Extended Reality (XR) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Extended Reality (XR) Market is segmented by Solution (Consumer Engagement, Business Engagement), Application (Virtual Reality, Augmented Reality, Mixed Reality), End-user Industry (Education, Retail, Media & Entertainment), and Geography.

Market Snapshot

cagr
Study Period:

2018 - 2026

Base Year:

2020

Fastest Growing Market:

Asia Pacific

Largest Market:

North America

CAGR:

62.67 %

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Market Overview

Extended Reality (XR) Market is valued at USD 26.05 Billion in 2020, and is expected to reach USD 463.7 Billion in 2026, registering a healthy CAGR of over 62.67% during the forecast period (2021 - 2026). The integration of XR across the business ecosystem will result from wide applicability across multiple enterprise verticals, with a form factor that supports all-day use and a clear ROI by the help of its manufacturing efficiencies that is currently being driven by the organizational inertia, enterprise risk aversion, and sales cycles.

  • The convergence of the smartphone, mobile VR headset, and AR glasses into a single XR wearable could replace all the other screens, ranging from smartphones to smart TV screens. Mobile XR has the potential to become one of the world’s most ubiquitous and disruptive computing platforms.
  • Companie's are designing transformative XR experiences that capitalize on the potential of the human experience revolution using artificial Intelligence and Internet of Things.
  • The demand for immersive technology is driven through the rising application of artificial intelligence (AI), connected to the Internet of Things (IoT), and delivered through the cloud and integrated into systems.
  • Furthermore, the market for the extended reality (XR) is being impacted by COVID-19, primarily due to multiple factors that include physical lockdowns, essential e-commerce delivery limitations, brick-and-mortar retail closures, supply chain disruptions (supplier, manufacturer, distribution, wholesale, retail), and economic impacts.

Scope of the Report

The advent of extended reality is revamping the way people experience the physical and the virtual environments, from observation to immersion. XR is an umbrella term that encompasses both augmented reality and virtual reality, thereby covering a full spectrum of real and virtual environments. XR experience caters to business issues and creates innovative solutions to add efficiency and increase productivity to meet critical client needs. The implementation of Extended Reality (XR) provides enterprises with a platform that helps people to perform their jobs in a much effective way.

Solution
Consumer Engagement
Business Engagement
Application
Virtual Reality (VR)
Augmented Reality (AR)
Mixed Reality (MR)
End-user Industry
Education
Retail
Industrial & Manufacturing
Healthcare
Media & Entertainment
Other End-user Industries
Geography
North America
Europe
Asia-Pacific
Rest of the World

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Key Market Trends

Consumer Engagement is Gaining Traction Owing to the Emergence of Immersive Platform

  • XR devices create the illusion to make people feel as if they are in an entirely new digital world. Such technologies have been praised for its ability to create virtual tours in the stores and destinations, rehabilitate brain injury, and virtually inspect the interior and exterior design of a car which no existing technology could do. Given its enormous potential, XR technology has been increasingly applied and studied in a plethora of fields, ranging from tourism, education, retailing, gaming and healthcare to manufacturing.
  • Extended reality (XR) solution allows rich data to be easily accessible in a situational context, creating virtually unlimited opportunities in the market. Future-thinking enterprises are incorporating extended reality into their internal processes as well as product and service delivery. It provides higher customer engagement, significant time efficiency improvement, and a significant reduction in human error.
  • Through immersive experiences, businesses can tap expertise in thousands of skills from anywhere in the world. Across industries and applications, immersive experiences are pushing companies to not only think differently about what is possible but also to create new solutions that bypass the distance-based challenges they face today. 
  • Moreover, In response to the COVID-19 pandemic several physical stores are now re-opening, with hygiene and safety as a top priority. Beauty retailers such as Sephora and Ulta forbid customers from physically testing beauty products on their skin. Beauty retailers are instead turning to AR to help consumers digitally test out products to assist in buying decisions.
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North America to Remain the Largest Market Over the Forecast Period

  • North America is one of the prominent regions for the extended reality market. It has also been a pioneer in the adoption of innovations, which provides North America with an edge over the other regions.
  • Educational institutions across the United States Department of Education is using a virtual platform to help students with autism and learning disabilities in schools, across the country. In 2018, the Office of Special Education and Programs announced an investment of USD 2.5 million towards a new program that will use XR to nurture social skills in students with disabilities.
  • In the military and defense sector, the US Military is looking at immersive technologies for training purposes. The United States will also be investing as much as USD 11 billion by 2022 into virtual, augmented and mixed reality training systems, with extended reality becoming a primary focus of military innovation. 
  • Further, with the increasing usage of smart glass and head-up displays, the market for extended reality has gained traction. Smart glass is a key segment witnessing a considerable penetration of AR technologies in the region and is anticipated to grow significantly during the forecast period. 
region

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Competitive Landscape

The Extended Reality (XR) market is moderately competitive and consists of a few players. In terms of market share, some of the players are currently expanding their services across the emerging market. However, with the advancement in the immersive technology trend across the virtual platform, new players are increasing their market presence thereby enhancing their services as well as expanding their business footprint across the emerging economies.

  • May 2020 - Qualcomm Technologies Inc. partnered with global operators, smartphone OEMs and XR viewer manufacturers to deliver XR viewers to consumers and enterprises within the next year. Fifteen global operators, including China Mobile, China Telecom, China Unicom, Deutsche Telekom, EE, KDDI, KT, LG Uplus, NTT DOCOMO, Orange, SK Telecom, SoftBank, Telefonica, Verizon and Vodafone, have shared plans to sample and commercialize XR viewers to provide immersive, never-before-experiences over 5G. Aditionally, XR viewers can unlock a new generation of immersive experiences using 5G-enabled smartphones that provide high bandwidth and low latency, which is essential for high-quality XR.
  • February 2020 - Accenture opened its third Innovation Hub in India, expanding its innovation capabilities for clients. The Accenture Innovation Hub in Pune provides an immersive environment for clients to co-innovate with Accenture experts in a variety of industries and across a range of advanced technologies, including extended reality, artificial intelligence, the internet of things, blockchain and quantum computing, among others. The Innovation Hub in Pune will seamlessly integrate with the Innovation Hub in Bengaluru and the Innovation Hub in Hyderabad, and will bring the best of innovations and capabilities from India using state-of-the-art collaboration technologies. The new Innovation Hub will have more than 1,200 people working out of it, andwill feature Accenture’s second Nano Lab in the Asia-Pacific region.

Recent Developments

 

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Defination

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Consumers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Technology Snapshopt

    4. 4.4 Impact of COVID-19 on the market

    5. 4.5 Market Drivers

      1. 4.5.1 Increasing Adoption of Gesture Based Computing

      2. 4.5.2 Growing Trend of Miniaturisation in Smart Devices

    6. 4.6 Market Challenges

      1. 4.6.1 Complexity in the Implementation Process in terms of Technology and Cost

      2. 4.6.2 Vulnerability for Cyber Attacks Along with the High Cost of Implementation

  5. 5. MARKET SEGMENTATION

    1. 5.1 Solution

      1. 5.1.1 Consumer Engagement

      2. 5.1.2 Business Engagement

    2. 5.2 Application

      1. 5.2.1 Virtual Reality (VR)

      2. 5.2.2 Augmented Reality (AR)

      3. 5.2.3 Mixed Reality (MR)

    3. 5.3 End-user Industry

      1. 5.3.1 Education

      2. 5.3.2 Retail

      3. 5.3.3 Industrial & Manufacturing

      4. 5.3.4 Healthcare

      5. 5.3.5 Media & Entertainment

      6. 5.3.6 Other End-user Industries

    4. 5.4 Geography

      1. 5.4.1 North America

      2. 5.4.2 Europe

      3. 5.4.3 Asia-Pacific

      4. 5.4.4 Rest of the World

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Qualcomm Technologies Inc.

      2. 6.1.2 Accenture PLC

      3. 6.1.3 SoftServe Inc.

      4. 6.1.4 SphereGen Technologies

      5. 6.1.5 Northern Digital Inc.

      6. 6.1.6 Microsoft Corporation

      7. 6.1.7 Softweb Solutions Inc.

      8. 6.1.8 VertexPlus Softwares Pvt. Ltd.

      9. 6.1.9 Varjo Technologies OY

      10. 6.1.10 Talespin Reality Labs Inc.

    2. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Extended Reality (XR) Market market is studied from 2018 - 2026.

The Extended Reality (XR) Market is growing at a CAGR of 62.67% over the next 5 years.

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

North America holds highest share in 2020.

  • Qualcomm Technologies Inc.
  • Accenture PLC
  • Northern Digital Inc.
  • SoftServe Inc.
  • SphereGen Technologies

Are the major companies operating in Extended Reality (XR) Market.

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