Virtual reality is everyone’s favorite futuristic technology, but the augmented reality (AR) market is not far behind. While the former can temporarily transport you into another realm altogether, augmented reality aims to enhance your existing natural environment.
With AR cameras, information about the world around you becomes digitally manipulated but, more importantly, interactive. This technology creates an overlay of virtual content in the real world through computer vision and object recognition.
In short, any artificial experience that complements our existing reality represents AR. If you’re just hearing about it, you may be wondering how many people know about this technology, its useful purposes, and what we can expect from this market.
To answer these questions, let’s see what augmented reality stats say on the topic and find out where the AR industry is at the moment and where it is going.
Augmented Reality Market – Key Statistics:
- In 2020, 83.1 million people in the US used AR every month.
- The augmented reality market is estimated to exceed $50 billion by 2024.
- 70% of consumers believe AR can be helpful for learning new skills.
- In 2020, the world invested $12 billion into VR/AR gaming.
- In 2020, only 1% of retailers used AR or VR to enhance shopping.
- In 2008, the first AR advertisement appeared for BMW’s MINI campaign.
General Augmented Reality Market Stats
How large is the augmented reality market? Is it just a fad or a rising giant? Let’s check what the stats on augmented reality have to say on the topic.
The Augmented Reality Market is estimated to exceed $50 billion by 2024.
(Global Market Insights)
In 2016, the AR market was worth a mere $1 billion, but its growth rate between 2013 and 2016 can serve as an excellent benchmark for future predictions. The compound annual growth rate (CAGR) for the AR industry between 2017 and 2024 should be around 65%, reaching $50 billion by 2024.
However, these estimates are currently underestimating the AR market. In 2017, it was worth a whopping $3.5 billion, and the newest augmented reality market forecast places its value at $198 billion in 2025.
In 2023, mobile augmented reality revenue is estimated to reach $12.8 billion.
Augmented reality complements mobile devices impeccably, as can be seen through the remarkable growth of the industry in this sector. With the announcement of the Metaverse, and the growing number of other AR-related options, even the doubling of revenue expected by 2025 might prove to be a serious underestimation.
Investments in AR technology are growing, and $18.8 billion was invested in AR in 2020.
The $18.8 billion invested in the augmented reality industry in 2020 marks a 78.5% increase compared to 2019.
In 2020, the world invested $12 billion into VR/AR gaming.
Gaming holds the most potential for VR investment, as well as AR; right below this industry, $4.1 billion was invested in AR training, and the same amount was invested in industrial maintenance. AR statistics the same year show that $2.7 billion was invested in AR-powered retail showcasing.
The AR and VR consumer segment had the majority spending share in 2020, at 53%.
The next segment to mark the highest spending was distribution and services at 15.8%, followed by manufacturing and resources at 13.8%, the public sector at 12.7%, and infrastructure at 3.2%. The other sectors shared the remaining 1.6%.
The latest wave of augmented reality hype can be credited to the reappearance of Pokémon Go in 2016.
The Pokémon Go craze played an essential part in raising awareness about this new technology and is often credited as one of the pioneering augmented reality products. With over 800 million downloads, this game was heavily rewarded for its efforts, as Niantic and Nintendo pocketed around 1.92 billion U.S. dollars in revenue from the joy it brought players.
The AR glasses market is expected to be worth $883.4 million by 2025.
The $143.8 million these gadgets provided in revenue in 2017 prove that there is a significant, but as of yet not fully tapped market, for these goods. The estimates expect its CAGR between 2021 and 2025 to reach 17.8%.
The AT and VR adoption rate is projected to result in almost 19 million units sold annually by 2023.
Facebook’s recent renaming and metaverse announcement raised expectations for the sale of AR and VR headsets. Due in no small part to that, the sales of VR and AR headgear nearly doubled from 2020 to 2021, and are expected to double again in 2023.
In 2008, BMW used AR to advertise the MINI.
BMW’s MINI advertising campaign in 2008 was one of the first ones to use augmented reality marketing. The German company designed a printed ad published in magazines, which would generate a virtual model of the car on the page if it was held in front of a computer camera.
Since the virtual model was connected to markers in the magazine, users could change their point of view and control the car by manipulating the paper. It was also one of the first campaigns that allowed real-time interaction with a digital model.
AR Adoption by Industry
AR has numerous potential applications outside of the gaming world that have yet to be tested and explored. Let’s see which industries are recognizing AR’s value.
88% of medium-sized businesses are already using or testing AR for some purposes.
Research shows that many growing enterprises are leveraging AR to assist them in different aspects of running their business. This technology has proven very useful in assisting product development, but also fostering collaboration, more effective training, and communication.
In 2020, only 1% of retailers used AR or VR to enhance their customers’ shopping experience.
As shopping moves further and further online, the demands from users for more convenient processes grow, especially for trying out clothes. Unfortunately, only 1% of retail companies were using augmented reality to assist users in their shopping in 2020. AR can help customers understand what they are buying better, significantly increase retailer sales and customer satisfaction in the process, and reduce returns and the costs associated with them.
AR in the gaming industry reached $6.39 billion in value in 2021.
In the next five years, with an estimated CAGR of 33.8%, this section of the AR market is predicted to reach $38 billion.
Gaming, healthcare, and engineering have the most use cases for AR.
These three fields benefit the most from implementing augmented reality products. Compared to that, 5% of AR use would be in retail. On the other hand, 67% of advertising agencies already say they are making use of AR; for comparison, in 2017, just 29% of marketing agencies had invested in augmented reality ads.
The global automobile AR/VR market will reach $673 billion by 2025.
The automotive market is another one that benefits from implementing augmented reality. Implementing this type of technology into cars by adding it to the cameras can help display hazards, historical landmarks, and other vital markings. Augmented reality market research estimates that this application will reach over $673 billion, with a CAGR of over 175% from 2018 to 2025.
Healthcare-related AR and VR products should reach $7.05 billion in value by 2026.
The importance of AR technology in the healthcare industry will only increase. This is not surprising, as it has great potential to introduce valuable changes to diagnostics, surgery, and education of new healthcare professionals, among other benefits.
Augmented Reality Consumer Stats
While AR is slowly finding its way into many industries, how familiar is the average person with its benefits? Are they interested in virtual reality whatsoever, or do they think this is something only gamers would understand – just another fad?
Let’s check what the consumer demographic statistics have to say on the topic.
In 2017, only 31% of Americans knew what augmented reality is.
Five years ago, this was a discouraging number. However, on the bright side, 70% had heard about it but were unsure of what it was. In 2023, knowledge about this technology is more pervasive, but it hovers between 70% to 75% for people between the 16-44 age group. On the downside, research on augmented reality awareness shows this percentage drops significantly for other age groups – for example, only 56% of people in the 45-54 age group were familiar with AR.
In 2020, 83.1 million consumers used AR every month.
This amounts to approximately 25% of the US population. This level of adoption represents an excellent opportunity for the augmented reality market size to grow. Adoption statistics tell us that AR is primarily attractive to younger audiences, something AR companies should consider when planning campaigns.
The global AR user base is predicted to count 216 million users by 2025.
This estimation may be an underestimation, especially considering the success AR has been having among mobile users. Pokémon Go might have started the trend and set the base for this estimate. Still, the filters available on Snapchat and Instagram, together with other upcoming projects that rely heavily on AR, such as the metaverse, may prove this AR stat wrong.
70% of consumers believe AR can be helpful in learning new skills.
People familiar with it consider AR highly valuable for obtaining new skills. 67% thought that AR would benefit healthcare, and a slightly lower percentage (64%) felt shopping could be massively improved through this emerging technology.
Software access is the biggest obstacle to the mass adoption of XR, and by extension, AR.
This is a shift from 2019 and 2018, when bulky gear and poor user experience were the biggest issues in the future of augmented reality, respectively. Other current worries include user experience (cited by 65% of respondents), content offerings (53%), and consumer costs (27%).
In 2019, 38% of users believed that AR needs to become more advanced to make gameplay more enjoyable.
Furthermore, 36% of users would have liked batteries on AR gear to last longer, and the same percentage would have preferred AR apps and glasses to become cheaper. Another 36% agreed that AR games couldn’t yet fit personal preferences. An interesting piece of augmented reality data is that only 31% cited multiplayer as their main point, but 32% agreed that AR should be combined with exercise and other physical activities.
We’ve seen how AR affects different sectors and how its adoption is looking, but what do the people who are actually using it think? What are the biggest benefits of AR for the people using it?
72% of US consumers say that better collaboration is one of the top four benefits of AR at work.
The other three benefits listed in this survey were increased efficiency (69%), adoption of new business models or offerings at 68%, and better marketing (61%). This somewhat answers the “How is augmented reality used in businesses?” question and might offer excellent insight to companies wondering whether they should implement AR. Overall, it’s safe to say that more than half of the employees interested in AR found it helpful in the work environment.
71% of customers say they would probably shop more often if they used AR.
Online shopping seems to be on a never-ending upward streak. However, it is not without disadvantages: Approximately 27% of customers returned goods because they weren’t “as described.”
AR adoption would allow users to virtually “try before they buy” – an important aspect of a successful brick-and-mortar shopping experience, and its most significant edge over the online shopping sphere. If applied well, AR would allow shoppers to make more confident decisions and purchases, adding another layer of convenience to the online shopping process, and preventing return costs for sellers.
Implementing AR could lead to 40% higher conversion rates.
As some previous augmented reality retail stats emphasized, AR allows for a “try before you buy” approach to online shopping, so adopting this technology into your offer would likely result in a significant increase in your sales. Furthermore, the same approach might reduce return rates, which have been substantially growing in recent years, while increasing post-purchase satisfaction and customer loyalty.