The total value of three emerging categories of products — augmented and virtual reality headsets, smart home devices, and wearables — is expected to reach $369.6 billion by the end of this calendar year and swell to $524.9 billion by the end of 2025, according to a new report.
New data from International Data Corporation (IDC) revealed that collectively, these products have appeared within the last decade and have firmly established themselves beyond early adopters and into the mass market.
“Virtual reality headsets are seeing strong growth in 2021 from both consumer and commercial buyers,” said IDC’s Augmented and Virtual Reality team group Vice President Tom Mainelli.
“Today, AR headsets are primarily focused on enterprise use cases, but we do anticipate consumer-focused headsets will gain traction in the later years of our forecast as major technology companies enter the space with new products,” Mainelli said in a statement.
Augmented and virtual reality will see the fastest value growth in the coming years with the anticipation of new devices coming to market from both established and start-up companies and a warming reception among new users.
Smart Home Consumer interest in smart home solutions is largely driven by promises of enhanced entertainment, convenience, safety, and security.
According to the IDC, networked entertainment devices like smart TVs and streaming players will drive the bulk of value, reaching more than $229 billion in 2025 at a five-year CAGR of 7.3 per cent.
“Connected consumer products are accelerating the consolidation of value in services while diminishing the margins in the devices themselves. The breadth, depth, uniqueness, and quality of data sets will increasingly determine the value potential of a smart home vendor,” said IDC’s Smart Home and Office Devices team senior research analyst Adam Wright.
Wearables’ value will increase with the continued popularity of earwear and smartwatches.
Meanwhile, the smartwatch market will grow as the health and fitness experience evolves to provide prescriptive data as well as descriptive data to uncover new actionable insights.
“Wearables have earned a spot in consumers’ minds as well on as their bodies, performing a number of functions ranging from health and fitness to communications to multimedia consumption,” said IDC’s Wearables Team research director Ramon T. Llamas.
“At the heart of this, wearables make these experiences and many others more convenient for the wearer and continue to attract more first-time users and first-time vendors.”
