FRAMINGHAM, MA – Worldwide spending on augmented reality and virtual reality (AR/VR) is forecast to achieve a five-year CAGR of 71.6% over the 2017-2022 forecast period, according to the International Data Corp.

Spending on AR/VR products and services is forecast to reach $27 billion in 2018, up 92% year-over-year.

The consumer industry maintains its position as the largest source of spending for AR/VR products and services over the course of the forecast period, reaching $53 billion by 2022. This is followed by spending in the retail, discrete manufacturing, and transportation industries, representing $56 billion collectively by 2022.

Virtual reality gaming continues to be the dominant AR/VR use case in 2018, with spend expected to reach $7 billion. Over the course of the forecast period, retail showcasing represents the use case with the largest CAGR of 119.3%, followed by lab and field and film and television amusement.

New use cases for 2018 include public infrastructure maintenance, as well as 360-degree educational video viewing (K-12).

Host devices represent the top technology category for 2018, with spending to reach $10 billion, followed by VR software at $5.7 billion. With a 141.6% CAGR, AR viewers represent the top technology category over the forecast period, followed by AR systems integration, and AR customer application development.

The consumer sector maintains its leadership position this year, with spending forecast to be $14.2 billion, while the distribution and services sector is estimated to achieve a 34.4% CAGR over the forecast period, with spend to reach nearly $72 billion by 2022.

Manufacturing and resources follows, estimated to achieve an 18.5% CAGR over the forecast period, while public sector is forecast to reach $33.5 billion by 2022.

"Commercial interest in both augmented and virtual reality continues to accelerate as new hardware ships, improved software appears, and more use cases evolve," said Tom Mainelli, vice president of Devices and AR/VR at IDC. "A recent IDC survey of US IT decision makers showed a huge percentage of companies testing both technologies, and we expect that appetite will only grow as major industry players roll out the next generation of AR and VR experiences throughout the rest of 2018."

The US will maintain a strong foothold as the region with the largest CAGR over the forecast period at 99.1%. The Middle East & Asia, and Asia Pacific (excluding Japan) (APeJ) will experience similar CAGRs over the forecast period, followed closely by Latin America. In 2018, China will top all regions in spend at $10.2 billion, with top spending in host devices, followed by VR software and AR software.

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