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Augmented Reality (AR) Market Size, Share & COVID-19 Impact Analysis, By Component (Hardware, and Software), By Device Type (Head Mounted Display, Heads Up Display, Handheld Devices, Stationary AR Systems, Smart Glasses, Others), By Industry (Gaming, Media & Entertainment, Automotive, Retail, Healthcare, Education, Manufacturing, and Others), and Regional Forecast, 2021-2028

Region : Global | Format: PDF | Report ID: FBI102553



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The global augmented reality market size was USD 4.16 billion in 2020 and is projected to grow from USD 6.12 billion in 2021 to USD 97.76 billion in 2028, exhibiting a CAGR of 48.6% in the 2021-2028 period. Based on our analysis, the global market exhibited a significant growth of 46.8% in 2020 compared to the average year-on-year growth during 2017-2019. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a slightly negative impact on demand across all regions amid the pandemic. The rise in CAGR is attributable to demand and growth of the market, returning to pre-pandemic levels once the pandemic is over.

 The scope of study considered hardware and software provided by key players such as PTC Inc., Google LLC, and RealWear, Inc. players such as PTC Inc. provide various product offerings in this market, namely Vuforia AR, Vuforia Studio, Vuforia Expert Capture, Vuforia Instruct, Vuforia Spatial Toolbox. Similarly, Google LLC offers ARCore, an AR platform that provides cloud anchors, environmental HDR, and depth of digital objects.

Augmented reality offers interactive experiences through multiple sensory modalities, including haptic, auditory, visual, somatosensory, and more. The technology has a wide range of applications in entertainment, training, and educational areas. Industries such as manufacturing, healthcare, logistics, among others, are more focusing on adopting this technology for training, maintenance, assistance, and monitoring. Increasing adoption of smartphones and integration of apps is expected to boost the market growth in the near future. The increasing collaboration of the market players with the 5G providers to reduce latency issue is likely to fuel market growth. For instance, in February 2021, Qualcomm announced a collaboration with Bharti Airtel to demonstrate 5G and lower latency issues.

  • Similarly, in July 2021, Samsung Electronics America Inc. partnered with GBL Systems Corporation to deploy 5G testbeds for augmented reality at U.S. Army military bases. This partnership will help the U.S. Army in mission planning and training.

COVID-19 Impact

AR-based Remote Assistance Across Industries to Boost Market Growth During COVID-19

The COVID-19 pandemic has severely impacted global industries. It has resulted in restricted traveling, social distancing, fewer on-site staff, lack of training tools, and much more. However, this technology can offer massive support during a crisis and fuel the market potential. According to IBM’s U.S. Retail Index report of 2020, the retail businesses and their customers have shifted to digital shopping during the pandemic. For instance, brands like IKEA, Home Depot, Louis Vuitton, and Gucci, and more implemented AR to offer virtual “try-before-you-buy” experiences. Similarly, as per Shopify, products with AR content interaction gained 94% conversion compared with those without technological assistance during the crisis.

Similarly, in industries, the on-site laborers can get supervised expertise from the engineer working from home to rectify faulty machines and more. For instance, to assist the on-site worker during the pandemic crises, PTC Inc. provided an AR remote assistance solution named Vuforia Chalk for free of cost. The software offers safety during production and maintenance work. Similarly, the U.K.-based hospitals implemented augmented and virtual reality-based platform Virti to deal with mental health and support training during the pandemic. Thus, during the pandemic, the demand for AR software witnessed significant growth.

  • For instance, in March 2020, PTC, Inc. partnered with Microsoft Corporation to build rapidly manufactured ventilators systems (RMVS) and capture the crucial assembly steps. This partnership will be carried out using PTS’s Vuforia Expert Technology augmented reality (A.R.) technology and Microsoft’s HoloLens and will further help in avoiding the potential transmission of COVID-19.


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Increasing Demand for Enhanced Customer Experience to Propel Augmented Reality Market Growth

In today’s world, maintaining customer relationships has become the most important factor for business expansion. The decreasing number of loyal customers and fast switching between products and services demand innovative customer engagement solutions. Many companies are experimenting with AR to create a long-lasting impression on their customers as it offers a personalized and interactive experience that helps maintain enriched customer satisfaction. For instance, as per the Virgin Holiday study 2018, the company’s AR-powered emails campaign witnessed a 75% and 40% increase in click-through ratio and email rates, respectively. According to a white paper by Infosys, the brands offering customized products are witnessing six to ten times higher growth in revenue generation. Thus, the technology can vastly support marketers to provide a personalized customer experience. 

Additionally, the technology can offer online customer support systems, where the customers can see and interact with agents as they visit a store. For instance, in April 2018, a coffee processing company, Nespresso, integrated AR capabilities in its coffee machine to provide step-by-step instruction. This factor is expected to provide a seamless experience to the customers. Thus, the adoption of this technology is increasingly catering to deliver better customer experiences.

  • For instance, in July 2021, Matterport, Inc. partnered with PTC. Inc. to enable the customer to create an AR experience for large spaces. With PTC’s augmented reality software Vuforia Studio and Vuforia Engine, customers can enrich digital twin captured with Matterport platform with AR experience called Area Targets.


Increasing Adoption of AR Technology in Healthcare Industry to Drive Market

The healthcare industry is witnessing the rising adoption of immersive technologies to support healthcare workers. The technology provides a real and virtual environment that helps in performing tasks efficiently. The increasing availability, accessibility, and affordability of devices boost its adoption across the industry and patients. Earlier, with the limited information, conducting complex surgeries was exhausting. However, with AR adoption, the potential risk in surgeries is reduced, as the technology offers real-time alerts to the surgeons.  In 2020, hospitals across the globe adopted AR devices such as Hololens for tracing and aiding patients amid coronavirus pandemic.

Similarly, the technology offers the capability of interactive and engaging medical learning experiences. For instance, in 2017, LV Prasad Eye Institute collaborated with Microsoft HoloLens to develop a learning app Holo Eye Anatomy. The app helps medical students to learn eye anatomy with a 3D effect using Microsoft’s ARHoloLens. Thus, increasing application across the healthcare industry is likely to drive the market growth.

  • For instance, in February 2019, Microsoft Corporation partnered with Royal Philips to develop an augmented reality concept for image-guided invasive surgeries. This concept will be undertaken using Microsoft’s HoloLens 2 and Philip’s Azurion image-guided therapy platform.


Long Term Impacts of AR on Mental Health May Impede Growth

The users of the technology are facing issues owing to the excessive usage of smart devices. According to a Stanford University research report, users react to the immersive environment the same way as the physical environment, which affects their psychology and behavior. The study can cause an extreme case of post-traumatic stress disorder for some users. Similarly, wearing the devices can affect the user’s ability to interact socially, leading to loneliness and depression. Thus, the rising concerns regarding the impact of excessive AR usage on users are likely to hamper market growth.


By Component Analysis

Rising AR Device Applications to Boost Hardware Segment Growth

Based on components, the market is categorized into hardware and software. The hardware is expected to lead the market. The increasing demand and application of AR devices across industries are boosting hardware growth. Companies such as Apple Inc., Google LLC, and Microsoft Corporation in developing advanced products using this technology.

The software is likely to witness rapid growth during the forecast period owing to the rising demand for apps. The rising adoption of smartphones is boosting this segment. Also, the companies are focusing on integrating AR software with tablets, smartphones, and computers to offer real-time interactive solutions, further boosting the market.

By Devices Type Analysis

Increasing Adoption of Head Mounted Devices to Propel Market Growth

Based on device type, the market is categorized into heads up display, handheld devices, stationary AR systems, smart glasses, and others. The heads up display is expected to gain maximum market share during the forecast period. The adoption of the heads up display is increasing in the automotive industry. The increasing implementation of advanced driver assistance systems (ADAS) in cars is boosting the growth of this segment. Also, the vast presence of AR-based mobile games is fueling market growth.

The smart glasses segment is expected to gain traction due to its increasing application across manufacturing, logistics, and operations. It offers hands-on experiences and guidance to the workers. For instance, in 2017, to boost productivity, General Electric adopted smart glasses for its factories. The company witnessed a 34% jump in productivity at its plant after the adoption of smart glasses. Similarly, various companies are investing in the research and development of smart glasses. As per the augmented reality market forecast, this factor is likely to boost the market in the upcoming years.

  • For instance, in April 2021, Audi launched an augmented reality heads up display in the Audi Q4 e-tron and Q4 Sportback e-tron. The heads up display provides information via the windshield, allows the driver to quickly understand the display, and helps in poor visibility conditions.

By Industry Analysis

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Gaming and Media & Entertainment Industry to Lead the Market

The industries covered in the market are gaming, media & entertainment, automotive, retail, healthcare, education, manufacturing, and others. AR plays a vital role in boosting the gaming industry. The technology offers an immersive and interactive experience that is likely to raise its adoption in the gaming industry. With Pokemon Go's success, the gaming companies extensively expanded the technology for its other games and applications.

The technology offers vast scope to the media and entertainment industry for providing real-time experiences. For instance, in November 2019, Samsung Electronics launched Samsung TV True Fit with an AR mobile application. This factor is expected to drastically change the experience for the customers in gaming, shopping, entertainment, AR-based journalism, and more. Additionally, AR offers a promising role in the retail industry. Its ability to provide the customers' details of any product and services through smartphones with a 3D effect is likely to fuel the market growth. Also, the AR-based gamification trend is gaining traction in the e-commerce and retail industry.

Healthcare is also witnessing the increasing demand for technology, as it aids surgeries and patient treatment. As per the augmented reality market analysis, the growing demand for assistance and monitoring the information in real-time is boosting the adoption of the technology in the industry.


North America Augmented Reality Market Size, 2020 (USD Billion)

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Geographically, the market is fragmented into five major regions, including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

North America is expected to gain maximum revenue share during the forecast period. Rising investments in immersive technologies are boosting the demand for the technology in the region. Similarly, the U.S. government is keen on boosting the adoption of immersive technologies, strengthening the region’s hold on the augmented reality market share. For instance, in 2019, U.S. Defense Advanced Research Projects Agency showed interest in IMT Atlantique and contacted the company to develop similar smart contactless lenses for the U.S. military.

Asia Pacific is expected to show rapid growth during the forecast period. The booming automotive, manufacturing, logistic, and gaming industries are likely to fuel the regional market growth. China is expected to dominate the market owing to the presence of low-cost hardware manufacturers. India is also anticipated to offer growth opportunities for the market due to increasing demand from consumers.

  • For instance, in June 2021, Livestream Technologies expanded its investment in Japan, supporting the growing customer base APAC region. Since 2019, augmented reality user’s growth over 300% in Japan.

Europe has vast potential to boost the market. According to the Ecorys VR Report, the European production value for AR/VR is expected to reach USD 40 billion by 2020. The U.K. is expected to lead the market due to the presence of numerous AR/VR companies.

  • For instance, in October 2020, Livestream Technologies provided remote expert augmented reality solutions to Renault Trucks. This factor will increase productivity & uptime and will further provide remote support services for the dealerships across U.K. and Ireland.

Latin America is expected to grow steadily owing to the collaborations and partnerships with US-based companies. For instance, in October 2020, Brazil’s cosmetic company, Grupo Boticário, collaborated with Vuzix Corporation to deploy AR smart glasses at its manufacturing unit.

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The Middle East & Africa is likely to gain traction in the forthcoming years. The implementation of the technology across learning, travel & tourism, media & entertainment, healthcare, and other industries is expected to boost the market. For instance, in September 2020, Kellogg Company collaborated with Blippar for its product launch campaign across GCC countries. With new WebAr technology, the company aims to interact with customers and open new market opportunities.


VR Companies Are Converging on the AR Technology and Smart Glasses

The companies in the global market are receiving huge funds and investments across the globe. Companies such as Facebook and Google are acquiring start-ups in the market to gain expertise. Similarly, companies such as Microsoft Corporation, Vuzix Corporation, and Qualcomm Technologies, Inc., among others, are collaborating with different industries to expand their businesses. Apple is aiming to develop smart glasses similar to Google LLC. The company offers technology apps such as ARKit for developers to build augmented solutions.

June 2020 – Apple Inc. announced new updates in its ARKit 4. The company updated the app with LiDAR Scanner depth API, location anchors, and expanded face tracking support using AR capabilities. The users can experience the videos and pictures in the immersive environment.

March 2020 – Apple Inc. announced a partnership with Dent Reality. The partnership aims to offer AR-based indoor apps and navigation solutions. It is the only official partner of Apple in Indoor Maps documentation.

List of the Key Companies Profiled:


  • June 2020 – Microsoft Corporation collaborated with the UK-based company Dimension. The partnership aims to provide a mixed reality immersive experience using extended reality content, digital humans, augmented and virtual reality technology, and Microsoft HoloLens.

  • February 2020 – Qualcomm Technologies, Inc. announced an extended reality headset based on the Qualcomm Snapdragon XR2 Platform. It will support the customer and enterprises with premium quality augmented, virtual, and mixed reality devices.

  • June 2021 – Magic Leap Inc. partnered with AMD to semi-custom visual computing and enterprise-class AR devices. This partnership will allow enterprises to transform and re-imagine how information and virtual content are merged and visualized in the real world.


An Infographic Representation of Augmented Reality (AR) Market

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The market report highlights leading regions worldwide to offer a better understanding to the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.




Study Period


Base Year


Estimated Year


Forecast Period


Historical Period



Value (USD billion)


Component, Device Type, Industry, and Geography

By Component

  • Hardware

  • Software

By Device Type

  • Head Mounted Display

  • Heads up Display

  • Hand-Held Devices

  • Stationary AR systems

  • Smart Glasses

  • Others

By Industry

  • Gaming

  • Media & Entertainment

  • Automotive

  • Retail

  • Healthcare

  • Education

  • Manufacturing

  • Others

By Region

  • North America

    • U.S. (By Industry)

    • Canada (By Industry)

  • Europe

    • U.K. (By Industry)

    • Germany (By Industry)

    • France (By Industry)

    • Scandinavia (By Application

    • Rest of Europe

  • Asia Pacific

    • China (By Industry)

    • Japan (By Industry)

    • India (By Industry)

    • Southeast Asia (By Industry)

    • Rest of Asia Pacific

  • The Middle East & Africa

    • GCC (By Industry)

    • South Africa (By Industry)

    • Rest of the Middle East & Africa

  • Latin America

    • Brazil (By Industry)

    • Mexico (By Industry)

    • Argentina (By Industry)

    • Rest of Latin America

Frequently Asked Questions

The market is projected to reach USD 97.76 billion by 2028.

In 2020, the market size was USD 4.16 billion.

The hardware is likely to lead the market.

The increasing adoption of AR technology across the healthcare industry is driving the market growth.

Microsoft Corporation, Apple, Inc., Samsung Electronics Co. Ltd., Upskills.io, Vuzix Corporation, Facebook, Inc., and Google LLC are the top players in the market.

North America is expected to hold the highest market share.

Smart glasses are expected to grow at the highest CAGR.

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