StreetAuthority Locked 3 Leaders In A Booming $182 Billion Market

Stephen King's The Lawnmower Man was adapted for the big screen in 1992, the story of a disabled landscaper hooked up to a virtual reality landscape and experimental drugs. The VR experiment boosted the title character's intelligence exponentially and even helped him talk to the opposite sex.

I watched this moving having just turned 16 years old, and I would be forever hooked on the potential of virtual reality

VR and augmented reality have remained more fiction than fact -- until recently. The 2012 Kickstarter campaign for headset maker Oculus Rift raised millions but still lacked the software development to complete the experience.

Software and hardware are now coming together and the momentum could create a market to rival the iPhone.

The coming technological leap in consumer electronics could turn a decades long dream into reality... and I've found three companies that could benefit big time.

Virtual reality and augmented reality (AR) are developing fastest in gaming and entertainment but potential uses can be found in nearly every sector from battlefield training for the troops to buying a home.

There are more than 1.2 billion gamers in the world, an easy market for the headset makers and software developers that can bring people into the game. On the other end of the VR spectrum, software creator MindMaze has created an immersive virtual-reality therapy that, according to the company, is helping patients regain motor and cognitive function faster than with traditional physical therapy.

VR hardware revenue is expected to reach $2.3 billion this year on 9.6 million headsets. Growth is forecast to boom into the future with estimates of 110 million headsets shipped annually by 2020.

Goldman Sachs estimates a base case for the market of $80 billion with $45 billion in hardware and $35 billion in software by 2025. On the high-side, the market for VR tech could reach $182 billion... that's 30% more than Apple iPhone sales over the past year. It's also three-times the global tablet market and more than 15x the $11.6 billion gaming market.

The smart money is already getting in on the next generation of VR players. Venture capital firms have bet $3.5 billion on VR startups in just the last two years. Google-parent Alphabet (Nasdaq: GOOG), Facebook (Nasdaq: FB) and Sony (NYSE: SNE) have all spent heavily on VR with their own products.

But these mega-cap companies are poor bets on the booming space. Each has diversified revenue streams and VR represents little more than a blip in their sales forecasts.

The more focused bet will come from smaller companies with sales that could explode as they grab market share as VR hardware or software players.