The Future of Augmented and Virtual Reality: Identifying Companies at the Forefront of AR/VR Innovation

AR uses digital elements to enhance a live view, often accessed through a smartphone camera. VR, on the other hand, replaces the real world with a completely immersive virtual environment.

3 min read
Augmented reality (AR) and virtual reality (VR) are two reality technologies that offer simulated environments. AR uses digital elements to enhance a live view, often accessed through a smartphone camera. VR, on the other hand, replaces the real world with a completely immersive virtual environment. AR is designed to provide additional data about the natural world and can be used for troubleshooting or informational overlays. VR is typically used for entertainment, creating larger-than-life virtual worlds, such as boxing matches. Both technologies have unique use cases, with AR increasingly used in businesses to generate an informative overlay.

The future of AR/VR

According to the most recent AR/VR market predictions, the industry is expected to generate $13.8 billion in revenue in 2022. It is projected to expand to $50.9 billion by 2026, resulting in a compound growth rate of 32.3% over five years. This expected growth is considerable as it builds upon the various ways numerous industries utilize AR/VR technologies. Like computers or smartphones, XR devices and technologies possess a fundamental technology platform that individuals can utilize for various activities, highlighting their significant potential.

The healthcare and medical industry is swiftly adopting AR/VR technologies for diagnostic, patient education, surgical visualization, treatment therapies, and other medical applications. As every individual on the planet requires healthcare at different times, the healthcare market for AR/VR is expected to achieve a compound annual growth rate (CAGR) of 26.88% by 2030, with revenues reaching approximately $19.6 billion.

Retail is another sector that has adopted the AR/VR trend, driven by consumer shopping habits that influence the market. As retailers strive to keep pace with the ever-evolving retail landscape, including brick-and-mortar stores, online retail, pop-up shops, and social media influencers, they also cater to consumer demands to test products before purchase - even if virtually. The latest technological innovation in this field is "smart mirrors" that enable customers to virtually try on clothing items in-store using AR/VR technology integrated into mirror-like displays.

Undoubtedly, the gaming industry has been the most crucial sector for AR/VR technology from the outset, and this is unlikely to change shortly. Nevertheless, another entertainment sector is gaining momentum, which is immersive sports and events. This involves various creative endeavors, including virtual stadium tours, live streaming from concerts, and courtside seats at basketball games, displaying real-time statistics and information. This market is expected to grow from $2.3 billion in 2020 to more than $56 billion in 2030.

There are several predictions for the XR industry in the coming year, including:

  • The emergence of the Metaverse is expected to grow significantly with the release of the Meta Quest Pro headset in 2023, featuring improved avatars and other features. This will lead to solid growth of 39.8% CAGR through 2030.
  • AR and AI are expected to become more closely linked, as AR applications rely on data gathered from multiple sensors to make sense of the surrounding environment. AI can simplify and enhance this process, improving accuracy beyond what can be achieved with human models alone.
  • AR-enabled navigation is expected to become more popular, providing users with more accurate directions based on their specific environment rather than just geographic coordinates. This technology could be useful for navigating complex indoor spaces such as campuses or shopping malls.

As technology advances, the demand for extended reality applications beyond entertainment, tourism, and marketing will continue to grow. Thanks to expected technological advances, we can expect faster, lighter, and more affordable virtual and augmented reality devices. This and the emergence of upcoming smartphones with improved cameras and processors will enable sophisticated immersive experiences from anywhere. We can also expect extended reality dedicated to learning, training, and healthcare treatments. Despite the challenges and obstacles that AR and VR will have to overcome, the potential benefits that this technology can bring to many areas far outweigh any negatives. Companies investing in immersive solutions will have a significant advantage in driving business success, optimizing business processes, and enhancing customer experiences. The possibilities for extended reality are still unthinkable, and we can expect to see even more groundbreaking developments in the future.

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