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Once seen as a technology waiting for an application, virtual reality (VR) has grown in importance in commercial sectors thanks to the availability of 5G networks enabling high-end mobile video.
This commercial use is growing the VR market at a 45.7% compound annual growth rate (CAGR) from 2019 to 2024, finds a study from ABI Research.
If realised, this would mean that the VR market would surpass $24.5bn in revenues by 2024, according to ABI’s Virtual reality market data: devices, verticals and value chain report.
The report suggests that standalone VR will be the main driver of this growth, expected to account for over 70% of shipments by 2024, as it finds the optimal balance between price, performance and ease of setup.
Drilling down into what technologies were driving the market, ABI found that the successful launch of Oculus Quest head-mounted display (HMD) in 2019 highlighted the capability of six degrees of freedom (6DoF) standalone VR solutions to replicate more immersive experiences of tethered systems while remaining portable. This, said ABI, was a key attribute for the commercial and enterprise markets where applications such as training are gaining traction and acceptance.
Assessing the potential segments in terms of their value, ABI calculated that by revenue, the commercial and enterprise markets are expected to eclipse the consumer segment by 2021, with healthcare; retail; architecture, engineering and construction (AEC); education; and location-based VR seeing early traction and expected to continue pushing this market forward.
The analyst believes that while VR has yet to live up to its early expectations, there was positive momentum and strong activity beyond the mainstream’s vision, said ABI research principal analyst Michael Inouye.
“VR had a less than stellar start, and while it’s still a long-time horizon, some of the building blocks have solidified, affording VR the time it needs to reach its potential across verticals,” he said.
“Training and 3D visualisation are the most common use cases, but other applications like virtual meetings and productivity will become increasingly common as hardware and platforms improve and evolve.
“Overall, 2019 was a mixed bag for VR, but the good [parts] were solid steps forward. Some highs from new products like Oculus Quest and Rift S, HTC Vive Cosmos, Valve Index, and Varjo’s impressive enterprise HMDs, came along with some new lows, like Google ending development of Daydream and open-sourcing Cardboard, which leaves this segment in a bleak situation. But HMD viewers could, in time, help bring this segment back from the brink.”
ABI called standalone VR a standout technology that is shaping up well, addressing many of the early issues and meeting early expectations. This bodes well for both the consumer and enterprise markets, it added, with take up certain to come as 5G networks proliferate in the major markets worldwide.
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