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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 below).

Our latest forecasting endeavor covers the spatial spectrum, otherwise known as XR. Spanning AR (mobile & headworn) and VR, this forecast takes a holistic view of hardware, software, and supporting tech, including consumer and enterprise deployments. A departure from the deep-dive individual forecasts in these XR subsectors, this annual forecasting exercise combines them for a more holistic view of the market opportunity for spatial computing.

So what did the forecast uncover? Starting at the top, the high-level revenue comparison between AR (headworn and mobile) and VR reveals their respective penetration levels and lifecycle stages. Mobile AR leads the pack with $13.5 billion in revenue this year, followed by VR ($11.9 billion) and headworn AR ($3.8 billion). Here, mobile AR’s lead is owed to piggybacking on an installed base of 3 billion+ smartphones.

But that installed base doesn’t always translate to revenue. For example, consumer spending in mobile AR is relatively low. Most of that spending is for digital goods, such as in-app purchases in Pokémon Go. Though the game is still going strong, it’s a bit of an outlier as most consumers aren’t paying for AR experiences. Those that do mostly execute in-app purchases – an established and comfort-advantaged behavior thanks to the wide world of mobile gaming. Bottom line: consumers largely aren’t buying AR apps.

So if not 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 or marketing targets. It includes AR marketing, commerce and experience creation. Put another way, most mobile AR usage and activity is brand sponsored. And that B2B2B principle transcends mobile AR. We see the same in VR and headworn AR, including developer tools and other enabling tech.

Speaking of VR, it’s a segment where most revenue comes from consumers. The big story there continues to be Meta’s loss-leader investments to gain early market share and build a network effect for their vision of the future connected web. Though we won’t spend much time in this report invoking the m-word, the metaverse should be mentioned here as Meta’s motivation for all this investment. See our State of Spatial Computing report for more depth on that topic.

As for headworn AR, most spending today is from enterprises, as AR glasses aren’t consumer-ready. That statement applies on both technological and cultural levels. But we’re gradually getting there through the work of tech giants like Google, Meta; and enablers like Qualcomm and Niantic. But the main story in AR glasses is continued speculation around what Apple may do. All eyes are on the Cupertino market maker due to its track record in mainstreaming emerging tech through its signature halo effect. It could make or break AR.

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

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What’s Covered

Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 17 years in research and intelligence in tech sectors. This includes the past 7 years covering AR & VR as a primary focus.

This report focuses on XR 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. For more information on what’s included and not included in the forecast (a key consideration when evaluating the findings) see the next slide.

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

Spatial computing – including AR, VR, and other immersive tech – continues to alter the ways that we work, play, and live. But there have been ups and downs, characteristic of hype cycles. The pendulum has swung towards over-investment, then towards market correction – leaving us now in a middle ground of reset expectations and moderate growth.

Beyond that macro view, the spatial spectrum holds greater nuance in the varied growth curves of its subsectors. Those seeing the most traction include AR brand marketing and consumer VR. Meta continues to advance the latter with massive investments, loss-leader pricing, and new hardware launched this year.

Driving this investment is Meta’s vision for the metaverse. Disproving our prediction last year, “metaverse mania” hasn’t receded… In fact, it has gained steam. “Steam” is perhaps the right term, as the metaverse continues to be mostly vapor. It has immense potential as an interconnected 3D web… but is currently more about unfocused punditry than real products.

Stepping back, what is the metaverse? By some definitions, you’re in the internet instead of on the internet. This manifests in 3D virtual spaces that host time-synchronized interaction between place-shifted participants. Today’s metaverse-like fiefdoms include multiplayer games like Fortnite and Roblox. They’re not THE Metaverse (uppercase M), because they exist as silos that aren’t interoperable.

But it’s not just about 3D gaming. Beyond the common metaverse connotation for online 3D experiences, there’s a second track. We’re talking about a potential physical-world metaverse. The idea is that geo-anchored data can trigger devices to evoke digital content, including AR, where and when it’s relevant.

This metavearth as we call it is built on a multi-dimensional data mesh – sort of like Google’s search index but for the physical world. This metaverse track is potentially more valuable than its online 3D counterpart. It’s also truer to the Greek root meta, which means “beyond.” We’re talking about digital content that evokes meaning beyond a given entity’s physical state.

But enough about the metaverse. While its theoretical endpoints are pursued, its building blocks are creating standalone value today. That brings us back to VR and AR, which happen to map to these online and “real-world” metaverse tracks. With both technologies, we continue to see traction and value through the work of Snap, Meta, Google, and others.

Beyond user-facing products, a spatial tech stack lies beneath. This involves a cast of supporting parts. We’re talking processing muscle (Qualcomm), experience creation (Adobe), and developer platforms (Niantic). These are the engines of AR and VR growth.

So how is all of this coming together? Where are we in spatial computing’s lifecycle? And where are there gaps in the value chain that signal opportunity for AR and VR players? We dive into these questions and others through numbers and narratives. The goal, as always, is 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’ 17 years in tech-sector research and intelligence. This includes the past 7 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.

In covering spatial computing for seven 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.

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. More recently, we began to produce separate forecasts for AR and VR. Though they share technical underpinnings, their nuanced market dynamics deserve deeper and focused treatment.

We continue to double down on that segmentation by focusing this report on VR specifically. Given its unique dynamics – in both technology and user adoption patterns – it compels its own focused analysis. This allows us to go deeper on key revenue sources like consumer, corporate & industrial, and VR-enablement software. We did the same earlier this year for mobile AR and headworn AR.

So what did we find out? Our outlook continues to be best characterized as cautiously optimistic, especially when compared to several large research firms that turn attention to VR occasionally to publish eyepopping revenue estimates in the hundreds of billions of dollars. By comparison, we’re comfortably and confidently in the tens-of-billions range for aggregate VR spending in outer years of this financial outlook.

The question is how VR is materializing today. How are revenues trending? Which subsectors are most opportune? How will Meta’s ongoing investments accelerate the sector? And how will VR fare in the post-Covid era? We tackle these questions through numbers & narratives.

Price: $1999

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

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What’s Covered

Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 17 years in research and intelligence in tech sectors. This includes the past 7 years covering AR & VR as a primary focus.

This report focuses on V–R 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. For more information on what’s included and not included in the forecast (a key consideration when evaluating the findings) see the next slide.

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

AR comes in many flavors. This is true of any technology in early stages as it twists around and takes shape. The most prevalent format so far is social lenses, as they enhance and adorn sharable media . Line-of-sight guidance in industrial settings is also proving valuable .

But a less-discussed AR modality is visual search. Led by Google Lens and Snap Scan, this lets users point their smartphone cameras (or future glasses) at real-world objects to identify them. It can contextualize things in the real world with informational overlays… or what we call “captions for the real world.”

This flips the script from other forms of AR in that it identifies unknown items rather than displaying known ones. As such, the potential use cases are greater – transcending pre-ordained experiences that can have relatively narrow utility. Visual search has the extent of the physical world as its canvas.

For example, use cases include education, travel, and shopping. Students can identify landmarks, while travelers discover and navigate new locales. Socialites can discover new bars & restaurants. And fashion acolytes can identify apparel they encounter IRL.

Notably, these are high-frequency activities. In that sense, like web search, visual search’s utility could emerge throughout a given user’s day. This engenders stickiness and repeat use… which can’t always be said for AR lenses whose value lies in novelty or whimsy.

Beyond utility and range, visual search’s value stems from a factor that makes web search so valuable: intent. The lean-forward act of identifying objects visually can signal high buying intent when done in commercial contexts such as fashion and food discovery.

These are all reasons Google is so keen on visual search. Along with voice search, it could help the search giant future proof its core business. This is amplified by gen-Z’s affinity for the camera, and its spending power as it phases into the adult consumer population.

To that end, Google continues to invest in developing and accelerating visual search. For example, a Google Lens button now sits prominently next to the search bar on Google’s mobile interface – prime real estate to drive exposure and adoption.

Google meanwhile has an inside track. As the world’s search engine for 20+ years, it has a knowledge graph and image database to fuel AI training sets for object recognition. Snap is also primed for narrower, but still high-value, use cases like fashion and food discovery.

But though all the above adds up on theoretical levels, there are barriers in practice. These include computational challenges as well as behavioral and cultural impediments. Though visual search is compelling, it deviates from deep-rooted consumer habits.

So how will it develop in the coming months and years? Who are the players? And how big could it get? We set out in this report to answer such questions through numbers and narratives. The goal, as always, is to empower ARtillery Intelligence clients and Pro subscribers 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’s viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence 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

Though AR hasn’t demonstrated the world-changing capabilities that were touted in the technology’s circa-2017 hype cycle, it’s finding success in specific areas. Those include enterprise productivity and brand marketing, both of which were examined in recent ARtillery Intelligence reports like this one.

Zeroing in on the latter, one company leading the way in providing ¬– and generating meaningful revenue from – AR marketing is Snap. Congruent with its self-designated “camera-company” moniker, it has made an early commitment to social AR lenses and continues to double down on the technology.

This plays out in a few ways. It all starts with seeding consumer demand and cultivating behavior through interactive lenses. They enhance already-popular activities such as media sharing, selfies, and status updates. Snap first did this with lenses that it created in-house – including whimsical selfie adornments such as dog ears and rainbow vomit.

Seeing the success of those AR lenses, Snap was emboldened to take AR to the next level: a creator platform. Lens Studio was born to scale up AR development and broaden its use cases through the crowd-sourced creativity of far-flung designers and developers. Snap continues to attract them through an ever-broadening set of features for creating, promoting, and monetizing lenses.

The resulting scale and innovation achieved through Lens Studio have driven even greater lens usage. That user demand in turn attracts more exposure-driven lens creators. This virtuous cycle has brought Snap to the lens-leading position it enjoys today, including 6 billion daily lens engagements. This is the equivalent of one lens engagement for every human on earth, per day – exceeding any other consumer AR product. Snap also boasts 250 million daily active lens users, which is about 75 percent of its overall users.

All the above has led to the real endgame for Snap: ad revenue. Brand advertisers continue to be attracted to the scale that Snap has achieved with its AR lenses. Beyond sheer reach, brand marketers are drawn to AR’s creative capacity to demonstrate products with greater dimension. And campaign case studies continue to validate AR marketing’s efficacy and performance versus 2D benchmarks.

But beyond Snap’s historical evolution and the flywheel effect that drives the aforementioned “virtuous cycle,” what are lessons and strategic takeaways? What is Snap doing right in terms of platform commitment, investment, innovation and execution? How has it built an AR-first company culture? And how does all the above prime Snap for AR’s next era: smart glasses?

We set out in this report to answer such questions through a deep look at Snap’s past, present, and future. We’ve talked to Snap executives and spent the past few years tracking its AR evolution. We’ll synthesize that analysis in the coming pages through numbers and narratives.

The goal, as always, is to empower ARtillery Intelligence clients and Pro subscribers 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’s viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence 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.

In covering spatial computing for seven 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.

Beyond 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. More recently, we began to produce separate forecasts for AR and VR. Though they share technical underpinnings, their nuanced market dynamics deserve deeper and focused treatment.

We continue to double down on that segmentation by focusing this report on mobile AR specifically. Given its leading revenue position among AR segments, and its hardware installed base, it compels its own focused analysis. This allows us to go deeper on key revenue sources like consumer, corporate & industrial, advertising and commerce. We’ll do the same later this year for head-worn AR and VR.

So what did we find out? Our outlook continues to be best characterized as cautiously optimistic, especially when compared to large generalist research firms that turn attention to AR occasionally to publish eyepopping revenue estimates in the hundreds of billions of dollars. By comparison, we’re comfortably and confidently in the U.S.$ tens-of-billions range for aggregate mobile AR spending in outer years of this financial outlook.

The burning questions: How is mobile AR pacing? Which subsectors are most opportune? And what are the business models developing today? We answer these questions through numbers & narrative in this slide-based report. The goal, as always, is to empower you with a knowledge edge.

Price: $1999

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

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What’s Covered

Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 17 years in research and intelligence in tech sectors. This includes the past 7 years covering AR & VR as a primary focus.

This report focuses on AR 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. For more information on what’s included and not included in the forecast (a key consideration when evaluating the findings) see the next slide.

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

Shoppability is the new black. There’s a trend towards all things being shoppable. We’re talking buy buttons on everything from YouTube videos to Instagram Stories. This isn’t a new concept but is one of many trends that’s been Covid-accelerated as it piggybacks on broader eCommerce inflections.

To put a number on this phenomenon, consumer purchases influenced by social media – otherwise known as social commerce – are projected to grow from $492 billion globally to $1.2 trillion by 2025 according to Accenture. This growth will be fueled by the rise of online social influence, and the “shoppability” trend noted above.

Elsewhere – and for similar reasons – we see a separate trend: camera commerce. Examined recently in an ARtillery Intelligence report, this involves AR-fueled shopping. This broad category can involve 3D and spatial product visualization to virtually try on everything from cosmetics to couches.

Camera commerce also includes visual search. This flavor of AR – seen in Snap Scan and Google Lens – lets consumers point their phones at objects to contextualize them. And the killer app is interactive shopping. Camera-forward consumers can identify, and buy, items they encounter in daily travels. In fashion contexts, Snap calls it “outfit inspiration.”

Panning back, these two macro trends – shoppability and camera commerce – are on a collision course. Point your phone at a jacket a friend is wearing using Snap Scan, then buy it right on the spot. This process compresses the traditional purchase funnel through a visually-informed consumer shopping flow.

This collision of AR and shopping is also future proofed. In other words, it will only grow as it’s well aligned with the habits and proclivities of the “camera-native” generation Z. This is an important trend as gen Z is increasingly buying-empowered as it phases in to a dominant and influential position within the adult consumer population.

All of the above is underway, but there’s a ways to go in cultural acclimation and capability. The former is happening gradually in the gen Z cultural takeover, among other factors. But it could still use a jolt… which is happening as underlying capabilities evolve and as tech giants plant their stakes in AR shopping to future proof their businesses.

So far, those tech giants include the players noted already – Google and Snap. But it also includes a broader set of companies that see opportunity in this fusion of AR and shopping. We’re talking Pinterest, Shopify, Houzz, TikTok and a growing list of others with a vested interest in eCommerce-based revenue.

So who is doing what? Where are meaningful products and business models developing today? And where could this collision of AR and shopping lead us next? We’ll examine these questions throughout this report, including case studies that spotlight leading innovators at the intersection of shoppability and camera commerce.

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’s viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence 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

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’ reasons for disinterest? And how can VR software and hardware developers optimize product strategies accordingly?

These are questions we set out to answer. Working closely with Thrive Analytics, ARtillery Intelligence wrote questions to be presented to more than 98,000 U.S. adults through Thrive’s established consumer survey engine. The results are in, and we’ve analyzed the takeaways in a narrative report.

This follows similar reports we’ve completed over the past five years (and last month’s corresponding AR report ). Wave VI of the research now emboldens our perspective and brings new insights and trends to light. All six 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, 23 percent of households own or have used a VR headset, the same amount reported in Wave V. Though this is flat growth, the good news is that VR continues to show high satisfaction levels and usage frequency.

As for price sensitivity, demand inflects when prices fall into the $200-$400 range and lower. This is notably the Meta Quest 2’s price range. In that light, this finding validates other evidence – and our market-sizing estimates – for Quest 2’s growth. It continues to hold a quality edge, aggressive price competition, and an accelerating VR market share.

Furthermore, standalone VR – embodied by Quest 2 – outperforms other categories. It specifically addresses many consumer objections to PC-based VR including cost, confinement, and setup friction. One exception is game console-based VR – namely PSVR – which has established a user-friendly persona.

Meanwhile, non-VR users report relatively low interest – 18 percent, down from 20 percent in Wave V. Worse is their explicit ambivalence towards the technology (“just not interested”). This downward trend is concerning, as public interest in VR continues to wane from its peak during the industry’s circa-2017 hype cycle.

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 don’t want to try it, which presents a sizable marketing challenge for VR proponents to push that first taste.

But if anything is going to bring that accessibility and interest to mainstream markets, it’s the aggressive pricing and compelling play of Meta Quest 2, as noted. These factors continue to attract new users, which then attract developers. As game & app libraries build in this way, a virtuous cycle – or flywheel effect – propels the VR market.

These points join several other strategic implications that flow from the latest consumer VR sentiments. We’ll examine those takeaways in the coming pages, including the latest wave of findings and our analysis for what it means. The goal, as always, is to empower you with a knowledge edge.

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Methodology

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 98,400 U.S. Adults. ARtillery Intelligence wrote this report, containing its insights and viewpoints on the survey results.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 17 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports 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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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 products and 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 102,000 U.S. adults through Thrive’s established consumer survey engine. As the fifth wave of this mobile AR research, 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. Now a deeper view into real consumer usage and attitudes validates those narratives while providing new dimension on mobile AR strategies and opportunities.

So what did we find out? At a high level, mobile AR usage has grown to 30 percent of U.S. adults. Many of these users experience AR through dedicated AR 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 54 percent reporting that they use it at least weekly. The top app category is gaming, which we attribute to Pokémon Go’s sustained traction. But other categories such as social AR and visual search continue to make headway. Mobile AR users also indicate high levels of satisfaction.

But beyond these and a few other positive signals, there are negative signs and areas for improvement. For example, non-mobile AR 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 get it. But there’s little drive for non-users to get that first taste. This boils down to 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 corresponding VR consumer research that we’ll produce in a report like this next month. This makes it a common challenge for immersive tech, though AR is relatively advantaged by mobile 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 real endgame: headworn. As always, the goal is to empower ARtillery Pro subscribers with a greater knowledge position.

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Methodology

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 102,000 U.S. Adults. ARtillery Intelligence wrote this report, containing its insights and viewpoints on the survey results.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 17 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports 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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Editor’s note: While most ARtillery Intelligence reports are available for individual purchase, this report is available exclusively for ARtillery Pro subscribers. Sign up here.

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Executive Summary

Though we spend ample time examining consumer-based AR endpoints, greater near-term impact is seen today in the enterprise.

This takes many forms including data visualization in corporate settings, or software to create customer-facing AR experiences for brands. But the greatest area of enterprise AR impact today is realized in industrial settings.

These use cases include AR visualization to support assembly and maintenance in manufacturing contexts. The idea is that AR’s line-of-sight orientation can guide front-line workers. Compared to the “mental mapping” they must do with 2D instructions, line-of-sight support makes them more effective.

This effectiveness results from AR-guided speed, accuracy, and safety. These micro efficiencies add up to worthwhile bottom-line impact when implemented at scale in industrial operations. Macro benefits meanwhile include lessening job strain and the “skills gap,” which can lead to preserving institutional knowledge.

For example, AR leader PTC reports up to 40 percent improvements in new employee productivity, 30 percent greater first-time fix rates, 50 percent reductions in training costs, and 25 percent reductions in materials scrap.

But it’s not all good news. Though all these advantages are valid, it’s challenging to get to the point of realizing them. Practical and logistical barriers loom, including organizational inertia, politics, change management and fear of new technology among front-line workers.

The biggest symptom of these stumbling blocks is the dreaded “pilot purgatory.” As its name suggests, this is when AR is adopted at the pilot stage, but never progresses to full deployment. It’s one of the biggest barriers and pain points in enterprise AR today.

ARtillery Intelligence has identified sources and solution areas for pilot purgatory as the “3 Ps.” Comprising people, product, and process, they’re the top areas where effective AR implementation strategies should focus.

With that backdrop, we continue the narrative in this report on enterprise AR, including new ARtillery Intelligence market sizing data. Moreover, we devote the bulk of this report to “show rather than tell.” We’ll do this 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 AR 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 variety of business verticals.

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

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Methodology

This report highlights ARtillery Intelligence’s viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence 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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