Augmented Reality (AR) and Virtual Reality (VR) in Manufacturing Market

Augmented Reality (AR) and Virtual Reality (VR) are technologies that provide a 360-degree immersive experience in a simulated environment and are powered by analytical insights. Manufacturers have increasingly adopted augmented reality and virtual reality (AR/VR) devices for simulative applications, and their use for plant improvement and workforce training has fueled industry growth. Recent advances in AR and VR image and sound capture technologies, as well as the availability of compatible electronic products such as tablets and headsets, have created significant market opportunities.

For example, Microsoft launched its HoloLens 2 mixed reality headset in India in January 2022, allowing users to interact with holograms more realistically. The application of industrial robots, which can detect errors and provide real-time virtual support, has also increased demand for AR and VR technologies in manufacturing. Adoption of AR and VR can also help organizations reduce R&,D costs and re-allocate resources for improved outputs, particularly in the context of the Covid-19 pandemic.

The combination of VR, AR, and MR is expected to improve interactive experiences, and the supply of new AR, VR, and MR products is expected to grow the market. The adoption of these technologies in the context of the Fourth Industrial Revolution is driving this trend.

Segments Analysis

Component Analysis

The hardware segment generated the most revenue in 2022, accounting for more than 56% of the market, and is expected to maintain its dominance throughout the forecast period. The increasing adoption of AR and VR devices across various industries is attributed to the growth of the hardware segment. Furthermore, technological advancements, networking, and connectivity improvements are expected to drive market demand for AR and VR headsets.

The services sector, on the other hand, is expected to grow at the fastest compound annual growth rate (CAGR) of 31.2% during the forecast period. This expansion is primarily due to an increase in immersive technology-related consulting and service offerings, such as maintenance, training, and security services, which are expected to grow further in the future.

The services segment is a new market, and several companies involved in augmented and virtual reality technology are investing in service firms. For example, in February 2022, ESI Group and CIMPA announced a collaboration to provide manufacturers with integrated VR solutions that integrate with existing product lifecycle management processes.

Technology Analysis

The augmented reality (AR) technology sector had the highest revenue share in 2022, accounting for more than 71.5%, owing to manufacturers', preference for AR technology, which allows them to access both manual and automated data at the same time. This expansion is also attributed to the use of augmented reality technology for production training, improving process efficiency, and improving employee well-being, resulting in an increase in the AR in manufacturing market. Furthermore, the use of augmented reality for maintenance in manufacturing plants is boosting industry growth.

From 2023 to 2031, the virtual reality technology sector is expected to have the highest CAGR of 32%. This expansion can be attributed to the widespread adoption of virtual reality, as well as the growing popularity of industrial IoT, industrial robots, and smart factories, which have created a primary platform for VR applications in the manufacturing industry. The ability of VR to provide a 360-degree content view experience in a highly immersive environment during modern production presents numerous market growth opportunities.

Device Analysis

The head-mounted display (HMD) segment will account for more than 61% of total revenue in 2022, owing to rising demand for HMD devices and smart glasses for enterprise and industrial applications. Because of the use of HMDs for product improvement, this trend is expected to continue throughout the forecast period.

The handheld devices segment, on the other hand, is expected to grow at the fastest compound annual growth rate (CAGR) of 30.3% from 2023 to 2031. This expansion is being driven by an increase in demand for high-quality immersive technology. Handheld AR and VR devices allow users to experience technological advancements without having to wear devices on their heads or sit near a display terminal. The growing popularity and user base of handheld devices is expected to drive market demand even higher.

Application Analysis

The product design and development segment accounted for over 52% of total revenue in 2022 and is expected to continue dominating the market during the forecast period. Manufacturers have increased market competition by incorporating AR and VR technologies into product creation and development. As a result, the ease of use of AR and VR technologies for product design and development drives market growth.

Over the forecast period, the safety and training segment is expected to grow at a lucrative CAGR of 29.1%. The demand for efficient enterprise maintenance and repair tools across companies drives the maintenance and repair sector. AR and VR in security and training are gaining traction as advanced technologies are being integrated into training programmes.

Regional Analysis

North America had the largest revenue share of more than 37% in 2022 and is expected to grow during the forecast period. Because of the growing adoption of industrial revolution 4.0 in the manufacturing market, the United States contributed the most to this share.

Meanwhile, Asia Pacific is expected to be the fastest-growing region from 2023 to 2031, with a CAGR of 33.2%. In 2022, Japan and China held a significant share of the Asia Pacific market, and the region',s continued rollout of 5G networks is expected to accelerate the adoption of AR and VR technologies in the manufacturing sector.

Competitive Landscape

competitor analysis on the augmented reality (AR) and virtual reality (VR) in manufacturing market involves identifying and evaluating the strengths and weaknesses of other companies in the same industry. Here are some of the top competitors in the AR and VR in manufacturing market:

Key Market Players

• Microsoft Corporation

• Google LLC

• Samsung Group

• Vuzix Corporation

• SkillReal

• Ediiie

• EON Realty, Inc.

• Kaon Interactive Inc.

• Worldviz, Inc.

• SoluLab

• ESI Group