Augmented Reality Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Augmented Reality Market is segmented by Type (Hardware and Software), End-user Vertical (Gaming, Education, Healthcare, Retail and Advertising, Automotive​, and Military and Defense), and Geography.

Market Snapshot

Augmented Reality Market Summary
Study Period: 2018 - 2026
Base Year: 2021
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 151.93 %
Augmented Reality Market Major Players

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Market Overview

The augmented reality market was valued at USD 1.98 billion in 2020, and it is expected to register a CAGR of 151.93% over the forecast period (2021 - 2026). Augmented reality is likely to present a completely new way to engage and expand the abilities of retailers. The possibilities of Augmented reality are endless, especially when combined with the ever-evolving wireless technology, which enables the integration of mobile devices and home appliances to provide an enhanced connected experience for the end-users. Huge potential opportunities in biotechnology and healthcare are expected to drive the growth of the augmented reality market over the forecast period.

  • While AR is still over a decade away from achieving its full market potential, technological advancements in the space industry have accelerated the market studied over the past two years. The increasing availability of content and the launch of developer tools, such as ARKit, drive this segment's growth. Also, the increasing adoption and availability of the cloud have been major drivers for the AR market. It provides the platform and infrastructure to address the scalability limitation of on-premise AR experiences.​
  • During the forecast period, it is expected that around 800 million smartphones will be equipped with AR-supported hardware, processing units, graphics processing units (GPUs), digital signal processors (DSPs), and neural chips to power them. Dedicated AR support within a standard OS with lower costs of developing AR apps is expected to augment the market studied in the near future.
  • The automobile industry is also moving toward the augmented reality business. Many automobile companies are making use of artificial intelligence technologies, along with augmented reality (through head-up displays), to mark their presence in the market. Manufacturers, including BMW, Mercedes-Bez, Chevrolet, Toyota, and Volvo, have already included augmented reality features. Furthermore, new auto manufactures are investing in this space to explore new applications.
  • For instance, at CES 2019 (January 2019), Nissan unveiled its plans for 3D augmented reality (AR) co-drivers, intended to answer questions and provide information about the road ahead. Nissan's technology, named the "Invisible-to-Visible technology" system, combines data from the car's sensors with the map and other information stored in the cloud and presents it all in AR. ​
  • On the other hand, mixed reality is gaining widespread recognition across business processes, and the momentum is expected to grow further. However, initial costs have been at higher price points, making it hard for consumers, but they are still relatively inexpensive for enterprises. ​
  • Additionally, amidst the COVID-19 crisis, physical lockdowns across the major regions may positively affect the AR/VR hardware demand. The enterprises worldwide are trying to find ways to get their internal and wider geographically spread teams to communicate, collaborate, and find a path forward during the crisis. This crisis can act as an accelerator to the existing trends for enterprise AR/VR adoption. ​

Scope of the Report

  • The study on AR is structured to track the demand dynamics of AR hardware and platforms across regions. ​
  • Hardware: The AR hardware scope includes the revenues accrued from AR Smart Glasses globally in USD million. ​
  • Hardware Inclusions: The commercialized AR smart glasses like Epson Moverio, Google Enterprise Edition, Vuzix Blade, and Smart AR devices like Daqri Smart Helmets are considered part of the scope.​
  • Hardware Exclusions: Mobile Phones, Hardware Components, and VR and MR HMDs​.
  • Software: The AR Software scope includes the revenues accrued from application platforms and management software, etc., across multiple end users globally in USD million. ​
  • Exclusions: AR Games and AR Apps.

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Key Market Trends

Hardware to Exhibit Higher Growth

  • One of the outstanding features of AR technology is the type of hardware used as AR can be achieved without any external devices. From the hardware perspective, heads-up displays with early forms of artificial intelligence (AI) have compelled organizations to experiment with tools that tap into augmented reality (AR) possibilities. By overlaying digital information and objects “on top” of physical environments, AR has the potential to take consumer interactions to the next level.
  • Most companies, like Daqri, Meta, ODG, Vuzix, Optivent, etc., made AR headsets focusing on enterprise applications for their devices. However, the Social media giant Snapchat, which introduced AR to mobile phones through its social media platform, also launched its first version of AR glasses, V1, in 2016. However, it could only sell about 150,000 pairs and registered a USD 40 million write-off on the hardware business after ordering 800,00 pairs from a Chinese supplier.
  • With a strong dependency on hardware, the demand for accurate measurement is expected to certainly drive hardware changes, particularly clock synchronization of all the sensors involved. The camera with high resolution, combined with a range of IR sensors and IMUs, is expected to be developed in line with estimating precisely in the 3D space. Similar trends are anticipated among the semiconductor companies incorporating these technologies into their latest chips to support accurate AR frameworks.
  • Additionally, businesses rely on MR devices to vastly increase people’s knowledge of the world around them by overlaying information in the real world. It can also improve collaboration by enabling remote teams to see the work in real-time to provide better feedback precisely. For the entertainment sector, successful mixed reality content requires an emotional connection between the viewer and their experience. ​
Augmented Reality Market : Growth of Various AR/VR Applications (%), Global (2020-2025)

North America to Register Significant Growth

  • The North American AR market is expected to grow significantly over the forecast period, owing to the presence of a large number of vendors that are also making huge investments in market innovation, coupled with the dominance of the United States in the global software market.​
  • Globally, the United States is expected to be one of the highly innovative AR markets. Most of the companies advancing in this technology are based in the United States. High technology exposure and ease of availability of smart devices have created a strong AR market in the region. Microsoft’s AR product, Hololens, was first released in the United States and Canada, and it received a positive response from the consumers in the country.
  • Further, the region has the highest adoption rate of smart devices, especially smartwatches and smart glasses. As smart devices, especially smartphones, play a major role in developing the AR market, the region offers a huge opportunity for the growth of the market studied over the forecast period.​
  • Smart glass is another segment witnessing a huge penetration of AR technologies in the region, and it is estimated to grow significantly in the forecast period. For instance, in early 2018, Snapchat unveiled its two new AR-based smart glasses, Nico and Veronica, expanding its Spectacles 2 lineup.​
Augmented Reality Market : Growth Rate by Region (2020-2025)

Competitive Landscape

The augmented reality market is gaining competitiveness. Many of the companies are increasing their market presence by securing new contracts and by tapping new markets. Companies, like Vuzix, Meta, among others, have partnered with fortune 500 companies and other large technology giants, like Caterpillar, Porsche, SAP, to increase the sales of their AR smart glasses. Companies like Vuzix, Meta, among others, have partnered with fortune 500 companies and other large technology giants, like Caterpillar, Porsche, SAP, among others, to increase the sales of their AR smart glasses.

  • March 2020 - RealWear Inc announced the product enhancement with the integration of Microsoft Teams for RealWear’s voice-controlled Android HMT-1 headsets. By leveraging this integration on headsets, the industrial worker can use both hands for performing complex procedures while remotely collaborating with peers on the subject matters via voice
  • June 2019 - Seiko Epson Corporation released Moverio Assist, a new software tool that utilizes existing smart glasses from the company to provide a quick and easy way to deploy remote assistance for teams in the enterprise space, small startups, and regular consumers as well.

Table of Contents


    1. 1.1 Study Assumptions and Market Definition​

    2. 1.2 Scope of the Study​




    1. 4.1 Market Overview

    2. 4.2 Industry Stakeholder Analysis

    3. 4.3 Industry Attractiveness – Porter’s Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products and Services

      5. 4.3.5 Competitive Rivalry within the Industry

    4. 4.4 Key Market Influencers​

      1. 4.4.1 Increasing Applications of Augmented Reality ​​

      2. 4.4.2 High Demand for Mobile-based Augmented Reality​

    5. 4.5 Market Inhibitors

      1. 4.5.1 Technical and Regulatory  Issues


    1. 5.1 Short-term Supply Chain Uncertainties​

    2. 5.2 Adjusting IT Spending ​

    3. 5.3 Increasing Interest During COVID-19 ​*

      1. 5.3.1 UK Ventilator Consortium Uses Augmented Reality to Boost Production​

      2. 5.3.2 The Dan Marino Foundation and Magic Leap have Created a Virtual Job Interview Training System for Young Adults with Autism Spectrum Disorder


    1. 6.1 AR Market Segmentation – By Type

      1. 6.1.1 Hardware

        1. Standalone

        2. Tethered​

        3. Screenless Viewer​

      2. 6.1.2 Software

    2. 6.2 AR Market Segmentation – By End-user Vertical​​

      1. 6.2.1 Gaming

      2. 6.2.2 Education

      3. 6.2.3 Healthcare

      4. 6.2.4 Retail and Marketing

      5. 6.2.5 Automotive​

      6. 6.2.6 Military and Defense​

      7. 6.2.7 Other End-user Verticals ​

    3. 6.3 Geography

      1. 6.3.1 North America

      2. 6.3.2 Europe

      3. 6.3.3 Asia-Pacific

      4. 6.3.4 Rest of World ( Latin America and Middle-East and Africa)


    1. 7.1 Company Profiles

      1. 7.1.1 Google LLC (ALPHABET INC.)

      2. 7.1.2 Seiko Epson Corporation

      3. 7.1.3 Vuzix Corporation

      4. 7.1.4 Realwear Inc.​​

      5. 7.1.5 Dynabook Europe GmbH​

      6. 7.1.6 Daqri

      7. 7.1.7 Optinvent

      8. 7.1.8 Kopin Corporation​

      9. 7.1.9 Lenovo Group Limited​

      10. 7.1.10 Fujitsu Limited

    2. *List Not Exhaustive
    3. 7.2 Augmented Reality HMD Vendor Market Share Analysis (Global)​



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Frequently Asked Questions

The Augmented Reality Market market is studied from 2018 - 2026.

The Augmented Reality Market is growing at a CAGR of 151.93% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

Google LLC (ALPHABET INC.), Seiko Epson Corporation, Vuzix Corporation, RealWear Inc., Toshiba Corporation are the major companies operating in Augmented Reality Market.

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