SCOTTSDALE, Ariz., April 28, 2016 /PRNewswire/ -- ABI Research, the leader in transformative technology innovation market intelligence, forecasts Augmented Reality (AR) smart glasses to create US$46 billion in revenues in 2021, while virtual reality (VR) headsets will generate about US$15 billion. Some use cases deviate, but primarily, AR is an enterprise play and VR is in the consumer space. AR smart glasses shipments will hit 27 million by the same year, with the industrial, healthcare, and government and military verticals driving the most growth.

The total AR market is looking equally strong, with US$115 billion in revenues split among software, hardware, advertising, and other categories. Virtual Reality (VR) devices will be responsible for US$15 billion by 2021, with mobile virtual reality devices leading in shipments with 67 million. The mobile VR market continues to see early growth and adoption due to low average sale prices (ASPs) and better device accessibility.

High average sales prices on AR devices sees the consumer-targeted market segment struggling. Device manufacturers will need to keep ASPs low to see significant consumer shipments, and developers will need to adjust to the limited capabilities of lower cost devices.

"While AR smart glasses will see a greater growth rate than mobile VR devices, this does not imply that the VR market is lagging," says Eric Abbruzzese, Senior Analyst at ABI Research. "It is only settling as Google Cardboard's strong start tapers off and higher quality AR devices begin to drop in price. Despite recent advances, both the AR and VR markets have challenges to overcome in the months ahead."

Tethered VR devices are positioning 2016 as the launching point for VR, with the Oculus Rift, HTC Vive, and Sony's PlayStation VR (PSVR) all launching this year. Specifically, PSVR's holiday 2016 launch will help VR devices infiltrate the console market, although high prices and upfront external hardware requirements will limit this growth potential in both console and PC markets to a small audience. The segment will need to expand beyond the niche, high-end gaming audience to sustain development.

"Despite excitement this year in the gaming sector, the strongest opportunities lie in AR for enterprise use, allowing companies to focus on solving the efficiency challenges of the workplace and finding ways to leverage the technologies to improve experiential businesses, such as in retail and entertainment," concludes Abbruzzese. "While VR offers an immersive and revolutionary way to consume content, the target market is still relatively niche; efficiency, safety, and productivity are pillars throughout enterprise, however, and AR will continue to push the opportunities in these categories further."

These findings are part of ABI Research's Augmented Reality and Virtual Reality Service (https://www.abiresearch.com/market-research/service/augmented-reality-virtual-reality/), which includes research reports, market data, insights, and competitive assessments.

About ABI Research

For more than 25 years, ABI Research has stood at the forefront of technology market intelligence, partnering with innovative business leaders to implement informed, transformative technology decisions. The company employs a global team of senior analysts to provide comprehensive research and consulting services through deep quantitative forecasts, qualitative analyses and teardown services. An industry pioneer, ABI Research is proactive in its approach, frequently uncovering ground-breaking business cycles ahead of the curve and publishing research 18 to 36 months in advance of other organizations. In all, the company covers more than 60 services, spanning 11 technology sectors. For more information, visit www.abiresearch.com.

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