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Executive Summary

What’s the state of spatial computing? As we enter a new year, we embark on our annual exercise of defining the sector, its players, events, and trajectory. This year, we ended up with 80+ pages of analysis, compelling us to split it into two parts, rather than edit back to digestible levels. The pages to follow represent Part 1, with Part 2 to follow next month.

As for findings and highlights, the collective grouping of subsectors known as XR continues to push forward and invest tens of billions per year to realize self-centric versions of a spatial future. One byproduct of this process, for example, is mixed reality’s elevated status as a new market standard in VR, thanks to Meta Quest 3 and 3s. Meta isn’t first to market with mixed reality, but it’s combined the modality with the element of affordability. Along with this trend, HD color passthrough cameras broaden VR use cases and utility. They also advance AR, which can piggyback on the more mature and penetrated VR market.

Meanwhile, Ray-Ban Meta Smartglasses (RBMS) set the bar for headworn devices that are supported by AI. Among other advantages, this limits reliance on graphical dimensionality as a selling point. They rather rely on relevant information delivery such as personal
alerts, social signals, shopping & commerce, and real-world object recognition. This utility is met with the style and wearability that’s possible when you sidestep AR optical and display systems.

Then there’s Meta Orion. Though only a working prototype, it has cracked the code on achieving both a visually-robust UX and style/wearability. Now, Meta must spend years cracking another code: marketing an Orion-like product for less than $10,000 – the device’s current per-unit cost. But it has meanwhile demonstrated what’s technically possible in AR today.

Though some believe all the above approaches will someday meet in the middle for an ultimate XR device, we believe they’ll continue to develop along parallel tracks. They’ll be purpose built for varied use cases that map to their strengths – for the same reason you use a laptop and a smartphone, versus trying to do everything on a tablet. This multi-track approach also maximizes Meta’s market opportunity amidst a challenged XR adoption environment.

But it’s not just about Meta. Like Orion, Apple Vision Pro achieves the extent of what’s possible in spatial computing today – albeit a vastly different approach to augmentation. But unlike Orion, Vision Pro is available today, rather than sitting behind locked doors for internal use only. And though Vision Pro’s sales have disappointed, Apple admits that it’s “not a mass market product.” Moreover, Apple is playing a long game with Vision Pro as the first step towards its massive and inherently-advantaged spatial ambitions.

Meanwhile, mobile AR leader Snap continues to make strong moves in headworn AR. Its latest Spectacles raise the bar for commercially-available (though only for developers at this stage) AR glasses. And in a similar device class for optical seethrough AR (definitions are detailed in this report), we continue to see compelling hardware from Xreal. Though it doesn’t achieve dimensional AR like Spectacles and Orion, Xreal nails a simple and relatable use case: virtual private displays for entertainment & gaming.

Google and Samsung have also (re)entered the XR race, and have done so together. Android XR will be first available on Samsung headsets. This could be formidable, given Google’s AI capabilities in Gemini, which are infused in Android XR. Like Apple, Google’s platform position also offers advantages, like bringing tens of thousands of existing Android apps into XR.

Speaking of platforms, it’s not just about devices. With all the above, a spatial stack supports it. This involves a cast of supporting roles like processing (Qualcomm), creation (Adobe), and dev tools (Niantic). And while headworn AR and VR continue to evolve, Mobile AR is here today, available on about 3 billion devices.

Lastly, hanging over all the above are two little letters: AI. On one level, generative AI aids XR experience creation, thus streamlining developer workflows. On another level, it redefines user interfaces and inputs for XR devices ranging from smart glasses to mixed reality headsets. This is already happening.

So how is all of this coming together? What are all these diverging and developing XR device categories? And who’s best positioned in the spatial spectrum? We’ll tackle these questions and others in this report series through numbers and narratives.

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Methodology

This report highlights ARtillery Intelligence viewpoints, gathered from its daily in-depth market coverage. To support narratives, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Sources are linked or attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 20 years in tech-sector research and intelligence. This includes the past 10 years covering AR & VR exclusively, as seen in research reports and daily reporting.

This approach primarily applies a bottom-up forecasting analysis, secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating figures in a disciplined way. More about our methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

Like many research & intelligence firms, one of the things that ARtillery Intelligence does is market sizing. A few times per year, we go into isolation and bury ourselves deep in financial modeling. This exercise takes the insights and observations we accumulate throughout the year and synthesizes them into hard numbers for the current and future spatial computing industry (methodology details here).

In covering spatial computing for eight years, our sector knowledge base and perspective continue to expand. That occurs on several levels, including insight and access to insider information, all of which informs our forecast models and inputs. Further reinforcing that knowledge position, the daily rigors of editorial production at our sister publication AR Insider emboldens our market insights. It also offers an invaluable asset for market-sizing work: access.

Beyond a knowledge position and market-sizing process, the focus of these forecasts likewise continues to evolve. Our first market forecast six years ago examined AR, VR, and all their revenue subsegments (collectively, XR). More recently, we began to produce separate forecasts* for headworn and mobile AR, as well as VR. Though all three share technical underpinnings, their nuanced market dynamics deserve deeper and more focused treatment.

But now the pendulum has swung back in the other direction. In addition to those focused drill-downs into spatial computing subsegments, we’re returning to a comprehensive XR forecast. Why? The idea is to reveal insights about how these interrelated sectors contrast and converge. For example, what’s the market opportunity for supporting tech (e.g., creation platforms) that span AR and VR? And what’s the comparative hardware penetration and device sales outlook across these form factors? This combined XR forecast allows us to tackle such questions.

So what did we find out? Starting at the top, XR revenue will grow from $21.41 billion in 2023 to $41.78 billion in 2028. Among XR form factors, VR leads with $11.02 billion in 2023, followed by mobile AR ($8.53 billion) and headworn AR ($1.86 billion).

Taking these one at a time – in the order of revenue share – VR’s lead is owed to its more established and technologically-mature state, relative to AR. It’s also propelled by Meta’s loss-leader investments to gain early market share and build a network effect. This was accelerated by Quest 3 and its younger sibling, Quest 3s, which both represent a new standard in VR devices that feature high-resolution color passthrough cameras for mixed reality. This broadens AR use cases, utility, and appeal. And the price is right.

Moving on to mobile AR, it has a healthy installed base of hardware, as it piggybacks on global smartphone saturation. But that installed base doesn’t always translate to revenue. For example, consumer spending in mobile AR is relatively low. Though in-app purchases in Pokémon Go are sustaining to some degree, it’s a bit of an outlier as most consumers aren’t paying for AR experiences at this stage. So if not from consumers, where is money being made in mobile AR? The short answer is B2B2C. This involves brand spending to create AR experiences for their customers. It includes AR marketing, commerce enablement, and experience creation software.

On to headworn AR, there continues to be ample anticipation for AR glasses in the tech press and broader culture… but also a looming reality check. Futuristic visions of pervasive all-day glasses hit a wall when considering technological requirements. Not only are they intense – involving nuanced optical and display systems – but they escalate device cost and bulk. This in turn counteracts consumer adoption at scale. The bottom line is that widely-adopted AR glasses are more of a 2035 reality than a 2025 one.

Meanwhile, we see worthwhile movement toward ”lite AR” in terms of stylistically-viable devices like Ray-Ban Meta Smart Glasses (AI-driven audio AR), and Xreal One (lean-back immersive entertainment). At the other end of the experiential spectrum is Apple Vision Pro.* All eyes are on the device due to Apple’s track record in mainstreaming emerging tech through its signature halo effect.

Estimated unit sales are low in early years (223,000 in 2024) due to the device’s price tag. But it could gradually penetrate further, seeing growth curves that mirror slow-start Apple wearables historically. This will happen as it slims down over several generations… in both price and in bulk. This could be joined by Apple smart glasses that are toned down in functionality, device bulk, and price.

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Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 19 years in research and intelligence in tech sectors. This includes the past 9 years covering AR & VR as a primary focus.

This report focuses on revenue projections in various sub-sectors and product areas. ARtillery Intelligence has built financial models that are customized to the specific dynamics and unit economics of each. These include variables like unit sales, company revenues, pricing trends, market trajectory, and several other micro and macro factors that ARtillery Intelligence tracks.

This approach primarily applies a bottom-up forecasting methodology, which is secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating revenues and projections in a disciplined way. More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

It’s that time of year again. As we approach 2025, our annual exercise kicks in: examining the AR & VR events and lessons of the past year and predicting outcomes for the next year. The following pages will do just that… But first, what’s the high-level view of where we are in the spatial computing lifecycle?

AR and VR – collectively known as spatial computing – continue to hold immense potential. Though they don’t represent the imminent tech revolution trumpeted in their circa-2017 hype cycle, they continue to show gradual progress. After a shakeout followed that hype cycle, these sectors then saw another lift that was propelled by the subsequent metaverse hype cycle. Now, after the rise and fall of both these hype cycles – and the distractions that come with them – AR and VR are growing at measured and realistic paces.

But the “spatial spectrum” as we like to call it, deserves more nuanced analysis as there are varying growth curves across AR and VR subsectors. These continue to converge in mixed reality devices like Apple Vision Pro and Quest 3. They also continue to diverge into independent evolutionary paths, including low-immersion smart glasses (lite AR) and high-immersion passthrough AR glasses (heavy AR).

2024 meanwhile saw mixed signals including Microsoft HoloLens’ retreat from the market, and fewer than expected Apple Vision Pros sold. On the positive side were substantive AR advancements such as Snap Spectacles and Meta Orion. And we saw the surprising growth in non-display AI-driven smart glasses such as Ray-Ban Meta Smartglasses. In these and other streamlined AR hardware, AI replaces visuals as the main selling point – a key development.

That brings us to the big topic that defined 2024 inside and outside of the spatial computing realm: AI. Inflections in generative and conversational AI characterize today’s technological momentum. But the question is how AI intersects with XR. A common knee-jerk reaction is that it replaces spatial computing as a source of funding and attention. And that may be true to a degree. However, on more meaningful levels, AI and XR elevate each other. XR can be the face of AI, while AI is the brains of XR. They go together.

This XR/AI convergence isn’t new, as seen in flavors and subsets of XR such as visual search. However, it took on new forms and areas of applicability in 2024. For example, generative AI is being used for 3D asset creation, thus automating and streamlining XR developer workflows. For example, this can be seen in Snap’s GenAI Suite in Lens Studio 5.0.. And on the user end, AI elevates AR experiences such as line of sight intelligence that empowers consumers with deeper situational awareness. This includes multimodal AI from the likes of Ray-Ban Meta Smartglasses, as noted, which engenders a streamlined fusion of visual inputs and audio outputs.

But the story doesn’t end there. The spatial spectrum is broad with several moving parts – many of which evolved in 2024 and are primed for 2025. What will be the impact of Snap Spectacles and Meta Orion? How are smart glasses evolving? And how is mixed reality becoming a new standard in VR? We’ll tackle these questions and more throughout this report.

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Methodology

This report highlights ARtillery Intelligence viewpoints, gathered from its daily in-depth market coverage. To support narratives, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Sources are linked or attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 18 years in tech-sector research and intelligence. This includes the past 8 years covering AR & VR exclusively, as seen in research reports and daily reporting.

This approach primarily applies a bottom-up forecasting analysis, secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating figures in a disciplined way. More about our methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

Back in August, ARtillery Intelligence’s monthly report focused on smart glasses. Given new standards set by Ray-Ban Meta Smartglasses, Xreal Air 2 and others, the device class is seeing demand inflections. Much of this success is built on the principle of “lite AR.”

After a decade of chasing “heavy AR” ambitions, many XR players got realistic about the technology’s shortcomings. They’ve consequently designed today’s best version of the technology, rather than trying and failing to achieve overly-ambitious ends. This meant simple non-interactive visuals… or no visuals at all.

Following that narrative, we now embark upon the next chapter: heavy AR. This is defined by visual AR that understands and interacts with its surroundings in dimensionally-accurate ways, otherwise known as simultaneous localization and mapping (SLAM). These scene-interaction and dimensionality functions are computationally intensive, which makes heavy AR challenging… or “ambitious” as characterized above.

These challenges boil down to design tradeoffs. For example, SLAM requires ample graphical processing, power, and display systems, which collectively amplify device cost and bulk. Those two attributes, in turn, preclude a large segment of the market: consumers.

Though these challenges persist, we’re starting to see notable evolution. In the past quarter alone, hardware from Snap and Meta advanced heavy AR standards. Snap Spectacles offer a dimensional AR experience in a package that – though bulky – is a step closer to something that’s stylistically viable for consumer markets. For now, it’s only available to developers as Snap knows we’re not there yet.

Meanwhile, Meta’s Orion is a glimpse of the future, seen through the extent of AR technical achievement that’s possible today. Though it’s a working prototype for internal development, it demonstrates to the broader public where AR is headed, and what’s possible.

With that contextual backdrop, this report will focus on seethrough AR glasses-based heavy AR. It will do so on mostly business – rather than technical – levels. Where is it today, and where is it headed? What recent market events define that trajectory? And who’s doing what to advance and accelerate the field? We’ll tackle these questions through numbers and narratives, with the end goal – as always – to empower you with a knowledge edge.

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Methodology

This report highlights ARtillery Intelligence viewpoints, gathered from its daily in-depth market coverage. To support narratives, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Sources are linked or attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 18 years in tech-sector research and intelligence. This includes the past 8 years covering AR & VR exclusively, as seen in research reports and daily reporting.

This approach primarily applies a bottom-up forecasting analysis, secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating figures in a disciplined way. More about our methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

Like many research & intelligence firms, one of the things that ARtillery Intelligence does is market sizing. A few times per year, we go into isolation and bury ourselves deep in financial modeling. This takes the insights and observations we accumulate throughout the year and synthesizes them into hard numbers for the current and future spatial computing industry (methodology details here).

In covering spatial computing for eight years, our sector knowledge and perspective continue to expand. That occurs on several levels, including insights and access to insider information, all of which informs our forecast models and inputs. Further reinforcing that knowledge position, the daily rigors of editorial production at our sister publication, AR Insider, embolden our market insights. This also uncovers a steady flow of forecast inputs.

Beyond knowledge position and market-sizing processes, the focus of these forecasts likewise continues to evolve. Our first market forecast six years ago examined AR, VR, and all their revenue subsegments (collectively, XR). More recently, we began to produce separate forecasts for headworn AR, mobile AR, and VR. Though all these areas share technical underpinnings, their nuanced market dynamics deserve deeper and focused treatment.

Accordingly, this report focuses specifically on VR. Specifically, global VR revenue is projected to grow from $11.02 billion in 2023 to $19.75 billion in 2028, a 12.37 percent compound annual growth rate. This leads other XR sectors, such as mobile and headworn AR. Though VR continues to face market challenges and slow-to-moderate growth, it’s the most established of these XR subsegments.

Segmenting the above VR figures, revenue is bisected by consumer and enterprise markets. Though consumer spending is strong – inheriting some demand and market dynamics from the robust gaming industry – enterprise spending has pulled ahead. This is mostly due to VR’s capacity for immersive training, which demonstrates favorable efficacy and efficiency.

Starting with the former, VR’s visceral and experiential qualities elevate muscle memory and informational recall. As for efficiency, VR simulations drive cost reductions versus physical training methodologies, including equipment usage and travel costs to physically interact with training pros and settings. In other words, atoms cost more than bits.

Companies ranging from Coca-Cola to Walmart to Bank of America have realized these advantages and invest heavily in large-scale VR training programs. They’ve validated meaningful savings and greater effectiveness. Consequently, VR training leaders like Strivr and ARuVR monetize the opportunity – which informs the market-sizing throughout this report.

Beyond consumer and enterprise segmentations, VR revenue can be bisected by hardware and software. For several years, hardware had a greater revenue share, as is often the case when new tech sectors emerge. But once a sizable hardware installed base is established, software accelerates and eventually eclipses hardware spend. That happens as software builds on that larger installed base of hardware, and enjoys recurring revenue cycles (think: SaaS), that outpace hardware replacement cycles.

This historical pattern is precisely what we’ve seen in the emerging VR sector. And we are now at the stage when software has eclipsed hardware as a revenue category. In addition to the factors noted above, software spend is lifted by growing areas like game subscriptions (B2C), device management programs (B2B), and LBVR content/game licensing (B2B2C).

Lastly, hanging over all the above is the market acceleration born from Meta’s massive investments. This not only includes tens of billions in R&D but loss-leader pricing in its hardware, such as Quest 3, as it builds towards longer-term goals and a network effect. The result is lower barriers to adoption and benefits to end-users. This is currently VR’s biggest accelerant.

So how do all these principles translate to revenue projections? That’s what we’ll quantify and qualify throughout this report…

Price: $1999

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO. You can also purchase it a la carte.

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Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 18 years in research and intelligence in tech sectors. This includes the past 8 years covering AR & VR as a primary focus.

This report focuses on revenue projections in various sub-sectors and product areas. ARtillery Intelligence has built financial models that are customized to the specific dynamics and unit economics of each. These include variables like unit sales, company revenues, pricing trends, market trajectory, and several other micro and macro factors that ARtillery Intelligence tracks.

This approach primarily applies a bottom-up forecasting methodology, which is secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating revenues and projections in a disciplined way. More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

Smart glasses have seen their ups and downs – from the early excitement around Google Glass, to the the device’s famous flameout. The before-its-time and identity-confused device has since become a cautionary tale and the butt of jokes throughout the AR land. But that cautionary tale ended up serving the market well, leading to the evolutionary point where we now sit. Though there’s still miles to go, the past year has seen a noticeable inflection in excitement, investment, and market reception for smart glasses.

This inflection has involved a few factors. The first factor is that the broader XR world has begun to get more realistic. After spending a decade obsessed with an overly-ambitious vision that achieves graphical richness and wearability, smart glasses are beginning to be self aware that they can’t do both (yet). So we’ve instead seen more narrow, focused, and purpose-built use cases. They contrast the previous standards in hardware like Microsoft HoloLens 2 and Magic Leap 2 – venerable devices in their own right, but lugging do-everything bulk that only works for enterprises.

One example of this focused approach is Xreal Air 2. It’s built for the single purpose of private massive virtual screens for gaming and entertainment. This is not only focused, but it targets a use case that’s relatable and resonant with a large consumer market. Our survey data support that notion.*

The second factor is AI. Its ability to infuse intelligent and personalized assistant functions takes the burden off visuals as a central smart-glasses selling point. The result is experiences whose value lies not in graphical intensity but in the personalization and relevance of the information being delivered. This includes personalized alerts, social signals, and identifying people & things via text and audio. This is more about information than optics. It’s experientially meaningful, even if graphically underpowered.

And without all those optical requirements, smart glasses can achieve erstwhile elusive targets: style and comfort. The device that best applies these principles is Ray-Ban Meta smart glasses. Besides upgraded and well-integrated audio quality and video capture, multimodal AI is a central selling point. It can identify and contextualize real-world objects using visual input and voice output. It doesn’t even have a display system.

All the above boils down to the art of the possible. The device does its best with today’s available tech while offering a bridge to the fully-actualized smart glasses we really want. That end goal includes immersive optics and style in the same package. But until we get there, today’s smart glasses are starting to be honest with themselves about what they can and can’t do. And that honesty is baked into their design – leaning into the best of what’s possible today.

In the meantime, Apple Vision Pro looms over everything, showing what’s possible at the other extent of the UX spectrum. This practically achieves a few things. First, it could popularize immersive streaming and entertainment, thus stimulating demand for more affordable flavors… such as Xreal Air 2.

The second thing Vision Pro achieves is to represent smart glasses’ counterpart at the the other end of the experiential spectrum. That spectrum involves a sliding scale between UX and style/comfort, as noted. The desired outcome is for these two endpoints to someday meet in the middle for the best of both worlds. It will take several years to achieve this, but we’ll see worthwhile technology along the way, including the latest batch of smart glasses.

That’s what we’ll venture to examine in this report, including trend analysis, market projections, and reviews of the most notable devices. The goal, as always, is to empower you with a knowledge edge.

Price: $999

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO. You can also purchase it a la carte.

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Methodology

This report highlights ARtillery Intelligence viewpoints, gathered from its daily in-depth market coverage. To support narratives, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Sources are linked or attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 18 years in tech-sector research and intelligence. This includes the past 8 years covering AR & VR exclusively, as seen in research reports and daily reporting.

This approach primarily applies a bottom-up forecasting analysis, secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating figures in a disciplined way. More about our methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

Most AR and VR commentary focuses on consumer markets. But consumer XR ubiquity is years or even decades away. This timeline is due to the state of the underlying technology and the design challenges in building hardware that’s graphically-robust and stylistically viable. Both factors are needed for consumer markets… yet both can’t be achieved today in a single device. Some innovators sidestep this dilemma with hardware that’s experientially-meaningful without graphical richness, such as Ray-Ban Meta Smartglasses (the topic of an upcoming report).

But while those workarounds and forward steps are being made in the consumer realm, XR finds fertile ground in the enterprise. Among other things, there’s less stylistic resistance in professional settings. More importantly, there’s a clearer business case for enterprise XR, such as productivity gains from line-of-sight guidance, or greater efficacy and efficiency in immersive training. These deployments span industrial settings (e.g., manufacturing) as well as corporate environments (e.g., design collaboration).

Specific use cases include AR visualization to support assembly and maintenance. It can also include visual guidance for IT field support. The idea is that AR’s line-of-sight orientation can make front-line workers more intelligent and empowered. Compared to the mental mapping they do with 2D instructions, visual support boosts effectiveness and safety while lessening cognitive load. And with VR, immersive experiences can boost memory recall and experiential learning in training scenarios across several job types.

In all the above modalities, benefits include speed, accuracy, and safety. These micro efficiencies add up to worthwhile bottom-line impact when implemented at scale. Macro benefits meanwhile include lessening job strain and the “skills gap” – all of which can help enterprises preserve institutional knowledge. But it’s not all good news. Though enterprise XR benefits are valid, several roadblocks stand in their way. These include organizational inertia, politics, bureaucratic systems, security concerns, and fear of new technology throughout a given enterprise.

Sticking with some of those organizational hurdles, the result is often the dreaded “pilot purgatory.” As its name suggests, this is when XR is adopted at the pilot stage, but never progresses to full deployment. It’s one of enterprise AR’s biggest pain points today. Fortunately, there are tactics – most of them involving internal communications and change management rather than technological matters. In other words, sometimes it’s more about HR than XR…

With that backdrop, we continue the ongoing strategic narrative around enterprise XR in this report. This includes original ARtillery Intelligence market-sizing data, as well as new enterprise survey research we’ve assembled from HTC. Moreover, we devote the bulk of this report to “show rather than tell” through case studies that demonstrate enterprise AR’s ROI potential and best practices.

To adequately represent these factors, we’ve reached out to leading enterprise XR players to collect their top case studies. We’ve then relayed these through our own lens and analytical rigor. We’ve prioritized case studies that have quantifiable results, actionable takeaways, and a wide range of business verticals.

The goal in all the above is to reveal the why and how of enterprise XR. Through the lens of industry best practices, why should enterprises invest in XR? And how should it be implemented? The name of the game is to set up enterprise XR to succeed by deploying it from a place of confidence and knowledge.

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Methodology

This report highlights ARtillery Intelligence viewpoints, gathered from its daily in-depth market coverage. To support narratives, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Sources are linked or attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 18 years in tech-sector research and intelligence. This includes the past 8 years covering AR & VR exclusively, as seen in research reports and daily reporting.

This approach primarily applies a bottom-up forecasting analysis, secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating figures in a disciplined way. More about our methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

Like many research & intelligence firms, one of the things that ARtillery Intelligence does is market sizing. A few times per year, we go into isolation and bury ourselves deep in financial modeling. This takes the insights and observations we accumulate throughout the year and synthesizes them into hard numbers for the current and future spatial computing industry (methodology details here).

In covering spatial computing for eight years, our sector knowledge and perspective continue to expand. That occurs on several levels, including insights and access to insider information, all of which informs our forecast models and inputs. Further reinforcing that knowledge position, the daily rigors of editorial production at our sister publication, AR Insider, embolden our market insights. This also uncovers a steady flow of forecast inputs.

Beyond knowledge position and market-sizing processes, the focus of these forecasts likewise continues to evolve. Our first market forecast six years ago examined AR, VR, and all their revenue subsegments (collectively, XR). More recently, we began to produce separate forecasts for headworn AR, mobile AR, and VR. Though all these areas share technical underpinnings, their nuanced market dynamics deserve deeper and focused treatment.

Accordingly, this report focuses specifically on headworn AR. Given its unique dynamics – in both technology and user adoption patterns – it compels its own focused analysis. This allows us to go deeper into key revenue sources like consumer (B2C), enterprise (B2B) and AR-enablement software (B2B2C). We did the same earlier this year for mobile AR.

Headworn AR revenue is projected to grow from $1.86 billion in 2023 to $5.34 billion in 2028, a 23.52 percent compound annual growth rate. This trails other XR sectors we track, such as mobile AR and VR, as they’re at more advanced stages. Though headworn formats represent AR’s endgame, they’re underdeveloped today, due to highly-advanced underlying tech.

Meanwhile, there’s ample anticipation for AR glasses in the tech press and broader culture… but also a looming reality check. Futuristic visions of all-day AR glasses hit a wall given technological requirements. Not only are these needs intense – involving nuanced optical and display systems – but stylistic viability adds another layer of complexity. AR glasses’ ubiquity is more of a 2030 reality than a 2024 one. But if anything could accelerate that, it’s immense R&D spending from Apple, Meta, and others.

Zeroing in on the most influential of these players, Apple will advance AR adoption with its “halo effect,” flowing from Vision Pro. Its market impact will take several years, due to its price, but it will be influential in bringing AR to a broader segment of enterprises and consumers (in that order). Meanwhile, a new class of low-immersion smart glasses – such as Meta Ray Ban Smartglasses – shows what can be done by leaning on AI as opposed visuals and holography.

As all of the above consumer endpoints materialize, headworn AR has already found traction by helping industrial and corporate enterprises boost productivity. For example, it helps IT services field reps operate with greater speed and effectiveness through line-of-sight guidance and remote support.

Speaking of enterprise adoption, it not only happens in a B2B sense but with B2B2C. We’re talking consumer endpoints such as games, entertainment, marketing, and commerce. The technology to create and support these functions is bought by developers and brands who lean into AR as an interactive touchpoint with their customers or marketing targets. This principle is playing out in mobile AR, such as branded AR lenses, but will follow in headworn AR as the field evolves.

This progression will take a while due to low headworn AR hardware penetration, but we’ll prepare for such market opportunities by beginning to project B2B2C spending in this forecast. With evolving AR hardware from Apple, Meta, and others, B2B2C revenue models could develop in the next few years.

So how do all these principles translate to revenue projections? That’s what we’ll quantify and qualify throughout this report…

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Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 18 years in research and intelligence in tech sectors. This includes the past 8 years covering AR & VR as a primary focus.

This report focuses on revenue projections in various sub-sectors and product areas. ARtillery Intelligence has built financial models that are customized to the specific dynamics and unit economics of each. These include variables like unit sales, company revenues, pricing trends, market trajectory, and several other micro and macro factors that ARtillery Intelligence tracks.

This approach primarily applies a bottom-up forecasting methodology, which is secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating revenues and projections in a disciplined way. More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

How do consumers feel about mobile AR? Who’s using it? How often? And what do they want to see next? Perhaps more importantly, what are non-users’ reasons for disinterest? And how should app developers build mobile AR experiences accordingly?

These are the questions we set out to answer. Working closely with Thrive Analytics, ARtillery Intelligence wrote questions to be fielded to more than 52,325 U.S. adults through Thrive’s established consumer survey engine. As the eighth wave of this mobile AR research, the results are in and we’ve synthesized the takeaways throughout this report.

This follows several ARtillery Intelligence monthly reports that examine various segments of, and developing use cases for, consumer AR experiences that happen on smartphones. Now a deeper view into consumer usage and attitudes validates those narratives while providing new dimension into mobile AR strategies and opportunities.

So what did we find out? At a high level, mobile AR usage has grown to 35 percent of U.S. adults. Many of these users experience AR through apps, such as those built on Apple’s ARKit and Google’s ARCore. But there’s greater engagement with lower-friction experiences such as “AR-as-a-feature.”

Mobile AR users also appear active and engaged, with 46 percent reporting that they use it at least weekly. The top app category is gaming, which we attribute to Pokémon Go’s sustained traction, even after it has gone a bit quiet in terms of press attention. But other categories such as AR shopping, social interaction, and visual search continue to make headway.

Beyond the positive results and demand signals outlined on the previous page, there are negative signs and areas for improvement. For example, mobile AR non-users report low likelihood of adopting, and an explicit lack of interest in the technology.

This disparity between current-user satisfaction and non-user disinterest continues to underscore a key challenge for AR: you need to experience it to see its benefits. But there’s little motivation for non-users to do so. This creates a classic “chicken & egg” dilemma that represents a core marketing challenge for AR.

Put another way, AR’s highly-visual and immersive format is a double-edged sword. It can create strong affinities and high engagement levels. But the visceral nature of its experience can’t be communicated to prospective users through traditional marketing, such as ad copy or even video.

The same chicken & egg challenge was uncovered in the corresponding VR consumer research that we published last month. This makes it a common challenge for immersive tech, though mobile AR is relatively advantaged by smartphone ubiquity. Still, it will take time and acclimation before AR reaches a more meaningful share of the population.

Meanwhile, there are strategies to accelerate that process and to build AR apps that align with consumer affinities. And these strategies will be a moving target as AR evolves from mobile – the predominant form factor today – to its endgame: headworn. We will end this report with data that quantify the early stages of this transition from handheld to headworn AR.

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Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 18 years in research and intelligence in tech sectors. This includes the past 8 years covering AR & VR as a primary focus.

ARtillery Intelligence has partnered with Thrive Analytics by writing the questions for the Virtual Reality Monitor consumer survey. These questions were fielded to more than 52,000 U.S. Adults. ARtillery Intelligence wrote this report, containing its insights and viewpoints on the survey results.

For market sizing and analysis, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 18 years in research and intelligence in the tech sector. This includes the past 8 years covering AR & VR exclusively, as seen in research and daily reporting.

Thrive Analytics likewise follows best practices in consumer research, developed over its long tenure as a consumer research firm. More details about the survey sample can be seen in this report’s introduction and more on ARtillery Intelligence research methodology can be read here.

More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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Executive Summary

How do consumers feel about VR? Who’s using it? How often? And what do they want to see next? Perhaps more importantly, what are non-users’ feelings about the technology? What are their reasons for disinterest? And how can VR software and hardware developers optimize products accordingly?

These are questions we set out to answer. Working closely with survey research specialist Thrive Analytics, ARtillery Intelligence wrote questions to be fielded to 52,317 U.S. adults through Thrive’s established consumer survey engine. The results are in and we’ve analyzed the takeaways in this report.

This follows similar reports we’ve completed over the past eight years, including a corresponding consumer AR survey. Wave 8 of the research now emboldens our perspective and brings new insights and trends to light. All eight waves represent a significant sample of U.S. adults for robust longitudinal analysis. This will continue to expand with each survey wave.

So what did we find out? At a high level, 25 percent of U.S. adults own or have used a VR headset, which is the same amount reported in the previous survey wave. Though this is flat growth – which is supported by our separate VR market sizing that shows a soft VR market over the past year – there are several signs that things will pick up in the coming year.

Those signs include the emergence of mixed reality in VR. As seen in market-defining hardware such as Meta Quest 3, this involves high-definition color passthrough cameras that enable experiences that interact with the real world – or simply engender comfort, orientation, and spatial awareness in VR. This survey was fielded prior to Quest 3’s launch, but it will be something to watch going forward.

The same can be said for Apple Vision Pro. Though it’s a device we characterize in the AR hardware category, the lines are blurring, and it will have an impact on stimulating mixed reality demand, congruent with Apple’s signature “halo effect.”

But beyond those positive and optimistic signals, there continue to be challenges and adoption headwinds in VR. It hasn’t been the world-changing and revolutionary technology it was touted to be in the industry’s circa-2016 hype cycle. Since then, it has been healthy in its own right, but far narrower in its consumer adoption than proponents had hoped.

The cause of those adoption challenges is signaled in these survey results. As we’ll explore in this report, only 26 percent of respondents say that they want to try the technology. Though this is up six points from the previous survey wave – supporting VR’s near-future growth as noted on the previous page – bad news lies in the reasons for disinterest. Specifically, 82 percent of those uninterested respondents say that they’re “just not interested.” This definitive and deflating statement signals that VR proponents have their work cut out for them in converting non-users.

Moreover, the disparity between current-user satisfaction and non-user disinterest underscores a key “chicken & egg” dilemma for VR. To reach high satisfaction levels, VR must first be tried. Yet non-users, per the above, have little interest in trying it. Altogether, this presents a sizable marketing challenge for VR players and proponents to push that first taste.

But if anything is going to bring that interest to mainstream markets, it’s the aggressive pricing and quality of Meta devices. In an effort to gain an early market share lead and a network effect, Meta subsidizes its hardware to the point of deflating its own margins. The good news for consumers is that they get quality VR hardware that’s much more affordable than it should be.These factors continue to attract users, which then attract developers. As game & app libraries build in this way, a virtuous cycle – or self-propelling flywheel effect – drives the VR market forward. This is the path to VR growth. But to be clear, it has been – and will continue to be – a gradual climb. This can be seen in the live market evidence that surrounds us, further supported in the results of this survey research.

Price: $999

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO (Startup tier or higher for forecast access). You can also purchase it a la carte.

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Companion Video

Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 20 years in research and intelligence in tech sectors. This includes the past 8 years covering AR & VR as a primary focus.

ARtillery Intelligence has partnered with Thrive Analytics by writing the questions for the Virtual Reality Monitor consumer survey. These questions were fielded to more than 52,000 U.S. Adults. ARtillery Intelligence wrote this report, containing its insights and viewpoints on the survey results.

For market sizing and analysis, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 18 years in research and intelligence in the tech sector. This includes the past 8 years covering AR & VR exclusively, as seen in research and daily reporting.

Thrive Analytics likewise follows best practices in consumer research, developed over its long tenure as a consumer research firm. More details about the survey sample can be seen in this report’s introduction, and more on ARtillery Intelligence research methodology can be read here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.

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