Developers will invest $670 million (£446 million) ​in Augmented Reality applications this year, according to a new forecast from ABI Research. This annual figure is expected to exceed $2.5 billion (£1.7 billion) in 2018.

The increase will be seen as AR is used more in mobile devices, particularly when it comes to retail and marketing. These two areas will account for 68% of developer spend this year, with product enhancement responsible for a further 22% and standalone apps contributing 10% of the total.

However, it’s cloud computing that’s expected to drive AR growth in the near future.

Aapo Markkanen, senior analyst at ABI Research, said “The cloud is a natural fit for AR developers, considering how big benefits cloud-based content libraries present for image recognition technologies. The leading SDKs, Qualcomm’s Vuforia and Metaio, introduced cloud recognition capabilities last year, and it’s exactly moves like those that will help bringing AR to the mainstream. Meanwhile, the cloud has always been at the core of Aurasma - HP’s innovative visual browser that is starting to see traction also as a platform for third-party apps.”

The ‘Internet of Everything’ (or ‘Internet of Things’) is also expected to benefit from AR technology.

Dan Shey, practice director at ABI Research, said “In a world where a countless number of physical objects and structures will be connected by sensors, AR can serve as a visualization medium that will make the sensor data situational, bridged to the real-world surroundings. The consumer aspect is unsurprisingly making most of the headlines here, but we’d expect smart eyewear to initially make more waves in transforming the enterprise. Google Glass, like the smart-glass pioneer Vuzix, will find various use cases in verticals such as engineering, logistics, and healthcare.”

[ABI Research Cloud Content and Services]