Mobile AR Market Poised for Explosive Growth: $60B by 2021

The augmented reality (AR) landscape is undergoing a seismic shift, with mobile AR projected to become a $60 billion industry by 2021. Tech giants like Apple and Facebook are spearheading this revolution, transforming smartphones into powerful AR platforms that could reach over a billion users worldwide.

The Mobile AR Platform Wars Heat Up

The battle for AR dominance escalated when:

  • Facebook declared the camera as “the first augmented reality platform” at F8
  • Apple countered with ARKit, positioning iOS as “the largest AR platform in the world”
  • Other major players including Google, Tencent, and Snap entered the fray

This competition is driving rapid innovation in a market that barely existed before Pokémon Go’s breakthrough success in 2016.

Software vs. Hardware: The AR Adoption Race

Software’s Massive Lead

Mobile AR software platforms are outpacing hardware adoption by 4:1, thanks to:

  • Instant distribution to existing user bases
  • No hardware upgrades required
  • Lower barriers to developer adoption

Key statistics:

  • Facebook’s AR platform could reach 1.2B+ users through Messenger/WhatsApp
  • Apple’s ARKit has potential access to 86% of 700M iPhones running iOS 10
  • Tencent’s WeChat boasts 846M monthly active users primed for AR features

Hardware’s Gradual Growth

While dedicated AR hardware (like rumored AR iPhones) will emerge, adoption will be slower due to:

  • Typical 2.5-year smartphone replacement cycles
  • Higher price points for premium AR devices
  • Gradual market penetration

Revenue Projections and Market Drivers

Mobile AR revenue is expected to follow an exponential growth curve:

  • 2018: Below $10B (ecosystem development phase)
  • 2019: Inflection point reached
  • 2021: $60B+ market valuation

Key Revenue Streams

Sector Projected Share Examples
eCommerce >20% AR product visualization, virtual try-ons
Advertising >10% Native AR ad formats, location-based promotions
Consumer Apps ~10% Social AR filters, utility applications
Enterprise/B2B ~10% AR for training, maintenance, retail
Games ~10% Location-based and tabletop AR games

Regional Breakdown: Asia Leads AR Adoption

Market distribution by region:

  1. Asia (50%): China (Tencent, Alibaba), Japan, South Korea
  2. North America (20%): U.S. tech giants driving innovation
  3. Western Europe (20%): Strong developer ecosystem
  4. Rest of World (10%): Emerging markets showing rapid growth

Why Mobile AR Will Dominate the Market

Mobile AR solves critical adoption barriers that have hampered other AR/VR technologies:

  1. Ubiquitous hardware (existing smartphones)
  2. All-day battery life (no separate power source)
  3. Seamless connectivity (4G/5G networks)
  4. Massive app ecosystems (iOS/Android developer communities)
  5. Telco partnerships (data plan bundling opportunities)

As Mark Zuckerberg predicted, the camera is indeed becoming the first AR platform—but it’s the combination of smartphone hardware and software that will truly unlock augmented reality’s $60 billion potential.


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