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Extended Reality (XR) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

  • ID: 4833338
  • Report
  • February 2022
  • Region: Global
  • 140 Pages
  • Mordor Intelligence

FEATURED COMPANIES

  • Accenture PLC
  • Microsoft Corporation
  • Northern Digital Inc.
  • SoftServe Inc.
  • Softweb Solutions Inc.
  • SphereGen Technologies

The extended reality (XR) market was valued at USD 25.84 billion in 2020. It is expected to reach USD 397.81 billion by 2026, registering a CAGR of 57.91% over the forecast period. Extended reality (XR) is among the emerging technologies and encompasses immersive technologies, such as augmented reality, virtual reality, mixed reality, and other future realities that may emerge. One of the main driving factors for the market is the increasing demand for reducing the distance between people and richer visual content.



- By identifying great potential in the XR domain, several companies are developing supporting technologies, which may help commercialize XR technologies globally. For instance, in December 2021, Mawari, a leading XR streaming solution provider, announced that its 3DXR Content Streaming Platform for the Metaverse had made its debut on the AWS Marketplace, a managed and curated software catalog from Amazon Web Services that allows customers to find, buy, and immediately deploy third-party software.



- The North American region has been an early adopter of the latest immersive technologies, such as augmented reality, virtual reality, and mixed reality, that drive the market. Moreover, the region also has a stronghold owing to various prominent vendors operating in the area, including Qualcomm Technologies Inc., Softserve, SphereGen, and Northern Digital Inc.



- Physical lockdowns in light of the COVID-19 pandemic across the significant regions may positively affect the XR technology demand, and enterprises worldwide are trying to find ways to get their internal and wider geographically dispersed teams to communicate, collaborate, and find a path forward during the crisis. The diverse potential of XR applications in recreating the tourism experience allows multi-stakeholders to overcome travel restrictions and lockdowns, thus, allowing the pandemic to act as an accelerator of existing trends for XR adoption.



Key Market Trends


Virtual Reality Segment to Drive the Market


- Virtual reality technology involves using computer technology to create a simulated environment. Unlike the traditional user interfaces, VR places the user inside an experience. This means that users are immersed in and can interact with a three-dimensional world instead of viewing a monitor screen in front of them. With the simulation of multiple senses, such as touch, vision, hearing, and smell, the usage of this technology has been transformed.



- Moreover, across various educational fields, teachers have been increasingly turning to virtual reality technology, primarily to help provide a better standard of education. For instance, on a basic level, the introduction of VR in the education sector has enabled students to be immersed in a VR environment far away from the confines of physical classrooms. The technology also gives students a more visual and absorbing lesson at lower costs.



- Virtual reality technology has also carved a niche within the gaming industry over the past few years. VR has shaped a newer gaming generation that offers players an immersive, first-person perspective and experience. In the last few years, developers, such as Oculus and HTC, have made virtual reality more accessible and affordable. Oculus also launched its Oculus Quest, a standalone wireless virtual reality headset.



- Moreover, the growing pervasiveness of AI technology across VR applications also enhances virtual characters' intelligence. Google's machine learning tools add 6DoF controller-tracking capabilities to any standalone headset, while Facebook's DeepFocus framework makes usage of AI to create focus effects in VR, and LG makes usage of AI to minimize motion sickness among VR users. The Chinese tech giants Baidu and Tencent have also been working on integrating AI and VR into mobile solutions and video games.



- Cloud technologies are also promising scalability to the VR vendors. As VR-generated data increases in volume, the cloud services will store apps, data, and memory in virtual servers and stream them on-demand. This is also expected to drive innovation in VR and service updates in an uninterrupted cycle.



North America Holds a Significant Market Share


- The North American segment of the extended reality market is expected to grow significantly over the forecast period, primarily due to the presence of multiple vendors, such as Microsoft and Qualcomm, among others, making considerable investments in market innovations. Countries such as the US have been among the highly innovative Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR) markets. Most of the companies developing upon these technological advancements are based out of the US. Higher technology exposure and ease of smart devices have created strong demand in the region. Microsoft’s AR product, Hololens, first released in the US and Canada, received a positive response from users.



- The region is also expected to hold a significant market share. The US government has found direct and indirect ways to use these technologies to facilitate innovations and promote prosperity. Moreover, the Foreign Service Institute at the State Department introduced VR as an experiential learning tool for specific training. Moreover, various AR and VR training programs have been implemented to develop local workforces and manage wastewater. The region is also dominating the market owing to its higher technology exposure and easy availability of resources, which has created a robust demand for comprehensive reality solutions. Several companies in the region are deploying innovative technology into their AR/VR wearables.



- Further, with the increasing use of smart glass and head-up displays, the market for extended reality has gained traction. Smart glass is a crucial segment witnessing considerable penetration of AR technologies in the region and is anticipated to grow significantly during the forecast period. For instance, in early 2018, Snapchat unveiled its two new AR-based smart glasses, Nico and Veronica, expanding its Spectacles 2 line-up.



- In December 2021, Vuzix Corporation, a supplier of Smart Glasses and Augmented Reality (AR) technology, announced that it had signed a distribution agreement with Barcotec GmbH, a European supplier of innovative hardware, device management cloud, and complete service packages to regional and international companies and institutions, for receiving and shipping an initial order of its Vuzix Smart Glasses.



Competitive Landscape


The extended reality (XR) market is concentrated and consists of a few players. Some of the players are currently expanding their services across the emerging market to gain a market share. However, with advancements in immersive technology trends across the virtual platform, new players are increasing their market presence by enhancing their services and expanding their business footprint across emerging economies.



- In December 2021, Oppo unveiled the Air Glass, Augmented Reality (AR) glasses that feature a Cicada Wing Design and an internally developed Spark Micro Projector. The Air Glass offers a diffraction, waveguide display that supports touch, voice, head tracking, and gestures. The frame uses a monocle design for the glass, with an attachable AR-capable display that latches on to existing prescription glasses. Furthermore, integration with the rest of its ecosystem has enabled the company to enable seamless consumer experiences. For instance, when an Air Glass is paired with an Oppo Watch 2, users can use hand movements to confirm, cancel, and switch application cards.



- In December 2021, Solotech acquired XR Studios, a full-service agency specializing in extended reality, comprised of augmented reality technology for live broadcast and virtual productions. As part of the strategic plan, XR Studios will continue to operate as a separate entity and brand, progressing its strong trajectory in market leadership. The transaction accelerates the path of Solotech and XR Studios' visions to become the leading provider of extended reality solutions across the globe.



- In November 2021, Immersivecast announced the XR Metaverse Workspace, a service environment that exists to support multi-dimensional Web 3.0 with NFT, AR, VR and simplify the content development process. The offering was revealed on an initial 5G network slicing trial with Deutsche Telekom, Samsung, and Ericsson at MWC 2021 and encouraged the company to expand its market presence in Korea and the US.



Additional Benefits:


  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support
Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • Accenture PLC
  • Microsoft Corporation
  • Northern Digital Inc.
  • SoftServe Inc.
  • Softweb Solutions Inc.
  • SphereGen Technologies

1 INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Technology Snapshot
4.4 Assessment of the Impact of COVID-19 on the Market
5 MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Adoption of Gesture-based Computing
5.1.2 Growing Trend of Miniaturization in Smart Devices
5.2 Market Restraints
5.2.1 Complexity in the Implementation Process in Terms of Technology and Cost
5.2.2 Vulnerability for Cyber Attacks, Along with the High Cost of Implementation
6 MARKET SEGMENTATION
6.1 By Solution
6.1.1 Consumer Engagement
6.1.2 Business Engagement
6.2 By Application
6.2.1 Virtual Reality (VR)
6.2.2 Augmented Reality (AR)
6.2.3 Mixed Reality (MR)
6.3 By End-user Industry
6.3.1 Education
6.3.2 Retail
6.3.3 Industrial and Manufacturing
6.3.4 Healthcare
6.3.5 Media and Entertainment
6.3.6 Other End-user Industries
6.4 By Geography
6.4.1 North America
6.4.2 Europe
6.4.3 Asia-Pacific
6.4.4 Rest of the World
7 COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Qualcomm Technologies Inc.
7.1.2 Accenture PLC
7.1.3 SoftServe Inc.
7.1.4 SphereGen Technologies
7.1.5 Northern Digital Inc.
7.1.6 Microsoft Corporation
7.1.7 Softweb Solutions Inc.
7.1.8 VertexPlus Softwares Pvt. Ltd
7.1.9 Varjo Technologies OY
7.1.10 Talespin Reality Labs Inc.
8 INVESTMENT ANALYSIS9 FUTURE OF THE MARKET
Note: Product cover images may vary from those shown

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A selection of companies mentioned in this report includes:

  • Qualcomm Technologies Inc.
  • Accenture PLC
  • SoftServe Inc.
  • SphereGen Technologies
  • Northern Digital Inc.
  • Microsoft Corporation
  • Softweb Solutions Inc.
  • VertexPlus Softwares Pvt. Ltd
  • Varjo Technologies OY
  • Talespin Reality Labs Inc.
Note: Product cover images may vary from those shown

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