prevention, diagnosis, medical equipment maintenance and training, treatment and therapy planning, patient monitoring, and patient care. It can be used to provide a virtual image of a patient's body components to a surgeon, allowing them to assess their condition. This can help the surgeon perform less invasive procedures. Surgeons can see joints, muscles, and internal organs without dissecting the body using AR technology. Real-time data about a patient's health is a critical driver of AR adoption in the healthcare sector, with the potential to save many lives. Aside from virtualizing a patient's health, AR technology saves time during emergency surgeries, which is a significant advantage of its use in this industry and is expected to drive the augmented reality market opportunity growth.

Long Term Health problems associated with Excessive Usage of AR technology may restrain the Market Growth

AR technology is highly interactive and keeps the user engaged immensely for a longer time. Thus, leading to health issues such as eye strain, anxiety, obesity, and lack of concentration. Apart from these, continuous use of AR devices also results in exposure to high electromagnetic frequency radiation, which may cause illness to users. Therefore, the excessive use of XR headsets can induce health issues, hampering the growth of the XR headset market.   

Augmented Reality Application in Automotive Industry to Create Excellent Opportunities in the Market

AR technology has significantly impacted vehicle safety and usability. Tesla Motors has demonstrated the capabilities of augmented reality on the road. Drivers can see how the vehicle's advanced suite of cameras consistently analyses the world around them using object detection and scene analysis. The results of this powerful system can be seen on the vehicle's display, displaying the car's position in space relative to the numerous obstacles around it. Moreover, AR is an effective sales tool that can assist in the sale of cars even while the user is at home. It can also generate a 3D model of a car in one's driveway. The consumer can examine the vehicle's size and details, as well as watch it move around. Perhaps most notably, the user can change the color of the vehicle to see which color they prefer when purchasing the vehicle. Thus, these factors are expected to create high augmented reality market opportunity prospects in the automotive sector.

Global Augmented Reality Market, by Component

Based on component, the market is divided into Hardware and software. Hardware sub-segment accounted for the highest revenue share in 2021 and is predicted to show the fastest growth during the forecast period.

Global Augmented Reality Market Trends, by Component, 2021

Source: Research Dive Analysis

The Hardware sub-segment is projected hold major market share due to increasing application of augmented reality in the healthcare sector, media and entertainment sector, which requires special devices like smart glasses, head mounted, etc. to work. The Google is developing smartglasses, Magic Leap is developing AR headsets and smartphone companies like Apple, Samsung, etc. Head-mounted devices and smart glasses are widely used in training and simulation, surgeries, diagnostics, telemetering, and many applications.

Global Augmented Reality Market, by Device Type

Based on device type, segment is divided into head mounted display, Handheld Devices, and others. Out of these, Handheld Devices sub-segment is predicted to be the most dominant and head mounted display is anticipated to show the fastest growth during the forecast period.

Global Augmented Reality Market Forecast, by Device Type, 2021

Source: Research Dive Analysis

The handheld devices sub-segment is predicted to dominate the market share during the forecast period. One of the most rapidly growing areas of AR applications is handheld augmented reality. The rise in the demand for mobile AR in the retail sector to enhance customers shopping experience is considered as the factor of the growth. The increased adoption of AR in social media applications including Snapchat, Facebook, and Instagram will drive demand for more rich content in mobile AR for social media.

The head mounted display sub-segment is projected to show fastest growth during the forecast period. Head Mounted Device refers to electronic display devices that are worn over the head like a helmet. These devices feature small screens in front of the users' eyes and provide a highly enhanced cinematic experience. Increasing adoption of head-mounted displays across various industry verticals such as military and defense, healthcare, and others, is major factors driving the rapid augmented reality market growth over the forecast period

Global Augmented Reality Market, by End Use

Based on end use, the market is divided into Media and Entertainment, Manufacturing and Construction, Healthcare, Education, Retail, and others. Among these, Media and Entertainment sub-segment is predicted to be the most dominant sub-segment and healthcare sub-segment is anticipated to have the fastest growth during the forecast period.

Global Augmented Reality Market Share, by End Use, 2021

Source: Research Dive Analysis

The Media and Entertainment sub-segment is projected to dominate market share during the forecast period. AR technology is increasingly used in the media and entertainment sector. It offers a completely stimulating environment and graphics quality to users that look better than reality. AR headset is a revolutionary experience that takes the users entirely into the simulated digital experience. The entertainment seems realistic and enjoyable with the use of AR headsets. Moreover, AR adds a whole new dimension to the media and entertainment industry allowing users to become active participants in the shows such as concerts, exhibitions, etc rather than a passive one.

Global Augmented Reality Market, Regional Insights

The Augmented Reality market analysis was investigated across North America, Europe, Asia-Pacific, and LAMEA.

Global Augmented Reality Market Size & Forecast, by Region, 2021-2031 (USD Million)

Source: Research Dive Analysis

The Market for Augmented Reality in Asia-Pacific Region to be the Most Dominant

Asia-Pacific is predicted to contribute the greatest market share in terms of revenues throughout the projection period. With the increasing adoption of advanced technologies and the use of various augmented reality applications such as Snapchat, Facebook, Instagram, and Tik Tok among the people, the demand for the augmented reality market has increased significantly. In this region, China is expected to hold a substantial market share due to developments in the 5G network and infrastructure. Also, India is expected to witness substantial growth on account of government initiatives and funding to develop 5G infrastructure. Moreover, the AR market is expected to grow in popularity, owing to a surge in demand from a variety of industries including healthcare, education, and e-commerce.

Competitive Scenario in the Global Augmented Reality Market

Investment, agreement, product launches and developments, and partnerships are some of the common strategies followed by major market players. For example, in 2021, Audi introduced an AR heads-up display in the Q4 Sportback e-tron and Audi Q4 e-tron. This display offers information through the windshield, lets the driver quickly understand the display, and aids in inadequate visibility conditions.

Source: Research Dive Analysis

Some of the leading augmented reality market players are Google, Microsoft, Niantic Inc., PTC, Apple Inc., Magic Leap, Inc., Seiko Epson, Treeview Company Limited, ScienceSoft USA Corporation., and CXR.