Spending on augmented (AR) and virtual reality (VR) headsets, smart home devices and wearables is expected to reach $372.1 billion by the end of this calendar year and to grow to $542.8 billion by the end of 2025, according to a new report from International Data Corporation (IDC).
Growth will be driven by new devices coming onto the market from established and start-up companies, and by new users of the devices. Legacy users have moved past exploratory and pilot trials into broader deployments, while a growing number of consumers have shown pent-up demand for robust gaming solutions. The actual use of the devices will also evolve, from consuming and interacting with content on the device to connecting with other devices and systems to serve seamless experiences at work and at home.
“Virtual Reality headsets are seeing strong growth in 2021 from both consumer and commercial buyers,” said Tom Mainelli, IDC augmented and virtual reality team vice president, in a prepared statement. “We expect VR growth to continue well into the future as more consumer and enterprise use cases present themselves. Today, AR headsets are primarily focused on enterprise use cases, but we do anticipate consumer-focused headsets will gain traction in the later years of our forecast as major technology companies enter the space with new products.”
IDC added that interest in smart home solutions is largely driven by promises of enhanced entertainment, convenience, safety and security. However, the growth of this market will be impeded by consumer concerns about security and privacy. Other concerns will include price sensitivities to upfront and ongoing costs of devices and services, as well as the economic uncertainty stemming from the volatility of labor and financial markets across the world.