SCOTTSDALE, AZ – While virtual reality continues to make waves in the press, augmented reality will prove to be the bigger market in time, says ABI Research, reaching approximately $100 billion in total market worth by 2020.

AR smart glasses are forecast to ship 21 million total units in 2020, a compound annual growth rate of 78% from 2015 to 2020. Total revenues for the AR market will follow a similar trend, with an estimated CAGR of 73% from 2015 to 2020, encompassing both dedicated AR hardware sales and mobile and dedicated AR content and software revenues.

Revenues will be split between a number of major verticals, including education, gaming, healthcare, industrial, and retail, says ABI Research.

The VR market will see similar growth rates, but in a much smaller market.

“We expect revenues to primarily favor the healthcare and industrial verticals, owning approximately 54% of the market, thanks to more progressive technology adoption habits along with strong use case applicability,” says Eric Abbruzzese, research analyst at ABI Research. “On the other hand, mobile devices being used for AR will have a larger user base than dedicated AR devices across all verticals.”

Industrial and healthcare applications will continue to be the dominant verticals through 2020, says the firm. In addition, more consumer-focused verticals, such as gaming and media and entertainment, will primarily be found on mobile devices, at least until more dedicated AR devices support unique gaming content.

“Mobile devices will primarily account for software and content revenues, and they will better target consumer audiences than more expensive dedicated AR devices like smart glasses,” said Abbruzzese. “The high-end focus of verticals like healthcare and industry will demand high-end devices, and thus will see higher hardware revenues. However, the more budget-minded consumer crowd will prefer low-cost mobile AR experiences, in a similar fashion to mobile virtual reality devices.”

More advanced mobile AR content will serve as an entry point for consumers and enterprises for AR, as well as act as a test for whether further investment in more advanced devices is desired, according to ABI Research.

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