Valued at USD 2.01 billion in 2020, the augmented reality & virtual reality in healthcare market is projected to reach USD 9.14 billion by 2028, expanding at a CAGR of 27.1% during the forecast period of 2021–2028. Established players include Atheer, Inc., Augmedix, EchoPixel, Firsthand Technology Inc., LAYAR, Medical Realities Ltd, Orca Health, Psious, TheraSim Inc., and WorldViz. This article focuses on virtual reality therapies, regional trends and competitive strategy within the augmented reality & virtual reality in healthcare market.

Virtual Reality Therapies Open New Clinical Use Cases

The virtual reality segment is anticipated to witness a high growth rate during the forecast period. It allows users to interact with a three-dimensional environment, opening new possibilities for rehabilitation and pain management. Virtual reality exposure therapy is a treatment method for phobias such as claustrophobia, driving and fear of heights, as well as post-traumatic stress disorder. Polaris tracks virtual reality exposure therapy alongside simulation, diagnostics, rehabilitation and pain distraction as the virtual reality sub-segments.

A rising need for innovative diagnostic procedures and an upsurge in neurological illnesses are propelling demand. Telehealth platforms illustrate the breadth of use: XRHealth received USD 7 million in funding in April 2020 to expand its telehealth virtual and augmented reality platform, which has applications for patients with multiple sclerosis, menopause, anxiety, chronic pain, breast cancer, fibromyalgia, brain injury, substance abuse and post-stroke rehabilitation, among others.

The pandemic reinforced this direction, as COVID-19 drove adoption of these systems in telemedicine, patient care management and medical marketing. Smart glasses and head-mounted devices are likewise used for telemonitoring, diagnostics, and training and simulation.

Lower pricing of head-mounted devices, growing public and private investment and a trend toward acquisitions and mergers are cited as factors supporting adoption of the technologies across both augmented and virtual reality segments.

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Regional Outlook for the Augmented Reality & Virtual Reality in Healthcare Market

North America is expected to be the most significant region, owing to increased technology adoption, modern healthcare facilities, growing investment in research and development, and a favorable regulatory environment for innovative products. Many new augmented and virtual systems have been launched in the U.S., and hospitals are adopting them to better assist surgeons during critical procedures.

Asia Pacific is expected to be the fastest-growing region because countries such as China and India have continuously invested in healthcare infrastructure in recent decades, and because the region is adopting these technologies amid rapid improvement in medical education. In 2021, a hospital in Tokyo used virtual reality to live stream surgery for research and education purposes.

Polaris adds that its analysis details key market dynamics to help industry players align business strategies with current and future trends, supported by regional assessment at local, national and global levels.

Segmentation and Competitive Strategy

Polaris segments the market by component (hardware, software and service), by technology and by region. Augmented reality covers surgical application, rehabilitation, and training and medical education, while virtual reality covers simulation, diagnostics, virtual reality exposure therapy, rehabilitation and pain distraction. Augmented reality held the largest share in 2020, whereas virtual reality is the segment expected to post a high growth rate.

Major players are investing significantly in research and development to bring the technology into healthcare. Companies are devising strategies such as acquisitions, funding, mergers and collaborations to increase their presence, and demand across surgery, training and simulation, telemonitoring and diagnostics gives vendors several entry points.

Strategic Takeaways for B2B Stakeholders

The Augmented Reality & Virtual Reality in Healthcare an evidence suggests two parallel growth paths: augmented reality anchored in surgical and educational use, and virtual reality expanding into therapy and rehabilitation. Vendors with clinical content for virtual reality exposure therapy and pain distraction can complement hardware-led strategies, while regional planning should reflect North America's leading position and Asia Pacific's faster growth.

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