Augmented reality (AR) and wearable devices are proliferating around the world, with a lot of hype focused on consumer technology.

However, a new report from Beecham Research shows business applications are becoming more significant and will drive growth over the next five years.

The report points to manufacturing, logistics, healthcare and retail as some of the most dynamic markets, where AR offers a new way for people to interact with information hands-free, to provide a greater depth of control, and access to knowledge.

The report entitled, ‘Augmented Reality and Wearable Technology - an operational tool for the enterprise', also highlights recent acquisitions that highlights the growing level of market activity and consolidation.

This includes PTC's purchase of Vuforia at the end of last year for $65 million to support its next generation of technology solutions for manufacturers and follows acquisitions of IoT companies ThingWorx and Axeda.

Other acquisitions in 2015 included Apple's purchase of Metaio, borne out of a project at Volkswagen and Facebook's purchase of AR company Surreal Vision.

“It is clear that the overall status of the enterprise market for AR and wearable technology is at a tipping point, moving from trials and testbed projects to real commercial deployments,” says Matthew Duke-Woolley, Beecham Research market analyst and author of the report.

“While it is still questionable to provide a firm forecast, if this speed of transition accelerates as companies quickly recognise the benefits and return on investment, we believe the market can reach just under $800 million by 2020,” he says.

The report looks at some of the emerging business applications of AR and wearable technology.

These include head up displays in manufacturing systems to support complex production processes, collaborative product design and prototyping; remote assistance of specialist distant engineers and technicians; medical systems to enable surgeons to access relevant data in theatre without being distracted; and education and training.

“Current human-computer interfaces in mobile computing are primarily based around touchscreens, but AR along with WT (wearable technology) offers a hands-free computing environment enabling greater interaction with information and the user's surroundings,” says Saverio Romeo, Beecham Research principal analyst.

“We expect to see rapid evolution of smart glasses with more miniaturisation, better field of view and battery life, while there will also be increasing attention on the convergence with virtual reality (VR) technology and the Internet of Things to deliver competitive advantage. Collaboration with AR/VR and IoT players will be crucial,” Romeo says.

“AR technology and wearable devices blur the lines between computer and human environments and provide a more immersive and interactive experience.

“While it is still unclear where the consumer ‘killer-apps' will appear, there is real momentum building around business-use cases that will gain pace over the next two years with more product releases, real-world deployments and market acquisitions,” says Duke-Woolley.