Augmented and virtual reality revenues to spike in Middle East and Africa; IDC
Pokémon Go and games alike have brought AR and VR to a wider audience
International Data Corporation (IDC) has reported that the Middle East and Africa augmented and virtual reality market will grow strongly over the next five years, projecting annual growth rates of more than 100% by 2020.
IDC's 'Worldwide Augmented and Virtual Reality Spending Guide' expects the MEA market to expand from $181.59m this year to $6bn in 2020.
Saad Elkhadem, a research analyst at IDC Middle East, Africa, and Turkey, said: "The concept of augmented and virtual reality is still relatively new for both vendors and consumers alike. However, the global success of Pokémon Go has brought the concept to a much broader audience. And with industry powerhouses such as Microsoft, Samsung, Google, Sony, and Facebook pushing the technology to the masses, end-user awareness and familiarity is only going to grow."
"We forecast spending on AR and VR hardware elements to grow from $118m in 2016 to reach more than $3.2bn in 2020," added Elkhadem. "There are currently offerings spanning all price points, from thousands of dollars at the top end down to tens and hundreds of dollars - or even free in some cases - at the bottom. The main challenge is getting the technology into the hands of the masses, but even more important is the need to provide consumers with compelling content that proves this is a viable technology capable of adding meaningful value to their lives."
IDC expects consumers to account for more than $100m of the region's AR and VR spending in 2016. This represents a share of around 56%, and makes the consumer segment the biggest in the region. However, IDC expects the consumer segment's share of the market to steadily fall over the forecast period as the commercial segment sees more and more use cases emerge for the technology. From 2018 onwards, the consumer segment will cease to be the biggest spenders in the market, giving way to segments such as distribution and services and manufacturing and resources.
From a global perspective, Asia/Pacific (excluding Japan), the United States, and Western Europe will account for three quarters of worldwide AR and VR revenues in 2016, according to IDC.