2021 Will Be a Boon Year for AR Market Growth: ABI Research

In the augmented reality (AR) enterprise market, AR remote applications such as AR remote expertise and AR remote training will continue to grow in 2021 and lead in terms of adoption rates. According to global tech market advisory firm ABI Research, consumer AR software and content is expected to grow at over 100 percent CAGR between 2021 and 2025, to reach $20 billion in total revenue in 2025. The total AR media and entertainment market will see similar growth at 90 percent.

To help facilitate the flow of technology-focused business information in the wake of conference cancellations, global market advisory firm ABI Research is holding its Digital Tech Summit from April 14–16.

(Image credit: ABI Research)

In its new whitepaper, 68 Technology Trends That Will Shape 2021, ABI Research’s analysts identify 37 trends that will shape the technology market and 31 others that, although attracting huge amounts of speculation and commentary, are less likely to move the needle over the next 12 months. “For success in 2021, especially after a very challenging 2020, one must understand fundamental trends early, and take a view on those trends that are buoyed by hyperbole and those that are sure to be uncomfortable realities,” said Stuart Carlaw, chief research officer at ABI Research. “Now is the time to double down on the right technology investment.”

Related: What Won't Happen in 2020: 8K Adoption, Quantum Computing, and More

What Will Happen in 2021: Broad and Significant AR Market Growth

“The risk of traveling and the experience from the first months of the COVID-19 outbreak will drive demand in 2021 for proactive solutions that increase employee and business efficiency and ensure employee safety,” said Eric Abbruzzese, AR/VR research director at ABI Research. AR software/platform providers will continue to update and expand their offerings, including more features and new strategic collaborations to support, automate, and simplify large-scale deployments while providing more data and analytics tools for proactive decisions. Enterprise AR hardware will not shift dramatically, as current offerings well serve value use cases. 

However, the consumer hardware market will be more dynamic. “2021 will be an important one for AR consumer hardware,” Abbruzzese said. “nReal will ship its first headsets to consumers, while Mad Gaze will also look to expand. Also, Facebook is expected to roll out its AR smart glasses out of its Reality Labs initiative; Google may join as well after the acquisition of North, and with pressure from Facebook and others. The total AR market, including content and usage on mobile devices, will be strong. Media and entertainment and retail and commerce will lead in terms of growth and adoption rates due to the establishment of ‘at home entertainment’ and the rise of online shopping.”

What Won’t Happen in 2021: Mainstream Virtual Reality

According to Abbruzzese, “Market elements have not aligned to enable mainstream virtual reality (VR) adoption. Growth will be strong in 2021, but the user base will not reach levels once thought probable since VR competes for usage time with TVs, smartphones, and traditional displays. Price and availability of valuable content remain primary barriers. The Oculus Quest 2 is the best positioned VR device the market has seen so far, with a $300 starting price and no other hardware required to use it, such as a tether to a smartphone or PC. The cost of $300 is likely to be a sweet spot for standalone VR, but it can still be expensive for a limited use item that will be outdated by next year. While smartphone-like upgrade cycles are possible and would spur growth overall, the lack of necessity for VR will limit that possibility.”

Read the full whitepaper 68 Technology Trends that Will Shape 2021: Predictions for What Will and Will Not Happen in The Year Ahead.


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