Middle East & Africa Set for Huge Spike in Augmented/Virtual Reality Revenues as IDC Forecasts Annual Spending to Top $6 Billion by 2020

The Middle East and Africa (MEA) augmented and virtual reality market will grow strongly over the next five years, posting annual growth rates of more than 100% across the 2016–2020 period, according to the recently launched 'Worldwide Augmented and Virtual Reality Spending Guide' from International Data Corporation (IDC). The global ICT and advisory services firm expects the MEA market to expand from a relatively moderate value of $181.59 million this year to top a staggering $6 billion in 2020.

"The concept of augmented and virtual reality is still relatively new for both vendors and consumers alike," says Saad Elkhadem, a research analyst at IDC Middle East, Africa, and Turkey. "However, the global success of Pokémon Go has brought the concept to a much broader audience. And with industry powerhouses such as Microsoft, Samsung, Google, Sony, and Facebook pushing the technology to the masses, end-user awareness and familiarity is only going to grow."

IDC expects consumers to account for more than $100 million of the region's AR/VR spending in 2016. This represents a share of around 56%, and makes the consumer segment the biggest in the region as things stand. However, IDC expects the consumer segment's share of the market to steadily fall over the forecast period as the commercial segment sees more and more use cases emerge for the technology. From 2018 onwards, the consumer segment will cease to be the biggest spenders in the market, giving way to segments such as distribution & services and manufacturing & resources. 

"We forecast spending on AR/VR hardware elements to grow from $118 million in 2016 to reach more than $3.2 billion in 2020," says Elkhadem. "There are currently offerings spanning all price points, from thousands of dollars at the top end down to tens and hundreds of dollars – or even free in some cases – at the bottom. The main challenge is getting the technology into the hands of the masses, but even more important is the need to provide consumers with compelling content that proves this is a viable technology capable of adding meaningful value to their lives."

From a global perspective, Asia/Pacific (excluding Japan), the United States, and Western Europe will account for three quarters of worldwide AR/VR revenues in 2016, according to IDC. The individual market values for these three regions will be broadly similar early in the forecast period, but the U.S. is expected to pull well ahead of the other two by 2020. As AR/VR technology is still going through the initial stages of adoption, every region is expected to see annual growth of more than 100% over the coming five years.