July 14, 2022
BEIJING – Virtual and augmented reality technologies, which are vital components to creating a virtual presence in the metaverse, are expected to witness rapid growth in the next few years and inject fresh impetus into a wide range of sectors like education, healthcare and entertainment, said a report released by market consultancy International Data Corp.
Data from IDC showed that the investment scale of the global AR and VR market was close to $14.67 billion in 2021, and is expected to increase to $74.73 billion in 2026, with a compound annual growth rate, or CAGR, of 38.5 percent. Specifically, the CAGR of the Chinese market is expected to reach 43.8 percent during this period, ranking first across the globe.
IDC said the IT-related expenditure in China’s AR and VR market reached about $2.13 billion in 2021 and will increase to $13.08 billion in 2026, making it the second-largest market in the world. Specifically, AR expenditure will increase rapidly with a 49 percent CAGR, while VR expenditure will maintain steady growth with a 41.5 percent CAGR.
AR/VR hardware products will grow steadily with a CAGR of 47.8 percent in China, which is likely to occupy more than half of the country’s AR/VR expenditure, the report said.
IDC predicted that over the next five years, VR games will account for 30 percent of the country’s total VR market. Games, training and collaboration are expected to become the main application scenarios of VR in 2026.
A hot tech buzzword, metaverse promises a future in which the virtual and physical worlds are inextricably interconnected. The concept of metaverse refers to a shared virtual environment or digital space created by technologies including VR and AR.Tech giants have jumped on the metaverse bandwagon and invested heavily in the state-of-the-art VR and AR technologies, such as Chinese tech behemoth ByteDance and major foreign names like Meta and Apple.
Global shipments for VR headsets jumped 241.6 percent in the first quarter compared to the same period last year, said IDC.Meta captured 90 percent of the market, followed by ByteDance’s Pico with a 4.5 percent share.
VR and AR devices will benefit massively from 5G’s high bandwidth and speed of transmission. The country is ratcheting up efforts to foster emerging consumption models such as 5G plus VR/AR and immersive gaming and promote the integration of 5G into life services, according to the Ministry of Industry and Information Technology.
More efforts will be made to speed up the integration of VR with 5G, ultrahigh definition video and artificial intelligence, strengthen international exchanges and cooperation in the VR field and jointly explore new areas to bolster technological advancement, said the ministry.
Claire Zhao, market analyst at IDC China, said China’s VR/AR sector has promising prospects, along with the advancement of consumer-level hardware products and a more abundant content ecosystem.
“VR headset shipments will continue to increase and are expected to exceed 10 million units in 2026. Commercial, education, office, and healthcare will be the main application scenarios,” Zhao said.
He Lizhong, an analyst from Capital Securities, said VR/AR is considered to be a core application scenario of 5G in the future and another important end-use product after smartphones.
Superfast 5G mobile network also represents an opportunity to accelerate the adoption of AR and VR by shoppers and marketers, He said.