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17 April 2024

Virtually Human: Mobile AR Revenue Projected to Hit $21.5 Billion by 2028 

By Jan Iverson
Virtually Human

Consumers are increasingly utilizing AR to purchase physical goods. Through AR product visualization and try-ons, they gain enhanced insights and confidence during the eCommerce decision-making process. This trend is particularly embraced by Generation Z, who are accustomed to camera-native experiences, as well as by brands and retailers alike which will boost AR revenue moving forward.

A new study by ARtillery Intelligence projects that global mobile augmented reality (AR) annual revenue will increase from $10.5 billion in 2023 to $21.5 billion in 2028, reflecting a compound annual growth rate of 15.4 percent. The report, “Mobile AR Global Revenue Forecast, 2023-2028,” delves into the revenue totals and subcategories of mobile AR, encompassing both consumer and enterprise spending. 

According to Mike Boland, Chief Analyst at ARtillery Intelligence, consumer adoption leads the way when looking at mobile AR traction, but consumers themselves aren’t paying for experiences en masse.  

AR revenue

This highlights that most consumer AR experiences are brand-sponsored rather than consumer-purchased, making B2B2C spending a significant market opportunity in mobile AR. 

Top Revenue Categories 

  1. Marketing and commerce enablement generating $4.71 billion in the previous year 
  2. Enterprise productivity and guidance at $4.54 billion 
  3. Consumer spending at $1.01 billion 

ARtillery Intelligence anticipates that marketing and commerce enablement will maintain its spending share lead through 2028, as brands increasingly recognize AR’s ability to demonstrate products in visually immersive and conversion-boosting ways. 

The report also emphasizes the role of the large installed base of AR-enabled smartphones in driving mobile AR’s revenue growth. The greatest AR compatibility is estimated for: 

  • Web AR (3.21 billion units) 
  • Meta Spark (2.91 billion units)   
  • Google’s ARCore (1.66 billion units)  

Additionally, platforms like Snap, TikTok, and Google Lens (visual search) are gaining notable positioning and momentum in the mobile AR space. 

What advances has 2024 seen in mobile AR so far?  

  • Improved Graphics and Realism – AR experiences are becoming more visually stunning and realistic, thanks to advancements in graphics rendering technologies. This includes better lighting effects, more detailed textures, and smoother animations, leading to a more immersive user experience.
  • Enhanced Object Recognition -  Mobile AR apps are improving on recognizing and tracking real-world objects and environments. This means AR overlays can interact more seamlessly with physical objects, providing users with more contextually relevant information and experiences.
  • Spatial Mapping and Occlusion – AR applications are increasingly capable of understanding and mapping the physical space around the user, allowing virtual objects to interact more convincingly with real-world objects and surfaces. This includes occlusion, where virtual objects can be hidden behind real-world objects, enhancing realism. 
  • Gesture and Voice Control – Advances in gesture recognition and natural language processing enable users to interact with AR applications using intuitive gestures and voice commands. This enhances usability and makes AR experiences more intuitive and accessible. 
  • Cloud-Based AR – Cloud computing technologies are being leveraged to offload processing-intensive tasks, allowing for more complex and feature-rich AR experiences on mobile devices without sacrificing performance or draining battery life.
  • Social AR Experiences – Mobile AR apps are increasingly incorporating social features, allowing users to share AR experiences with friends and interact with each other in augmented environments. This includes multiplayer AR games, collaborative design tools, and social media integrations.
  • AR Wearables Integration – As AR glasses and other wearables become more prevalent, mobile AR applications are adapting to seamlessly integrate with these devices, offering users a more immersive and hands-free AR experience.
  • AI-driven Personalization – AI algorithms are being used to personalize AR experiences based on user preferences, behavior, and environmental context. This leads to more tailored and relevant AR content, enhancing user engagement and satisfaction. 

These advancements collectively contribute to making AR a more integral part of everyday mobile experiences, from gaming and entertainment to education, retail, and productivity. 

Jan Iverson is the Creative Director at FS Studio and an award-winning product leader with over 20-years of extensive experience in digital media and marketing, with a specialization in the design and development of AR, VR and 3D activations: mobile apps, games, LBE, sales tools, digital twins; with XR cross-platform content development, and a track record of success in leading award-winning digital creative teams. Virtually Human is her bi-weekly series.