Augmented Reality Marketplace


Augmented Reality Marketplace










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Augmented Reality Marketplace

by James G. Barr

Copyright 2020, Faulkner Information Services. All Rights Reserved.

Docid: 00021141

Publication Date: 2002

Report Type: MARKET

Preview

The basic concept of augmented reality is to superimpose graphics, audio,
video, and other "sensory enhancements" over a real-world environment in real
time, thus presenting an enhanced view of that environment. For
example, some AR apps enable smartphone users to
employ their phone’s camera and GPS capabilities to gather intelligence about
the surrounding area, such as the location of stores and restaurants, and
overlay that information on the phone’s screen. Still in its relative infancy, the
augmented reality market is expected to explode in coming years.

Report Contents:

Executive Summary

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Football fans are familiar with the effect – displaying an imaginary line
on the field to indicate how far a team must move the ball to gain a first down – but they may not be aware of the underlying
technology. It’s called "augmented reality" (AR).

The basic concept of augmented reality is to superimpose graphics, audio,
video, and other "sensory enhancements" over a real-world environment in real
time, thus presenting an "augmented" or enhanced view of that environment. There are AR applications (apps), for example, that enable smartphone
users to employ their phone’s camera and GPS capabilities to gather intelligence
about the surrounding area, such as the location of stores and restaurants, and
overlay that information on the phone’s screen. In fact, the principal
instrumentation that facilitates the use of AR, at least today, is the smartphone.

For enterprise
decision makers, there are key things to know about augmented reality:

  • First, AR is a foundational, mainstream technology.
  • Second, AR is an enterprise tool for mobile business
    process support, customer engagement, and brand building.
  • Third, managing, freshening, and
    exploiting the data that drives AR smart systems, accelerates consumer
    buying decisions, and recruits new customers is a mission critical enterprise task.1

Market Dynamics

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Augmented reality can be
loosely defined as a live view of the real world which is enriched by
overlaying, interleaving, or narrating additional information about the scene
the viewer is observing. High profile applications of augmented reality
technology are familiar to most sports and movie fans. The
superimposition of the first down yardage line on a football field crowded
with players and officials seems so natural to most TV viewers that they take
it for granted, even though the green and yellow lines move fluidly with game
play. The film Avatar, one the biggest cinematic earners of all time,
made extensive use of AR to merge real and virtual worlds.

Augmented reality technology has
also been widely employed in industrial and research applications to generate
precise virtual prototypes from 2D plans and images. Think, for
example, of holding a blueprint in front of a Web cam and seeing the building
grow from it, photo-realistically rendered, perfectly illuminated,
tastefully decorated, and nestled in mature landscaping. Such industrial
strength applications of AR have more than proved their worth in high risk,
complex processes like manufacturing and construction, but have made limited
inroads in terms of sheer numbers of users because such projects demand
substantial investment in highly specialized labor and computational power.

Today, however, we are on
the threshold of a dramatic inversion of this equation for two
reasons:

  • First, as software engineers become better at designing systems that
    fully utilize multi-core, multi-threaded processors, AR technology is
    finding its way onto significantly less costly computing platforms.
  • Second, as mobile phones and tablet devices have become globally
    ubiquitous computing environments, efforts to make mobile AR a reality have
    ramped up dramatically with some impressive early consumer oriented
    successes.

Look for AR apps to become
mainstream consumer technology on smartphones. User population
growth and revenue for AR technology will very
likely track with the general availability and adoption of AR capable mobile
phone handsets. At a minimum, an AR enabled mobile handset will have these
features:

  • Digital compass for determining bearing
  • Accelerometers for sensing motion and
    dynamically determining position in space
  • GPS functionality to enable the device to
    register itself on location grids
  • High quality video and still imaging

AR Awareness/Acceptance Is Growing

According
to Seabery Augmented Technology:

  • AR should boast 1 billion users by 2020.

  • AR revenue should be four times higher than revenue from
    Virtual Reality (VR) by 2020.

  • An ISACA survey reveals that 60 to 70 percent of consumers see clear
    benefits in using AR at home and at work, 69 percent see advantages in personal
    education, 62 percent in shopping, and 62 percent in healthcare.2

Enterprise Use Cases

According to analysts at TechRepublic, augmented reality
offers opportunities for business users:

"Remote support – In some cases [AR] apps allow tech support to highlight objects in the user’s field of view so they can assist in repair without ever having to leave their seats. AR headsets
[can] connect to Internet of Things (IoT) sensors and other diagnostic
information to help technicians assess repair needs more
quickly and reduce downtime.

"Training and education – Seeing 3D
representations of objects, zooming in and getting an
exploded view, and seeing complex machines working from the
inside are all ways in which AR can be used in the
educational realm. AR can also be used for virtual
collaboration, making it easier for students and teachers
working separately to solve problems together.

"3D modeling – Whether building a house or designing a new car, AR can be used to aid in the
modeling and design process. Apps exist that can import and
display CAD files in real space, see 3D models of houses,
and more.

"Keeping customers in a store – People may not be at your store to shop, but games can keep them hanging around, which could lead to a sale.
Cosmetics company Sephora has been at the cutting edge of customer-focused AR as well: It has a mobile app for virtually trying on makeup and in-store AR kiosks that keep people shopping."3

From Augmented Reality to Mixed Reality

To help create a more immersive experience for users,
some developers are pursuing the convergence of augmented
reality (AR) and virtual reality (VR), a combination called
mixed reality (XR).

While still in its nascent stages, nearly 90 percent of
businesses surveyed by the Harvard Business Review are
exploring, piloting, or deploying mixed reality. The
majority (69 percent) say mixed reality is crucial to
achieving their organization’s strategic goals.4  

Market Leaders

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The prominent players in the augmented reality – and, increasingly, the
mixed reality – market are Apple, Google, Microsoft, and Magic Leap.

On the software side:

Apple offers ARKit, an AR platform for iOS devices. ARKit
"[integrates] iOS device camera and motion features to produce augmented reality
experiences in [a user’s] app or game."

Correspondingly, Google
offers ARCore, an AR platform for Android devices. Using
different APIs, ARCore enables phones to "sense [their] environment, understand
the world, and interact with information." Some of the APIs are available across
Android and iOS to allow shared AR experiences.

On the hardware side:

Microsoft offers the HoloLens 2 headset. The HoloLens 2, shown
in Figure 1, is a self-contained computer with Wi-Fi connectivity for maximum
portability.

Figure 1. Microsoft’s HoloLens 2

Figure 1. Microsoft's HoloLens 2

Source: Microsoft

Magic Leap offers Magic Leap 1, a wearable "spatial" computer
shown in Figure 2. "By placing the processing power on [a user’s] hip instead of
[his or her] head, Magic Leap 1 delivers the performance of a laptop … in a
device that’s light enough to wear every day."

Figure 2. Magic Leap’s Magic Leap 1

Figure 2. Magic Leap's Magic Leap 1

Source: Magic Leap

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Market Growth

MarketsandMarkets reports that the augmented reality market, valued at $11.14 billion in 2018,
should reach $60.55 billion by 2023,
for a compound annual growth rate (CAGR) of 40.29 percent during the
forecast period.5

Market Drivers

  • "Huge potential opportunities in biotechnology and healthcare" are expected to
    propel AR growth.
  • The availability of cloud options allows users
    to address the scalability limitations of on-premise AR implementations,
    thus promoting AR adoption.
  • Developers are generating more smartphone-compatible
    content and tools, with many featuring photorealistic AR.
  • Globally, the US is dominating the AR market, owing to the innovation of
    US producers. "About 64 percent of [US] consumers … believe in the
    positive [impact] of AR in the workplace."6

AR Predictions

AR development company Mozenix predicts that in the near-term:

"AR will continue to outperform VR
– One of the biggest barriers to VR adoption has been the fact that heads up
display (HUD) devices … require an expensive, high powered desktop PC
counterpart to run games and applications.

"Brands will go big on AR technology
– Ikea launched
its flagship augmented reality app that enables consumers … to drop 3D
furniture objects within the home by using the camera of a smartphone or
tablet.

"Mobile AR will go mainstream
– Mark Zuckerberg suggested that, ‘the phone is probably going to be the …
consumer platform where a lot of … AR features become mainstream, rather than
a glasses form factor that people will wear on their face.’

"Replacement cycles will be AR’s secret weapon"
– AR will help
"[revitalize] stagnant" smartphone sales by providing consumers with new
augmented reality features and functions.

"AR will overcome the ‘novelty app’ stereotype – There is still a
widespread perception that AR technology is a novelty and that apps such as
Pokemon Go and Snapchat filters represent the full capabilities of AR. AR will transcend novelty status and become a serious technology
consideration for software development managers and CTOs."7

2020 Trends

Analyst Jeremy Horwitz foresees the following 2020 developments:

"Improved hardware – Throughout 2019, the components necessary to
create better AR hardware began making their way into the marketplace, most
notably including smaller and/or higher-resolution displays and new chipsets
custom-designed for AR and mixed reality devices. In 2020, we can expect more of
these components to make their way into actual products.

"Better mobility with new wireless tech – Another big theme throughout
2020 will be freeing AR users from the constraints of current headsets – bulky
head-worn hardware or nearby tethered computers – in favor of more robust
wireless solutions.

"More and better AR software – Encouraged in part by continued pushes from Google (ARCore) and Apple (ARKit),
third-party developers have spent the last year working on more consumer AR
software. A broadening interest in AR will lead to teleconferencing, navigation,
and other tools that will also be useful for enterprises.

"Dedicated AR hardware makers are also developing new software – Magic
Leap recently refocused its attention on enterprise applications, suggesting
that its pivot from consumer to enterprise users had been quietly in the works
for some time."8

Outlook

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Smartphones and the apps
that run on them have become globally ubiquitous, and these devices are
actually little more than an aggregation of sensors attached to a radio
transceiver. High end smartphones embed best-of-breed imaging devices,
environmental sensors, GPS, accelerometers, compasses, and more, all of which
are continuously collecting data. This data is being pumped back uphill
into the networks to which the phones are connected, providing the building
blocks of a pervasively-aware, constantly-refreshed digital copy of the real
world. Data, appropriately processed and stored for later access,
equals power. And a lot of data equals a lot of power, which can be
marshaled to create and drive AR experiences.

Concomitantly, advances
in data science, mobile technology, and display engineering are sort of a
science-fair-perfect-storm. Augmented reality technology and the AR
marketplace is forecast to grow rapidly in this rich environment, and is already
seeing enthusiastic proof-of-concept activity from multi-media marketing
innovators.

Legal Concerns

Much of the effort
necessary to produce consumer and enterprise AR applications is focused on
creating huge, comprehensive databases that aggregate location and
descriptive information. Without a lot of imagination or expense, it is
possible to use public information to geo code, or tag, homes,
businesses and the like with information about who lives or works
there. There is currently no way property owners can find out if their
home or business is tagged in geo location databases or who has access to the
information. There is also no way to refuse tagging or to request that
an existing tag be removed. Similarly, users who voluntarily allow themselves
or their vehicles to be tagged (via mobile device) have no way of knowing how
long such tags might exist and who might use accumulated movement data.

Annotating the World

In evaluating AR initiatives, analyst
Alexis Madrigal observes that "the hardware (transparent screens,
cameras, batteries, etc) and software (machine vision, language
recognition) are starting to look like the difficult but predictable
parts. The wildcard is going to be the content. No one publishes
a city, they publish a magazine or a book or a news site. If we’ve
thought about our readers reading, we’ve imagined them at the breakfast
table or curled up on the couch … or in office cubicles running out the clock. No one knows how to create
words and pictures that are meant to be consumed out there in
the world." In other words, what parts of the digital world will be use to
annotate the physical world?9

References

    1 "Global
    Augmented Reality (AR) Market Forecast by Product (HMD, HUD, Tablet PC,
    Smartphone) for Gaming, Automotive, Medical, Advertisement, Defense, E-learning
    & GPS Applications (2011 – 2016)." Research and Markets. November 2011.

    2
    “7 Augmented Reality stats that will stun you.” Seabery Augmented Technology. January 10, 2018.

    3 "Augmented Reality for Business: Cheat Sheet." CBS Interactive
    Inc. 2020:4-5.

    4 Macy Bayern. "10 mixed reality trends to expect in 2020."
    Innovation | CBS Interactive. January 31, 2020.

    5 "Augmented Reality and Virtual Reality Market by Offering
    (Hardware & Software), Device Type (HMD, HUD, Handheld Device, Gesture
    Tracking), Application (Enterprise, Consumer, Commercial, Healthcare,
    Automotive), and Geography – Global Forecast to 2023." MarketsandMarkets.
    February 2018.

    6 "Augmented Reality Market – Growth, Trends, and Forecasts
    (2019 – 2024)." ResearchAndMarkets. March 2019.

    7 "Top 5 Augmented Reality Trends 2018." Mozenix.
    2018.

    8 Jeremy Horwitz. "4 enterprise AR trends to watch in 2020." Venture Beat.
    December 27, 2019.

    9
    Alexis Madrigal. "The World Is Not Enough: Google and the
    Future of Augmented Reality." The Atlantic Monthly. October 25,
    2012.

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About the Author

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James G. Barr is a leading business continuity analyst and
business writer with more than 30 years’ IT experience. A member
of "Who’s Who in Finance and Industry," Mr. Barr has
designed, developed, and deployed business continuity plans for a
number of Fortune 500 firms. He is the author of several books,
including How to Succeed in Business BY Really Trying, a member
of Faulkner’s Advisory Panel, and a senior editor for Faulkner’s
Security Management Practices. Mr. Barr can be reached via
e-mail at jgbarr@faulkner.com.

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