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Extended Reality (XR) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
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.
New York, June 15, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Extended Reality (XR) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06195698/?utm_source=GNW
One of the main driving factors for the market is the increasing demand for reducing the distance between people and richer visual content.
Key Highlights
By identifying a great potential in the XR domain, several companies are developing supporting technologies, which may help commercialize XR technologies worldwide. For instance, in December 2021, Mawari, a leading XR streaming solution provider, announced that its 3DXR Content Streaming Platform for the Metaverse made its debut on the AWS Marketplace. A managed and curated software catalog from Amazon Web Services 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 on various vendors such as Qualcomm Technologies Inc., Softserve, SphereGen, and Northern Digital Inc.
Physical lockdowns 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 spread teams to communicate, collaborate, and find a path forward during the crisis. The diverse potential of XR application in terms of recreating the tourism experience allows multi-stakeholders to overcome travel restrictions and lockdown, allowing the crisis to act as an accelerator of the existing trends for XR adoption.
Key Market Trends
Virtual Reality segment to drive the market
Virtual reality technology involves the usage of 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 as possible, 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, which can be provided at lower costs.
Virtual reality technology has also carved its space within the gaming industry in the past few years. VR has given shape to a newer gaming generation that offers players an immersive, first-person perspective experience. In the last few years, developers, such as Oculus and HTC, have made virtual reality more accessible and more 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 toward 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 region of the extended reality market is expected to grow significantly over the forecast period, primarily due to the presence of multiple vendors making considerable investments in market innovations, such as Microsoft and Qualcomm, among others. Countries such as the United States have been one of the highly innovative Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR) markets. Most of the companies advancing in this technology are based out of the United States. Higher technology exposure and ease of smart devices have created a strong demand in the region. Microsoft’s AR product, Hololens, first released in the United States 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 in 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 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 a 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.
Also, in Dec 2021, Vuzix Corporation, a supplier of Smart Glasses and Augmented Reality (AR) technology, announced that it signed a distribution agreement with Barcotec GmbH, which is a European supplier of innovative hardware, device management cloud, and a complete service package to regional and international companies and institutions, receiving and shipping an initial order for 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 in terms of market share. However, with the advancement in the immersive technology trend across the virtual platform, new players are increasing their market presence, thereby enhancing their services and expanding their business footprint across the emerging economies.
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 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 their 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.
December 2021 - Solotech acquired XR Studios, a full-service agency specializing in extended reality, which is 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.
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.
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