Augmented and Virtual Reality in Healthcare Market (By Component: Hardware, Software, Services; By Technology: Augmented Reality, Virtual Reality; By End User: Hospitals, Clinics, and Surgical Centers, Research Organizations and Pharma Companies, Research and Diagnostics Laboratories, Government and Defense Institutions, Others; By Application) - Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2022-2030

The global Augmented and Virtual Reality in Healthcare market size was estimated at USD 2.3 billion in 2021 and is expected to surpass around USD 19.6  billion by 2030 and poised to grow at a compound annual growth rate (CAGR) of 26.88% during the forecast period 2022 to 2030.

Key Takeaways:

• By technology, the augmented reality segment garnered revenue share of around 60.2% in 2021.
• By component, the hardware segment held highest revenue share of around 67.8% in 2021.
• By region, North America dominated market with 40.8% revenue share in 2021.

Technological advancements and digitalization in healthcare, favorable government initiatives, rising healthcare expenditure, growing usage in surgical procedures, and medical training are some of the fundamental factors anticipated to boost the growth and adoption of the augmented reality (AR) and virtual reality (VR) technologies in the healthcare industry. These technologies have wide applications in healthcare including surgeries, diagnostics, rehabilitation, training, and education.

Increasing advancements and digital disruptions in the healthcare system, rising healthcare expenditure, and the rising need for efficient and innovative solutions to enhance clinical and operational outcomes are contributing to the growth of the market. Augmented reality (AR) and virtual reality (VR) technologies are witnessing widespread adoption in surgical departments, simulation labs, education and training, and chronic pain management.

The rising number of complex surgeries is driving the demand for VR-based models to assist the surgeon. AR-based apps are used in multiple spaces such as training and education modules and patient care management tools. Innovators are receiving recognition in the form of increased investments by venture capitalists and collaboration opportunities by established players. For instance, in September 2021 OssoVR rose funding of USD 17.0 million and planned to utilize the funding towards developing virtual reality-based surgical and medical device training modules.

The hardware component segment witnessed the highest adoption owing to the rising adoption of AR and VR into different fields of healthcare. These devices range from desktops to wearable devices to display devices. Due to their audio-visual significance AR and VR is being widely adopted in education, simulation, telemedicine, and data visualization. Increasing product development in this space is contributing to market growth. For instance, in February 2019 Philips Healthcare launched a mixed reality solution by collaborating with Azurion and Microsoft. However, the services segment is expected to witness a significant CAGR during the forecast period owing to the growing need to create an immersive experience for the customer. The rising adoption in clinical trials, psychological treatment, advanced diagnostics, surgeries, and body mapping is expected to support market growth.

In addition, AR technological solutions are widely used in surgical procedures, fitness management, education and training, patient care management, medical imaging and is expected to be implemented in many more functionalities. Recent advancements in AR components have reduced the cost of augmented reality solutions and enhanced customer experience. The increasing prevalence of diseases and surgeries along with advancements in healthcare infrastructure and IT are some of the driving forces. Medical education and training using augmented reality technological solutions is also emerging rapidly and is expected to support growth. On the other hand, virtual reality technology is expected to be the fastest-growing region during the forecast period owing to the rapid integration of technology into healthcare services. VR technological solutions are widely used in telemedicine, anatomy visualization, and diagnostics. Additionally, it provides hands-on experience in medical education which is expected to contribute to market growth.

Report Scope of the Augmented and Virtual Reality in Healthcare Market

 Component Insights

In 2021, the hardware segment dominated the market for augmented reality and virtual reality in healthcare and accounted for the largest revenue share of 67.8%. Devices such as head-mounted displays, smart glasses, and 3D sensors hold significant shares in the market for AR & VR in healthcare. Head-mounted devices and smart glasses are widely used in training and simulation, surgeries, diagnostics, telementoring, and many applications. In the current market scenario, AR/VR hardware has a huge commercialized product base with a high rate of adoption, especially in developed countries, which can be accounted for its largest market share in 2020. Moreover, usage of single hardware in multiple applications is also one of the pivotal factors, which is expected to boost its usage and affect the market for AR and VR in healthcare.

However, the software segment is expected to grow fast over the forecast period owing to recent technological advancements in in-app designing including apps such as EyeDecide. It detects eye conditions by measuring various parameters. In addition, apps such as Applied VR help the patient overcome anxiety during any surgical procedure. In recent years, there has been a huge development in interconnectivity and network services that help patients gain access to these platforms.

Application Insights

On the basis of application, the augmented reality and virtual reality technologies are used in different fields of health care. It helps in performing the most complex surgeries and even the minimally invasive type of surgeries. The advancements in the technology and the growing demand for simplifying the medical surgeries will create more demand for augmented reality in the healthcare sector.

The domestic players and the market players in augmented reality technology have entered into partnership to increase its customer base and provide innovative products in the market. The use of this technologies has enhanced the efficiency of the healthcare sector. In the coming years the competition is expected to grow due to which the prices of these platforms will reduce. Due to the increased use of augmented reality and virtual reality inoperative procedures and visualization of anatomy the market is expected to grow well in the coming years.

Technology Insights

By technology, the augmented reality segment dominated the market for augmented reality and virtual reality in healthcare and accounted for the largest revenue share of 60.2% in 2021. Augmented reality creates a 3D view of objects and the environment around us with wearables such as head-mounted display devices and smart glasses. Factors such as technological advancements, growing demand for efficient treatment, increasing public & private investments, rising number of mergers and acquisitions, and reducing prices of head-mounted devices are among few factors that are driving the demand for augmented reality.

However, the virtual reality segment is expected to witness significant growth during the forecast years. Virtual reality enables the user to interact with a three-dimensional environment and has huge opportunities in rehabilitation and pain management. Virtual Reality exposure therapy is one such process used to treat various phobias such as fear of height, driving, claustrophobia, and posttraumatic stress disorders. Factors such as an increase in the rate of neurological disorders and rising demand for new diagnostic methods are positively driving the growth of the market.

Regional Insights

Based on region, North America dominated the augmented reality (AR) and virtual reality (VR) in the healthcare market and accounted for the largest revenue share of 40.8% in 2021. Factors that are driving growth in this region are higher adoption of these technologies, investment in R&D activities, and favorable government initiatives. The National Institute of Health of the U.S. government is offering funds for research in virtual reality with its application in healthcare. Moreover, there is a rise in outsourcing healthcare IT services in North America due to increased pressure by healthcare providers and payers to reduce treatment costs. This factor has positively impacted the growth of the market for augmented reality and virtual reality in healthcare in the region

However, Asia Pacific is expected to be the fastest-growing market over the forecast period owing to increasing awareness among the population and improving healthcare infrastructure. Developing markets such as India, China, Brazil, and Mexico are promising destinations for outsourcing services related to the development and distribution of AR and VR technologies in healthcare. Latin America, Middle East, and Asia Pacific are still at a nascent stage of development in terms of these technologies due to lack of awareness and lower adoption by the population. Countries such as Israel and UAE are witnessing increasing healthcare expenditure and quality of healthcare services, which is further expected to propel market growth in the region over the forecast period.

 Some of the prominent players in the Augmented and Virtual Reality in Healthcare Market include:

• Eon Reality, Inc
• Layar
• Bioflight VR
• WorldViz
• TheraSim Inc 
• CAE
• GE Healthcare
• Koninklijke Philips N.V.
• Intuitive Surgical
• Siemens Ltd
• Mindmaze

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Nova one advisor, Inc. has segmented the global Augmented and Virtual Reality in Healthcare market

By Component

• Hardware
• Sensors
• Accelerometer
• Gyroscope
• Magnetometer
• Proximity Sensor 
• Semiconductor Component
• Controller/processor
• Integrated Circuits
• Displays and Projectors
• Position Tracker
• Cameras
• Others
• Software
• Services

By Technology

• Augmented Reality
• Surgical Application
• Rehabilitation
• Training & Medical Education
• Virtual Reality
• Simulation
• Diagnostics
• Virtual Reality Exposure Therapy (VRET)
• Rehabilitation
• Pain Distraction

By End User

• Hospitals, Clinics, and Surgical Centers
• Research Organizations and Pharma Companies
• Research and Diagnostics Laboratories
• Government and Defense Institutions
• Others

By Geography

North America

• U.S.
• Canada

Europe

• Germany
• France
• United Kingdom
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Southeast Asia
• Rest of Asia Pacific

Latin America

• Brazil
• Rest of Latin America

Middle East & Africa (MEA)

• GCC
• North Africa
• South Africa
• Rest of Middle East & Africa

Key Points Covered in Augmented and Virtual Reality in Healthcare Market Study:

• Growth of Augmented and Virtual Reality in Healthcare in 2022
• Market Estimates and Forecasts (2017-2030)
•  Brand Share and Market Share Analysis
•  Key Drivers and Restraints Shaping Market Growth
•  Segment-wise, Country-wise, and Region-wise Analysis
•  Competition Mapping and Benchmarking
•  Recommendation on Key Winning Strategies
•  COVID-19 Impact on Demand for Augmented and Virtual Reality in Healthcare and How to Navigate
•  Key Product Innovations and Regulatory Climate
•  Augmented and Virtual Reality in Healthcare Consumption Analysis
•  Augmented and Virtual Reality in Healthcare Production Analysis
•  Augmented and Virtual Reality in Healthcare and Management