AR & VR - Israel

Israel

In Israel, revenue in the AR & VR market market is projected to reach US$117.6m in 2024.
Revenue is expected to exhibit an annual growth rate (CAGR 2024-2029) of 9.43%, leading to a projected market volume of US$184.5m by 2029.
The largest market within this market in Israel is AR Software, which is anticipated to have a market volume of US$38.6m in 2024.
While most revenue is generated the United States with a projected market volume of US$10,900.0m in 2024, in Israel is also participating in this growing sector.
In the AR & VR market market, the number of users in Israel is expected to reach 6,331.0k users by 2029.
User penetration will be 63.4% in 2024 and is projected to decrease slightly to 63.3% by 2029.
Furthermore, the average revenue per user (ARPU) in Israel is expected to be US$19.9.
Israel's AR & VR market is rapidly evolving, driven by innovative startups and a robust tech ecosystem focused on enhancing user experiences across various industries.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
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Analyst Opinion

Israel, a country known for its technological advancements, has seen significant development in the AR & VR market in recent years. Customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors have all played a role in driving the growth of this industry.

Customer preferences in Israel have shifted towards immersive and interactive experiences, which has fueled the demand for AR & VR technologies. Consumers are increasingly seeking innovative ways to engage with content and products, and AR & VR offer unique opportunities to do so. Whether it's virtual tours of historical sites, interactive gaming experiences, or virtual shopping, Israelis are embracing these technologies as a way to enhance their daily lives.

Trends in the AR & VR market in Israel have been influenced by global advancements in technology. As the capabilities of AR & VR devices improve, so does the demand for these technologies. The introduction of more affordable and user-friendly devices has also made AR & VR more accessible to a wider audience.

This has led to an increase in the number of AR & VR applications being developed in Israel, spanning various industries such as healthcare, education, entertainment, and retail. Local special circumstances have also contributed to the growth of the AR & VR market in Israel. The country's strong startup ecosystem and entrepreneurial spirit have fostered a culture of innovation, leading to the emergence of numerous AR & VR startups.

These startups have been able to leverage Israel's technological expertise and access to venture capital funding to develop cutting-edge AR & VR solutions. Additionally, Israel's close ties with the United States and Europe have facilitated collaborations and partnerships with international companies in the AR & VR space, further driving the growth of the market. Underlying macroeconomic factors have also played a role in the development of the AR & VR market in Israel.

The country's strong economy and high disposable income levels have created a conducive environment for the adoption of new technologies. As consumers have more purchasing power, they are more willing to invest in AR & VR devices and experiences. Furthermore, the Israeli government has recognized the potential of the AR & VR industry and has implemented supportive policies and initiatives to encourage its growth.

This includes providing funding and grants to startups, as well as promoting research and development in the field. In conclusion, the AR & VR market in Israel has experienced significant growth due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. As Israelis continue to embrace immersive and interactive experiences, the demand for AR & VR technologies is expected to further increase.

With its strong technological ecosystem and supportive government policies, Israel is well-positioned to be a key player in the global AR & VR market.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).