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Last few decades have witnessed an explosion of various small and powerful technologies which have continued to pave their way into the mainstream owing to the huge investments poured by key players into their advancement. Fiber Optics, video games, LEDs, LCDs, and Bluetooth are just a few of the many inventions these past few decades have witnessed. Continuous efforts by key technology players have finally paid off as technologies like Virtual Reality (VR) and Augmented Reality (AR) have started showing an impressive rate of penetration not only among individual customers but also among various industry players. Virtual reality solutions use components like visors or goggles to transpose the users to some other reality i.e. virtual. Google Cardboard, an interim DIY headset from Google that uses a smartphone to control it is one such solution. Solutions like Galaxy Gear and Oculus Rift are some of the other names which have gained popularity as they offer seamless VR experience to their users. Augmented Reality, on the other hand, simply augments the users’ current state of presence. This technology allows users to add digital assets to their physical environment which is one of the major reasons driving its popularity. Continuous advancements in the underlying technologies are fueling the development of these two technologies. As advancements in these technologies continue to stream in, the prices for some solutions are witnessing a gradual year-on-year decline, thus increasing their affordability and adoption among the users.
According to a report by Knowledge Sourcing Intelligence, titled Virtual Reality Market - Forecasts from 2018 to 2023, the market for virtual reality was valued at US$ 5.409 billion in 2017 and is expected to grow at an impressive CAGR of 49.71% over the forecast period to reach the market size of US$60.901 billion by 2023. Clearly, these technologies are witnessing a solid growth, much of which is attributed to the growth of gaming and media and entertainment industry. The rapid growth of the travel and tourism industry is also contributing significantly to the market growth of these two technologies. Airbnb, Inc., for instance, is leveraging AR and VR technologies to enhance its customers travel experience. Through these technologies, the company seeks to enable people to virtually visit their potential accommodations before they actually book them. The penetration of these technologies is expanding beyond the boundaries of these industries into verticals such as healthcare, aerospace and defense, manufacturing and others. Although the penetration of Augmented Reality into industries is slow right now, it is anticipated to pick up the pace soon as more companies realize the potential of this technology.
Technology giants like Apple and Google have been investing rigorously into the augmented reality capabilities of their OS. We can expect AR-enabled smartphones to become a norm in the future and when this happens, the market growth of this technology will witness a significant surge.
Growing competition across industries is pushing industry players to offer higher technology differentiation in their solutions to avoid losing their market share. Although integration of new technologies into solutions requires higher investments, higher costs seem an affordable tradeoff for companies who seek to offer advanced solutions to their customers in order to expand their customer base and retain the existing base of customers.
Inter IKEA Systems B.V. is using augmented reality to enable its customers to preview a piece of digital furniture in their physical surrounding. Pepperfry is another such company which is using AR to enhance the user experience on their app. The New York Times has gone a step ahead. The company has invested into augmented reality to offer AR news stories to its readers. The investments by the company in this technology seem to be paying off well as many of the company’s customers experienced the 2018 Winter Olympics in a complete fashion through the Times’ AR stories.
Not only of large enterprises, these technologies are fueling the business growth of small and medium enterprises as well. Various small businesses benefitted with the widespread popularity of Pokemon Go worldwide. Many businesses, as a move to boost their business growth, partnered with the developer of Pokemon Go to make their businesses a PokeSpot and witnesses significant upticks in traffic. Applications like this have been opening doors to immense growth opportunities not only for both large enterprises and SMEs.
Over the next couple of years, more growth opportunities for these technologies are expected to open up even in sectors like retail, legal, real estate, education, journalism owing to the presence of market players like Trillenium, Solirax, Emblematic Group and many others who provide AR/VR solutions for these sectors. As these solutions or platforms continue to witness increasing traction among the customers' investment in VR and AR technology can be seen getting higher on the list of growth strategies of the companies.