After a slower than anticipated start the augmented reality (AR) market is positioned for fast growth, powered by demand from enterprises, according to ABI Research.

The firm forecasts that AR in enterprise applications will hit an inflection point in 2018, with smart glass shipments growing to 28 million in 2021, at a 227% compound annual growth rate (CAGR).

Driving the strong growth is a steadily rising interest in how AR can benefit businesses, along with a progressively better understanding of the available use cases and applications pertinent to customers, ABI said.

Last year “was a year of discovery for AR, with the industry focusing on initial ROI [return on investment] metrics,” said Eric Abbruzzese, senior analyst at ABI. “Pilot phases will continue into 2017, with early adopters moving to more substantial deployments. New AR customers will be excited by positive performance indicators across the market, with the promise of increased workforce efficiency and error reduction.”

ABI Research forecasts total market revenues, across devices, platforms, and licensing, to reach $96 billion by 2021. The energy, manufacturing, and logistics sectors are expected to account for the largest market shares, but the healthcare and media and entertainment markets will be the fastest growing, with 323% and 400% CAGRs respectively.

Next year will be the year all verticals experience a significant jump in AR adoption rates, Abbruzzese said. “This is due to a congruence of three factors: significant time in market for pilot phases and small deployments to provide success indicators; greater breadth and depth of use case support through platforms; and an overall more mature market in terms of deployments, integrations, and usage,” he said.

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