GVR Report cover Augmented Reality Market Size, Share & Trends Report

Augmented Reality Market Size, Share & Trends Analysis Report By Component, By Display (HMD & Smart Glass, HUD, Handheld Devices), By Application, By Region, And Segment Forecasts, 2021 - 2028

  • Published Date: Feb, 2021
  • Base Year for Estimate: 2020
  • Report ID: 978-1-68038-820-6
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 100

Report Overview

The global augmented reality market size was valued at USD 17.67 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 43.8% from 2021 to 2028. The rising demand for remote assistance and collaboration from enterprises that assist in workflow management and optimization is expected to propel market growth. Businesses are using Augmented Reality (AR) -based apps for tracking, identifying, and resolving technical issues as well as for tasks, such as retrofitting, assembling, manufacturing, and repairing production lines. The growing preference among individuals for smartphones, smart glasses, and other handheld and wearable devices is driving the adoption of mobile AR technology to provide immersive experiences. As such, companies are particularly exploring the potential of AR technology to offer a customized and interactive experience to customers. For instance, in June 2018, Hennes & Mauritz AB’s brand Monki adopted AR technology to offer a 3D experience to its customers through smartphones while presenting garments on the online platform.

U.S. augmented reality market size, by display, 2016 - 2028 (USD Billion)

The growing adoption of AR in healthcare applications is expected to drive the growth of the market. Several AR-based solution providers are collaborating with healthcare organizations to provide AR-powered healthcare applications for various purposes. For instance, in November 2018, FundamentalVR entered into a strategic alliance with Mayo Clinic to jointly develop surgical VR simulations. Fundamental Surgery, a platform by FundamentalVR combining virtual reality with haptics to provide an affordable surgical simulator, has already been implemented at Mayo Clinic’s main campuses in the U.S. states of Minnesota, Florida, and Arizona. The adoption of AR technology has also been gaining traction in the marketing and advertising fields, especially since the outbreak of the COVID-19 pandemic, as AR-based virtual events, such as digital product and store launches, virtual exhibitions and tradeshows, and online commercials, are becoming the new norm. For instance, in July 2020, Blippar.Com Ltd. delivered the world's first product launch using AR technology and provided a highly interactive digital experience during the launch of OnePlus Nord.

The growing preference for using augmented reality in construction and architecture bodes well for the growth of the industry. AR technology can be used to prepare a 3D model of a plan using mobile devices to help architects in bridging the gap between imagination and reality. Similarly, in the education industry, AR can be used to provide a more detailed, immersive, and real-view knowledge to students. The potential AR holds in helping students in better understanding of the educational concepts using 2D/3D modeling, discovery-based learning, AR books, AR games, and AR-based skill development also bodes well for the growth of the market.

AR technology can also potentially transform indoor navigation. For instance, software development company MobiDev has already demonstrated indoor navigation using its ARcore platform by constructing an optimal route to the user’s desired destination and demonstrating it on a mobile device. When it comes to outdoor navigation, AR technology can help tourists in searching for suitable accommodation and selecting sites and locations to visit with the help of AR-based virtual tours. For instance, Hubs Hotels by Premier Inn has transmuted its rooms into a city map as part of the efforts to help customers in knowing about the tourist attractions near the hotel and other useful details. The growing adoption of AR technology in the travel and tourism industry is expected to drive the growth of the market for augmented reality.

Continued advances in AR technology and the growing adoption of the technology in consumer applications is driving the need for compatible AR chipsets. Companies, such as Qualcomm, AMD, and Intel, are responding to the situation and launching state-of-the-art AR-enabled chipsets. For instance, in May 2018, Qualcomm launched the Snapdragon XR1 chipset, which is dedicated to the extended reality platform. In December 2019, the company unveiled its 5G-enabled Snapdragon XR2 chipset for AR and VR hardware. Similarly, in July 2019, MediaTek Inc., a fabless chipmaker based in Taiwan, launched the MTK i700 chipset for AR applications which is focused on Artificial Intelligence (AI) and Internet-of-Things (IoT).

Display Insights

The Head-Mount Display (HMD) and smart glass segment accounted for the largest revenue share of over 65.0% in 2020. It is expected to continue dominating the market over the forecast period owing to the significant demand for HMDs and smart glasses in industrial and enterprise settings. The growing number of applications in these settings, advances in OLED technology, and availability of lightweight HMDs are expected to drive the growth of the segment. While AR smart glasses require high computation power, the SoC is capable of processing the viewer's vision in real-time. For instance, in July 2019, Nvidia showcased an AR wearable that features a Foveated AR, which can track the viewer's eye and offer an improved visual experience. HMDs and smart glasses are also expected to transform the supply chain by identifying the possible use cases or optimal use cases in logistics and supply chain.

The handheld devices segment is expected to register the highest CAGR of over 45.0% from 2021 to 2028 owing to the growing deployment of handheld devices in retail and e-commerce applications. The proliferation of smartphones and tablets and the continued integration of AR in handheld devices is allowing companies to enhance consumer experience and gain a competitive edge in the industry. Handheld devices can help customers in trying out in-store products before making a buying decision. Aggressive deployment of AR across social media platforms is also driving the growth of the handheld devices segment. Companies, such as Google LLC and Apple Inc. are heavily capitalizing on the AR technology leveraging AR Core and AR Kit, respectively. For instance, in May 2019, Google LLC introduced AR applications in the Pixel 3A as well as the older version of the smartphone.

The Heads-Up Display (HUD) segment is expected to witness considerable growth over the forecast period owing to the latest innovations in driver assistance systems. A HUD system allows the driver to concentrate on the road while simultaneously tracking vehicle data, such as warning signals, speed, and turning indicators, on the windshield. Many automotive electronics companies, such as WayRay AG., Visteon Corporation, and Continental AG, have made a foray into the AR HUD market to tap the potential of immersive tools for better productivity and quality of work. In September 2020, Bayerische Motoren Werke AG (BMW) introduced an AR HUD device for prototype engineering and vehicle concept. The company also introduced AR apps that offer a virtual experience of its cars.

Application Insights

The industrial and manufacturing application segment accounted for the largest revenue share of over 20.0% in 2020 and is expected to maintain its lead over the forecast period. AR helps industries in ensuring efficient operations by detecting glitches quickly, keeping all the processes going, and subsequently reducing manufacturing downtime. The deployment of AR in the aerospace and defense industry is in its nascent stages and is limited to assisting technicians in making appropriate decisions while carrying out manufacturing activities and in reducing the time required to find the information for repairing a particular device or a weapon.

The healthcare segment is anticipated to witness the fastest growth over the forecast period owing to the growing adoption of AR technology in vein visualization, surgical visualization, and medical training and education. The automotive segment is expected to exhibit a CAGR of over 45.0% over the forecast period. Several automotive companies are integrating the AR technology in their automobiles and leveraging the capabilities of AR technology to offer a better experience to their customers. The most significant contribution of AR has been in the field of security and awareness, wherein companies are integrating AR-based, advanced safety systems with online safety features.

The education segment is anticipated to witness significant growth over the forecast period in line with the aggressive use of AR technology by schools and universities. The outbreak of the COVID-19 pandemic has triggered the adoption of AR technology in the education industry as educators are trying to find more innovative ways of teaching and offering dynamic content for students. AR technology can particularly help in enhancing the student experience. Subsequently, several educational technology companies, such as Neo Bear, Strivr Labs, Inc., Talespin Reality Labs, Inc., and Health Scholars, among others, are exploring the potential of AR technology for educational applications. Virtual platforms are gaining popularity in the retail and e-commerce industry in line with the growing consumer preference for online shopping. AR technology can particularly offer a ‘try before you buy’ digital experience to customers and help retailers in reducing the rate of returns significantly.

Component Type Insights

The hardware component segment accounted for the largest revenue share of over 55.0% in 2020. The segment is expected to continue dominating the market over the forecast period owing to the growing adoption of AR devices across various industries and industry verticals, including education, healthcare, manufacturing, and retail and e-commerce, among others. For instance, AccuVein Inc., a medical imaging solutions provider, is using projection-based AR technology to project the image over the skin and help doctors in finding a suitable vein for vaccination. The key market players are investing aggressively in advanced AR products, fueling the demand for AR-compatible hardware. For instance, in January 2020, Hangzhou Tairuo Technology Co., Ltd. (Nreal), a mixed reality user experience provider, launched Nreal Light AR glasses with six Degrees of Freedom (DoF) spatial tracking and two spatial cameras for an improved experience of mixed reality.

Global augmented reality market share, by component type, 2020 (%)

The software component segment is anticipated to exhibit the highest CAGR from 2021 to 2028. The adoption of AR technology is gaining traction in the wake of the COVID-19 pandemic as individuals are looking forward to having an immersive and real-like experience at home. The proliferation of smartphones also bodes well for the growth of the software segment. AR software providers are expected to continue upgrading their offerings with new features and indulging strategic partnerships to support, automate, and simplify large-scale AR deployments while offering more data and analytics tools required for proactive decisions. The growing popularity of AR applications, such as AcrossAir, Google Sky Map, Layar, and Lookator, is also expected to contribute to the growth of the segment. Enterprise software is also observed to boost the AR software market. For instance, Quick look, an AR-based tool by Apple, Inc. exclusive for iOS and iPad OS, allows users to experience specific products directly within their environment and is aimed at e-commerce companies willing to help customers in making informed purchase decisions.

Regional Insights

North America dominated the augmented reality market in 2020 and accounted for a revenue share of around 35.0%. The U.S. accounted for a substantial share of the regional market as the U.S. is home to several technology companies, such as Google LLC; Microsoft; Apple, Inc.; and Magic Leap, Inc.; among others. The U.S. also leads in terms of the adoption and deployment of the latest technologies. Europe is also expected to witness considerable growth over the forecast period driven by the growing adoption of AR technology in gaming and entertainment applications. Germany is particularly emerging as a gaming hub.

Asia Pacific is expected to emerge as the fastest-growing regional market registering a CAGR of over 45.0% from 2021 to 2028. China and Japan are dominating the regional market leveraging a massive customer base and aggressive adoption of online platforms for various purposes. The region is anticipated to witness rapid adoption of AR technology drive by the continued rollout of high-speed 5G networks. India is also emerging as a promising regional market. In India, the manufacturing and healthcare industry verticals, which rely significantly on hands-on labor for operating machinery and conducting medical procedures, are particularly expected to adopt the AR technology. AR technology can potentially allow obtaining an unrestricted stream of real-time images, information, and analytics by wearing AR headsets while operating machinery and conducting medical procedures.

The Middle East and Africa and Latin America regional markets are anticipated to witness substantial growth from 2021 to 2028. The rising number of AR start-ups and multinational companies, rising levels of disposable income, and the growing adoption of AR in the oil and gas industry are expected to drive the growth of the regional markets. Saudi Arabia, the UAE, Brazil, and Mexico as particularly emerging as the hubs of AR adoption as governments of these countries are putting a strong emphasis on harnessing the potential of AR. For instance, in the UAE, the Ministry of Health and Prevention (MoHAP) is introducing several health services that are based on the AR, Virtual Reality (VR), and Artificial Intelligence (AI) platforms.

Key Companies & Market Share Insights

The market for augmented reality can be described as an industry where several opportunities are still untapped. Market players are investing aggressively in Research and Development (R&D) to introduce innovative AR innovations for consumers and enterprises and to integrate new technologies and develop AR-compatible hardware and software with distinctive features as part of the efforts to gain a winning edge over their competitors. Several e-commerce companies are rapidly adopting AR technology to offer the best immersive experience and other advanced features to their customers. For instance, Emersya, an online publishing platform, is leveraging immersive technologies to promote their products in stores and on online platforms. Similarly, furniture retailer IKEA is leveraging AR technology to offer a preview of how a specific piece of furniture looks in an actual room or any desired space.

Key industry participants are striking strategic deals with smaller technology firms and start-up companies to strengthen their market presence amid the intensifying competition. For instance, in August 2020, Google Ventures invested around USD 14.5 million in Blue Vision Labs, an AR start-up company based in the U.K. Similarly, in October 2020, Facebook relaunched its Spark AR Partner Network program, which envisages connecting creators and brands with AR professionals as part of the efforts to enable new experiences on Instagram and Facebook. Some key players operating in the augmented reality market include:

  • Microsoft

  • Google LLC

  • Apple, Inc.

  • Sony Corporation

  • Blippar Ltd

  • Infinity Augmented Reality Ltd.

  • Niantic, Inc.

  • Zappar Ltd.

  • Magic Leap, Inc.

  • Wikitude GmbH

Augmented Reality Market Report Scope

Report Attribute


Market size value in 2021

USD 26.75 billion

Revenue forecast in 2028

USD 340.16 billion

Growth Rate

CAGR of 43.8% from 2021 to 2028

Base year for estimation


Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD million/billion and CAGR from 2021 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Component, display, application, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; U.K.; Germany; China; India; Japan; South Korea; Brazil

Key companies profiled

Google LLC; Microsoft; Samsung; Magic Leap, Inc.; Sony Corporation; Blippar Ltd.; Niantic, Inc.; Zappar Ltd.; Wikitude GmbH; Vuzix Corporation; Infinity Augmented Reality Ltd.

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the global augmented reality market report based on component, display, application, and region:

  • Component Outlook (Revenue, USD Million, 2016 - 2028)

    • Hardware

    • Software

  • Display Outlook (Revenue, USD Million, 2016 - 2028)

    • HMD & Smart Glass

    • HUD

    • Handheld Devices

  • Application Outlook (Revenue, USD Million, 2016 - 2028)

    • Aerospace & Defense

    • Automotive

    • Education

    • E-commerce & Retail

    • Gaming & Entertainment

    • Healthcare

    • Industrial & Manufacturing

    • Others

  • Regional Outlook (Revenue, USD Billion, 2016 - 2028)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • U.K.

    • Asia Pacific

      • China

      • Japan

      • India

      • South Korea

    • Latin America

      • Brazil

    • Middle East & Africa

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