More augmented reality (AR) and virtual reality (VR) applications are cropping up in multiple industries including hospitality, healthcare, retail and education—and the market for these technologies is expected to see dramatic growth in the coming years.

According to the new Worldwide Semiannual Augmented and Virtual Reality Spending Guide from International Data Corp. (IDC), worldwide revenues for the market will grow from $5.2 billion in 2016 to more than $162 billion in 2020. This represents a compound annual growth rate (CAGR) of 181 percent over the 2015-2020 forecast period.

"For many years, augmented and virtual reality were the stuff of science fiction,” said Chris Chute, vice president, customer insights and analysis at IDC. “Recent developments in healthcare demonstrated the powerful impact augmented reality headsets can have at the industry level, and over the next five years we expect to see that promise become realized in other fields like education, logistics, and manufacturing."

The rise of new, less expensive hardware will put VR and AR technology within the grasp of a growing numbers of organizations and individuals, said Tom Mainelli, vice president, devices and AR/VR at IDC.

"But, as always, what people can do with that hardware will depend upon the applications and services that power it,” Mainelli said.

In the coming years, IDC expects developers to create a range of new experiences for the devices that will fundamentally change the way many people work, Mainelli said.

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