Worldwide spending on augmented reality and virtual reality (AR/VR) is forecast to grow 68.8 percent from this year to about $20.4 billion in 2019, according to International Data Corporation.

The most popular commercial uses for AR/VR technology next year will be training ($1.8 billion), online retail showcasing ($558 million) and industrial maintenance ($413 million).

The industries that will spend the most on AR/VR next year are personal and consumer services ($1.6 billion), retail ($1.56 billion) and discrete manufacturing ($1.54 billion), IDC estimated.

The most popular uses of AR/VR technology next year will be virtual reality games ($4.0 billion), video/feature viewing ($2.0 billion), and augmented reality games ($616 million), IDC said.

The researcher estimated that worldwide spending on AR/VR products and services will see a five-year compound annual growth rate (CAGR) of 69.6 percent from 2017 to 2022.


The commercial sectors will lead growth in worldwide spending on AR/VR solutions with a combined share of overall spending rising from 64.5% in 2019 to more than 80 percent in 2022.

Ten industries are forecast to have AR/VR spending CAGRs of more than 100 percent on from 2017 to 2022, including state and local government (123.7 percent CAGR), resource industries (120.9 percent), and wholesale (120.9 percent).

Consumer spending on AR/VR will continue to be greater than any single industry ($7.2 billion in 2019) but will grow at a much slower pace (36.6% CAGR).

With a five-year CAGR of 119.2 percent, industrial maintenance spending will nearly overtake augmented reality gaming in 2022. Several other commercial use cases (lab and field, retail showcasing, anatomy diagnostics, and internal videography) are forecast to see CAGRs greater than 100% over the forecast period.

Type of Spending

Hardware will account for more than half of all AR/VR spending, followed by software and services, from 2017 to 2022. The largest category of hardware spending will be host devices, but AR viewers will make notable gains with a five-year CAGR of 128.3 percent.

AR software spending will make similar gains with a five-year CAGR of 121.8 percent, overtaking VR software by 2021.

Services spending will be bolstered by strong CAGRs for AR custom application development (133.0 percent), AR systems integration (130.4 percent), and AR consulting services (121.9 percent). The strong growth in AR hardware, software and services spending will push overall AR spending well ahead of VR spending by the end of the forecast.

Geographic Differences

The United States will deliver the largest AR/VR spending total in 2019 ($6.6 billion), followed by China ($6.0 billion). Japan ($1.76 billion) and Western Europe ($1.74 billion) will be the next two largest regions in 2019, but Western Europe will move into the third position in 2020.

The countries that will see the fastest growth in AR/VR spending from 2017 to 2022 are Canada (83.7 percent CAGR), the United States (77.1 percent) and China (76.2 percent). By the end of the forecast period, Canada is expected to become the fourth largest region for overall AR/VR spending.

Compound annual growth rate (CAGR) is a metric to smooth out the annual rate of change over a specified number of years as if the growth had happened steadily each year during that period.