Virtual reality (VR) may get more attention these days, but it’s augmented reality (AR) that’s shaping up to be more lucrative. AR will reach an estimated $80 billion market size by 2025, compared to $34 billion for VR by 2022. Companies are expected to ultimately spend more on AR than VR in the coming years.
“After 2018, AR spending will surge ahead, hitting [its] stride in healthcare delivery, product design, and management-related use cases,” research firm IDC said earlier this year.
Stacks of coins on a table with a small plant on top of the tallest stack.
The good news for investors is that VR and AR are so closely related that most companies betting on either field will likely receive a payoff in the other as well. And the best news is that many of these companies — like Qualcomm (NASDAQ:QCOM), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), and NVIDIA (NASDAQ:NVDA) — also pay dividends, allowing your AR investment to pay you back while the market reaches its maturity.
Qualcomm is best know for its mobile processors right now, but the company is betting that at least part of its future lies in using its chip prowess for AR gains.
Earlier this year Qualcomm said its Snapdragon 835 processor would be used to power a new pair of augmented reality glasses created by Osterhout Design Group. The company believes that AR is “the next mobile computing platform,” and the 835 processor is one of the company’s first steps toward gaining from that mobile shift.
The company already accounts for about 40% of the worldwide mobile application processor market share, and if it can continue selling OEMs on the idea that its chips are superior for AR also, then Qualcomm should be able to transition nicely from a mobile processor maker to an AR one as well. ..