The augmented reality (AR) market has become more popular with consumers but has yet to reach mainstream status, according to a new Strategy Analytics report.

As noted by the analyst firm, high functionality comes with an even higher price tag — and while AR device sales may creep at a snail's pace, that price premium is driving robust revenues. In fact, the consumer AR device market tripled between 2020 and 2021 with AR revenues outpacing the overall market, according to the report. That growth was bolstered by popular smartphone applications such as Snapchat and Pokémon GO.

Overall, consumer shipments for AR devices grew 161% YoY from 2020-2021, according to Strategy Analytics. By 2027 the research firm expects that shipments for dedicated AR headsets alone will reach just under $60 million. 

Currently, the range of AR devices trying to gain traction in the consumer AR market has not been successful and failed to achieve more than a single-digit percent share of shipments in 2020-21. However, a “sole survivor” of the current consumer AR market is Nreal, a company that produces consumer AR glasses on a global scale. 

Nreal alone took home a 75% share of consumer AR shipments in 2021, which rose to 81% in the first half of 2022. It was the only vendor to have a greater than single-digit shipment market share in 2021, according to the report. The company's products have been on the market for approximately two years and, in its debut year of 2020, already captured a 30% share of consumer shipments and a 51% share of revenues in consumer AR, said Strategy Analytics. 

To date, the AR device market has been dominated by enterprise devices, most notably Microsoft’s HoloLens, according to the research firm. As a result, higher-end devices have had to transition meet the needs of the enterprise market. 

While enterprise devices have high value, volumes remain small. As such, the overall AR market depends on a consumer market boom to reach its full potential value.