MARKET | Oct 23, 2019

AR and VR: who will invest in these and why?

Investments are growing in Augmented Reality, Virtual Reality and Mixed Reality, enabling technologies capable of reconfiguring business processes and procedures.

“Devices which can free hands and enhance the operational capabilities of different types of workers seem destined to widespread use in companies and, like smartphones a few years ago, to revolutionize the inventory of corporate devices and our way of working”. This is stated by Daniela Rao, senior director research & consulting of IDC Italia, commenting IDC’s data on Augmented and Virtual Reality, where an increase in European spending from 1.06 billion dollars in 2017 to 16.84 billion dollars in 2022 is expected, with a compound annual growth rate (CAGR) of 74%.

“Although they continue to represent niches in the world of corporate devices – continues Rao –, Augmented and Virtual Reality devices (glasses, viewers, helmets) attract attention and investments in Italy too and above all show very high growth rates. In specific terms, the Italian AR/VR business market absorbs a 2019 expenditure of 14 million euro, up 133% compared with the previous year and with a growth forecast for 2020 of 310%, which will lead the market to exceed 58 million euro”.

Which sectors invest most in AR and VR?

IDC forecasts that a large part of the investment growth in AR and VR will be driven by the commercial and public sector. Over the period 2019-2023, the financial (133.9% CAGR) and infrastructure (122.8% CAGR) sectors are estimated to account for the largest expenditure. On the consumer side, expenditure growth is estimated at 52.2% over five years.

The largest investments by 2023 are expected in applications for the training ($8.5 billion dollars), industrial maintenance ($4.3 billion dollars) and retail ($3.9 billion dollars) sectors. More than half of the AR and VR expenditure will be absorbed by hardware, followed by software and services.

“Augmented Reality is gaining market shares through its ability to facilitate operations, provide access to resources and solve complex problems. Sectors such as manufacturing, utilities, telecommunications and logistics are increasingly adopting Augmented Reality to perform tasks such as assembly, maintenance and repair” – said Marcus Torchia, director of research, customer insights & analysis at IDC.

Which countries invest most in AR and VR worldwide?

China is the country which will see the highest volume of spending on Augmented and Virtual Reality according to IDC, followed by the United States. The two countries together will account for almost three-quarters of all world spending by 2023.

Western Europe will be the territory with the fastest growth in AR and VR spending, with a five-year CAGR of 101.1%.

And in Italy?

According to IDC data processed for Assintel Report 2019, Italian companies’ spending on Augmented and Virtual Reality devices is still very low, but is expected to grow significantly, outpacing that of consumers within a few years. These devices, which initially attracted mainly private consumers, are in fact making inroads in companies, which increasingly use them to manage internal processes and customer services.

“The AR/VR business market for our Country – continues Daniela Rao – will exceed the value of private consumer spending by 2020. AR devices will generate most of the value in companies, while expenditure on VR devices will be much lower and these will apply to specific activities such as training, sales and construction. Within 2, 3 years, AR will radically change the way workers interact with digital information in some sectors, starting from the health care and the manufacturing ones. From input to digital information processing, AR will enable the development of new, more efficient business processes, reducing errors and execution times. AR will also affect workers’ ability to interact with physical objects by allowing real-time data to be associated with the machines used and will drive new methods of collaboration where workers can interact on the same project from different locations in real time”.

Why talk about AR, VR and MR?

An answer to the question can be found in the introduction to the White Paper recently published by Engineering, which states that “there are few emerging technologies capable of overcoming the reality and limitations of the physical world. AR, MR and VR concretely change the way people interact and perceive reality, as they take the user experience to a whole new level, reformulate industrial processes and improve overall efficiency, increasing the perception of the surrounding environment, customer experience and satisfaction”.


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