According to the company’s “Worldwide Semiannual Augmented and Virtual Reality Spending Guide”, global spending on Virtual Reality (VR) and Augmented Reality (AR) will reach $17.8 billion in 2018, up from $9.1 billion predicted it would be spent in 2017.

Meanwhile, Canalys forecasts THAT VR headset units will grow with a CAGR of 140% reaching 1.5 million units this year and will reach 9.7 million units by 2021.

Global VR and AR spending will be higher in 2018

According to the company IDC, global spending on Virtual Reality and Augmented Reality technologies will increase by almost 95% this year, compared to 2017. This year, spending will reach 17.8 billion, up from 9.1 billion in 2017. In addition, this growth will continue to reach a CAGR of 98.8% in the period 2017 to 2021.

Of all countries, the United States spends the most on this technology this year, spending about $6.4 billion. This region will experience some acceleration, peaking in 2020. The next region with a spending of 5.1 billion is Asia Pacific (except Japan), which in contrast to the United States, spending will fall by 2021. And finally, the EMEA region will allocate $3 billion.

But both Canada, Central and Eastern Europe will be the fastest growing regions (139.9% and 113.5% respectively). Japan will be the region with the slowest growth (36.5%) and the United States and Asia Pacific will have a CARG of more than 100% in the next 5 years.

The consumer sector spends the most on VR and RA

By sector, the IDC study highlights the consumer sector as the main in spending on both VR and RA. In fact, this year it expects spending of $6.8 billion, with a CAGR of 45.2% that will increase spending to $20 billion in 2021.

In addition, from 2017 to 2021 the game will be the most popular use of both technologies. The company emphasizes that nearly three-quarters of the total spending will go to both hardware and VR software, while AR’s spending will lean more toward the software.

“Commercial entities are ready to embrace Virtual Reality for both customer-oriented and inmate use cases,” said Marcus Torchia, research director at IDC Customer Insights & Analysis. “There are many opportunities here to develop commercial-grade hardware and applications that meet the needs of these industries. Meanwhile, phone-based AR is likely to attract most of the short-term excitement and many companies are already experimenting with AR.s apps and services. Some of them will be useful, many won’t be, but over the course of the next 12 to 18 months, we should start to see developers begin to understand the potential of AR.”

Meanwhile, the most trade-dedicated sectors will account for just over half of spending (60%) this year and will increase to 85% in 2021. Within trade, distribution and services will be the largest expenditure ($4.1 billion), especially the retail, transportation and professional services industries. The showcases and showcases 4.0 will be the largest use cases, taking advantage of the benefits of Virtual and Augmented Reality to capture the attention of customers, reaching an expense of 950 million dollars during this year and a CARG of 225%.

On the other hand, the second sector that will spend the most on VR and AR is manufacturing ($3.2 billion), especially the manufacturing industry of discrete manufacturing and process construction.

“Virtual Reality will continue to drive higher levels of spending over the next 12-18 months, as consumer and commercial use cases gain traction. There is now a great appetite for companies seeing enormous potential in technology, from product design to retail,” said Tom Mainelli, vice president of device and AR/VR program at IDC. “Meanwhile, the Augmented Reality market will deliver more modest levels of short-term spending on smartphones and tablets that are likely to attract the most attention from consumers.”

The number of Virtual Reality devices will reach 9.7 million units by 2021

Canalys estimates that the number of Virtual Reality devices will increase from 1.5 million in 2018 to 9.7 million units in 2021, with a CAGR of 140%. Of all the types of headsets that exist for VR, Canalys expects the independents or “Standalone” to be the ones that drive the market, getting twice as many shipments in 2018 compared to 2017 (7.6 million units).

The North American region was the one that acquired the largest number of independent headset units (43%), followed by China (27%), Asia Pacific (18%), EMEA (11%) and finally Latin America, which only brings together the 1% global units.

The standalone headphones from HTC, Oculus and Lenovo are the ones that will help this growth occur.

However, in the case of Oculus, according to Vincent Thielke, Canalys researcher “Oculus Go will not attract the consumer’s attention when it launches. The additional cost of the headset and the fact that a smartphone-based solution, such as Gear VR that can offer a similar experience, will inhibit initial consumer acceptance. But there will be excitement for this new category of VR headsets, and Oculus must make sure that its next mobile Virtual Reality prototype, Project Santa Cruz, achieves a high level of quality to remain relevant in Virtual Reality”

On the other hand, HTC with its HTC Vive Focus is in a good position to attract Virtual Reality consumers and businesses, launching their device in China at a price similar to that of a high-end Smartphone ($600).

“HTC clearly does not pursue volume, but moves towards the most important value segment, which is the future of Virtual Reality. Consumer adoption of Virtual Reality beyond the game is still unstable, but commercial use cases are emerging rapidly,” said Jason Low, an analyst at Canalys.

In fact, Chinese Virtual Reality devices grew in 2016 because they didn’t focus on having a large volume at a low price. This was key for Goblin’s Pico headphones to gain a spot in the market.

“Pico’s next headset is expected to sell at a higher price than the Goblin, underlining the premium strategy of Chinese sellers,” Low said.

Sumerian, Amazon’s platform for Virtual and Augmented Reality

The Virtual Reality market is clearly a growing market and large companies are aware of it. Google, HTC, Apple, Facebook, Microsoft are investing in it, and the last company to make a foothold has been Amazon.

Amazon has recently launched a platform called Sumerian, to make it easier for companies to create Augmented Reality and Virtual Reality without the need for technical knowledge, such as the use of three-dimensional graphics.

To use Sumerian developers simply have to choose between Amazon’s catalog of three-dimensional objects and characters and drag and drop in the scenarios where they want to develop the VR/RA. The characters are also customizable, as well as interact with the user using Amazon’s voice assistant, Alexa.

Plus, and everything you believe in Sumerian can be viewed with popular headphones like HTC’s Vive, Oculus Rift, Google’s Daydream View, and Apple iPhone and iPad devices.

Amazon aims to respond to the demand of those companies that want to implement Virtual Reality and Augmented Reality technologies for different types of purposes, without the need to have specialized knowledge in it. In addition, this way of simplifying the process would help to generalize the use of this technology and obtain new use cases.

According to AWS Vice President of Technology Marco Argenti, “Companies are interested in testing both technologies for everything from employee training to virtual advisory services, but lack the technical capabilities to make, for example, a Virtual Reality app from scratch. And that’s what Amazon wants to offer them.” He adds that “Anyone who can make a website should be able to make an VR or RA experience.”

Currently you can only use the platform by invitation and some examples of its early customers are the startup Mapbox, Nokia and Thermo Fisher Scientific, manufacturer of medical devices.