Augmented Reality Market Size & Forecast

The Augmented Reality Market is expected to reach $210.1 billion by 2031, at a CAGR of 34.9% from 2024 to 2031. The growth of this market is driven by the increasing government initiatives for AR implementation, rising demand for AR technology in the retail & e-commerce sectors, and growing adoption in healthcare. Additionally, advancements in 5G technology and emerging opportunities in the travel & tourism industry are expected to create market growth opportunities.

Augmented Reality Market Growth Drivers

Rising Adoption of AR Technology in the Healthcare Sector

With the integration of immersive technologies, the demand for AR is also increasing across various sectors, including healthcare. Augmented reality technology plays a vital role in healthcare and medical operations. AR technology uses graphics and input systems that allow users to interact with physical and digital objects in real time. Integrating AR in healthcare can pave the way for better health results, providing more precise and accurate solutions.

AR technology plays a pivotal role in medical training and education, aiding surgeons during procedures by superimposing digital images onto the patient's body, offering real-time guidance, and ultimately reducing the need for invasive interventions. Thus, healthcare solution providers are increasingly incorporating immersive technologies into their training and learning programs. For instance, in June 2023, Amrita Hospital (India) launched an extended reality (XR) supported ecosystem in healthcare with the integration of augmented reality (AR), virtual reality (VR), and mixed reality (MR) technologies to significantly enhance capabilities in patient care, medical training, and research. Such developments in the healthcare sector are anticipated to support the growth of the augmented reality market during the forecast period.

Increasing Government Initiatives for AR Implementation Drives the Growth of Augmented Reality Market

Increasing Government Initiatives for AR Implementation

Governments worldwide are supporting the adoption of AR technology across various sectors, including healthcare, education, retail, and manufacturing. Governments are taking various initiatives and allocating funds and grants to support research and development of AR technologies and applications. For instance, in September 2022, the government of India launched the XR Startup Program, an initiative to support and accelerate XR technology startups across India. The initiatives focus on shaping the ecosystem for emerging technologies, including Augmented Reality (AR) and Virtual Reality (VR) in the country.

In addition to funding and grants, governments are actively promoting the adoption of AR technology through regulatory support. Such favorable initiatives have led to an increase in the demand for AR products and services across various sectors, contributing to the market’s growth.

Augmented Reality Market Opportunity

Advancements in 5G Technology

AR and VR remain niche technologies that have not yet achieved widespread adoption at scale. The market faces various challenges, including latency, which advancements in 5G technology can mitigate. With the ongoing advancements in 5G, augmented reality (AR) products can now support new use cases that demand low latency and high bandwidth across diverse industries and enterprises. Numerous organizations are actively creating 5G-powered AR products tailored for various industry applications.

Some of the recent developments in this market are as follows:

• In August 2022, Foundry Six (U.S.), Stops.com, Ltd. (Israel), and weR (U.S.) joined T‑Mobile USA, Inc.’s Accelerator program to build augmented reality (AR) smart glasses using T-Mobile 5G network and Snapdragon Spaces XR developer platform to transform industries such as gaming, retail, and shopping.
• In May 2022, Telstra Group Limited (Australia) partnered with Google LLC (U.S.) and Accenture plc (Ireland) to develop a new 5 G-powered augmented reality (AR) wayfinding experience at Melbourne’s Marvel Stadium to superimpose digital information onto a real-world environment.

Augmented Reality Market Analysis: Key Findings

By Offering: In 2024, the Hardware Segment to Dominate the Augmented Reality Market

Based on offering, the global augmented reality market is segmented into hardware, platform, and services. In 2024, the hardware segment is expected to account for the largest share of over 55% of the global augmented reality market. The large market share of this segment is attributed to the increasing adoption of AR-powered devices in the entertainment industry, rapid growth in smartphone sales, and the development of AR smart glasses by market players. Key market players are launching new AR hardware to improve customer experience. For instance, in June 2023, Apple Inc. (U.S.) launched Apple Vision Pro, an augmented reality headset, to increase customer experience. The device is controlled using eye contact and hand gestures for selecting and scrolling applications and has a virtual keyboard and dictation for typing. Moreover, this segment is also projected to register the highest CAGR during the forecast period.

By Type: In 2024, the Marker-based AR Segment to Dominate the Augmented Reality Market

Based on type, the global augmented reality market is segmented into marker-based AR and marker-less AR. In 2024, the marker-based AR segment is expected to account for the larger share of the global augmented reality market. The large market share of this segment is attributed to the increasing sales of smartphones and advancements in remote assistance systems for navigation in the automotive and travel & tourism sectors. Moreover, the marker-based AR segment is projected to register the highest CAGR during the forecast period.

By Application: In 2024, the Gaming Segment to Dominate the Augmented Reality Market

Based on application, the global augmented reality market is segmented into training & learning, quality inspection, tourism & visitor experience, remote assistance, designing & modeling, gaming, promotion & advertising, and other applications. In 2024, the gaming segment is expected to account for the largest share of over 33% of the global augmented reality market. The large market share of this segment can be attributed to the growing popularity of gaming and the rising demand for smartphones and gaming consoles.

However, the promotion & advertising segment is projected to register the highest CAGR during the period. This segment’s growth is driven by the widespread adoption of AR-capable smartphones, increasing emphasis on digital marketing, and the rising significance of AR in marketing and communications departments.

By End-use Industry: In 2024, the Media & Entertainment Segment to Dominate the Augmented Reality Market

Based on end-use industries, the global augmented reality market is segmented into industrial & manufacturing, healthcare, education, retail & e-commerce, media & entertainment, transportation & logistics, automotive, travel & tourism, real estate, sales & marketing, and other end-use industries. In 2024, the media & entertainment segment is expected to account for the largest share of over 25% of the global augmented reality market. The large market share of this segment is attributed to the increasing adoption of AR for gaming applications and new opportunities for AR in the media & entertainment industry.

However, the healthcare segment is projected to register the highest CAGR during the period. The growth of this segment is driven by the increasing developments in the healthcare sector to use immersive technologies for learning and training, increasing government investment in healthcare institutions, and increasing improvements in AR hardware and software by market players to make the product more affordable, user-friendly, and powerful for healthcare applications.

Geographical Analysis

In 2024, the North America Region to Dominate the Augmented Reality Market

In 2024, North America is expected to account for the largest share of over 40% of the global augmented reality market. North America’s significant market share can be attributed to the increasing government initiatives aimed at promoting the implementation of immersive technologies across various sectors, rising investments in digital infrastructure, and the presence of leading market players in the region. In December 2022, Los Angeles Rams (U.S.), a professional American football team, launched ARound technology, a next-generation fan engagement platform designed to enhance gameday fun with live and real-world AR experiences at the National Football League (NFL) in SoFi Stadium (U.S.).

However, the market in Asia-Pacific is projected to record the highest CAGR of over 37.5% during the forecast period. The growth of this regional market can be attributed to the presence of major users, producers, and suppliers of AR software and VR-related hardware in countries such as China, South Korea, India, and Japan. Many organizations in the region are implementing augmented reality wearable electronics to increase workplace efficiency, productivity, and compliance. In response, market players are launching new smart glasses to meet this demand. For instance, in February 2023, Xiaomi (China), a consumer electronics and smart manufacturing solutions provider, launched the Xiaomi Wireless AR Glass, which utilizes distributed computing and offers a retina-level adaptive display that adjusts to the lighting environment. The glasses are designed to support a comprehensive range of applications for larger displays and allow wireless connection between the smart glass and the host device.

Augmented Reality Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the Augmented reality market are Google LLC (U.S.), PTC, Inc. (U.S.), Seiko Epson Corporation (Japan), Microsoft Corporation (U.S.), Samsung Electronics Co., Ltd. (South Korea), Apple Inc. (U.S.), NVIDIA Corporation (U.S.), Qualcomm Technologies, Inc. (U.S.), Magic Leap, Inc. (U.S.), Vuzix Corporation (U.S.), Lenovo (China), Sony Corporation (Japan), Meta Platform, Inc. (U.S.), Snap Inc. (U.S.), and MAD Gaze (China).

Augmented Reality Industry Overview: Latest Developments from Key Industry Players

• In May 2023, The University of Southern California (U.S.) invested USD 1 billion for computing research and education, focusing on AI, machine learning and data science, augmented and virtual reality (AR/VR), robotics, gaming, and blockchain technologies. The initiative will help to integrate computing throughout education and research to enhance digital literacy for all students.

• In July 2023, The Premier League (U.K.) partnered with Doppelgänger (U.K.) to release an augmented reality (AR) mobile experience in its Summer Series across the U.S. This partnership aimed to offer an AR experience to the U.S. audience, enabling people to try out products and services before making a purchase.

• In December 2022, Los Angeles Rams (U.S.), a professional American football team, launched ARound technology, a next-generation fan engagement platform designed to enhance gameday fun with live and real-world AR experiences at the National Football League (NFL) in SoFi Stadium (U.S.).

Augmented Reality Market Research Summary

Key Questions Answered in the Augmented Reality Market Report: