The global virtual and augmented reality market features a highly dynamic and challenging competitive landscape with the presence of a large number of some of the world’s leading technology firms as well as some small-scale niche players, observes a recent report by Transparency Market Research. International technological giants operating in the market, such as Google, Inc., Oculus VR LLC, HTC Corp., Microsoft Corp., and Sony Interactive Entertainment LLC have the benefit of well-established brand images, vast funds for R&D activities, and excellent global reach.
The treat of new entrants is low at present, however, rapid technological advancements are expected to attract more players to enter this market. Moreover, a significant rise in partnerships and strategic alliances in the market and high investment scenario (for continuous investment on technology R&D) by larger IT/technology firms are also expected to increase the threat of new entrants for this market.
As a result, the market is expected to become intensely competitive in the near future but will continue to highly lucrative owing to the rising set of application areas. Transparency Market Research estimates that the market will expand at an exponential CAGR of 92.5% over the period between 2016 and 2024, rising to US$547,207.68 mn by 2024. In terms of components, the hardware sector presently leads and will continue to account for a large chunk of the market’s overall revenue over the forecast period as well. Geographically, North America dominated the global market in 2015, accounting for a nearly 79% of the overall market.
Staggering Rate of Technological Progress Makes Market More Promising?
The pace of technological progress and introduction of innovations in the fields of virtual reality and augmented reality has quickened significantly faster as compared to many other technology-driven sectors. With vast improvement in the competency of hardware elements to the revolutionary improvements in software applications supporting VR and AR hardware, the landscape of the global virtual and augmented reality market has sizably altered and improved in the past few years.
Recent advances in the fields of both virtual and augmented reality, such as the recently launched virtual reality goggles by Fove Inc., which contain infrared-based eyeball movement tracker, or the Manus VR hand gloves, which can help end-users to visualize ones’ hand in the virtual environment, underscore the field’s potential in the near future. TMR believes that such constant innovations will be the key force compelling consumers to adopt VR and AR systems and solutions on an increased rate in the near future.
High Initial Cost of Devices to Hinder Adoption across Cash-strapped Economies
The vast funds and resources invested in the research and development of advanced VR and AR products as well as the high costs of most hardware elements used in these products make most VR and AR offerings fairly more expensive compared to conventional electrical or electronic devices. For instance, the average price of a VR head mounted display was approximately US$ 696.4 in 2015 while AR glasses were priced at an average of US$1,514.0. Cost being an important buying criteria for a vast share of global consumers, especially the ones across developing or under-developed countries and regions, high cost of VR and AR products is one of the key factors limiting their adoption.
However, as has remained the case with consumer-oriented electronic devices such as television, smartphones, and tablets, the prices of VR and AR hardware components is expected to swiftly come down in some years from now. The prices of hardware components are, however, expected to decrease at a slow rate owing to the high focus and vast investments directed toward the manufacture of innovative products.
This review of the market is based on a recent market research report published by TMR, titled “Virtual and Augmented Reality Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 - 2024.”
For the study, the global virtual and augmented reality market has been segmented as follows:
Global VR and AR Market, By Component
- Head Mounted Display
- Head Up Display
- Other (Camera and Projector)
Global VR and AR Market, By End-use Application
- Media and Entertainment
- Defense and Aerospace
- Others (Manufacturing and Energy)
Global VR and AR Market, By Geography
- North America
- Asia Pacific
- Middle East and Africa
- South America