Spending on augmented and virtual reality (AR/VR) systems in Europe will reach $4.8 billion this year and maintain a 21.9% compound annual growth rate (CAGR) over the next five years to reach $10.2 billion in 2028. Stronger-than-expected growth is being driven by increased spending on VR following the launch of new devices in the European market.
► Shortage of skills will drive adoption
► Manufacturing and healthcare lead AR spending
► Retail and banking drive most VR spending
The predictions come from IDC’s latest report on worldwide spending for AR/VR. The firm says that an ageing population and a shortage of skills will accelerate adoption. Barbora Pavlikova, research analyst with IDC Data and Analytics, Europe, stated: ‘Given the current ageing population and low supply of talent and employees' lack of necessary new skills, AR/VR offers a great opportunity for organisations to bridge the skills gap by increasing their upskilling and reskilling initiatives via efficient immersive training.’
Discrete manufacturing will spend the most on AR to help optimise processes and drive cost efficiency through visualisation and streamlining of complex tasks. Augmented maintenance is the largest use case area, while training is expected to post the highest CAGR by 2028.
Healthcare will see the fastest medium-term growth in AR, with a 22.7% five-year CAGR. Here, innovation is key with the areas of greatest interest being interconnected workspaces and the expansion of virtual care and telehealth.
On the VR side, retail will remain the largest sector, accounting for 17.8% of total B2B spending with online showcasing being used to provide new shopping experiences. Banking will record the fastest growth in VR spending in the five-year forecast period.
The recent launches of products like the Meta Quest 3 will further push spending in VR, and all industries are forecast to post a double-digit five-year CAGR. Immersive training will remain the largest use case area with collaboration growing fast.
