Augmented Reality – A New Multi-Billion Dollar Industry Is Born This Month

By | September 8, 2017

Tech giant Apple released their augmented reality developers kit software – ARKit – for the iPhone earlier this summer.  Developers around the world have embraced the platform to the extent that it’s predicted that there might be tens of thousands of augmented reality apps waiting and ready for the release of the new iPhone in a few days time on September 13th.

Unlike the sluggish growth of virtual reality, augmented reality – which blends the virtual and real worlds rather than immersing the viewer completely – is set to explode into a multi-billion dollar industry right from the starting gun.  Clearly, the investment opportunities are immense and immediate.

AR revenues are likely to dwarf that of virtual reality very quickly.  Thousands of AR apps on the new iPhone will create an overnight market of millions of consumers. What’s more, Google is following Apple very closely and has also released its own dev kit – ARCore – intending to have AR apps on millions of its Android powered smartphones by the end of this year.

Why are Apple, as well as Google, racing to be leaders of an industry that barely exists yet (even the Pokeman Go craze was not true AR)? An article today in Forbes – Why Apple Will Win the Augmented Reality Race – gives a few pointers, as well as placing its bets on Apple being the ultimate victors :

This hardware and software integration needs to incorporate elements of machine learning, computer vision, and 3D depth sensing to comprehend the dimensions of a user’s local playspace. Moreover, to do this at scale in a multi-user or multiplayer manner, different AR smartphones will need to communicate with each other and make sense of what is happening in the same space, in real time. With its “closed garden” approach to hardware and software integration, Apple has a strong competitive advantage from the start. In contrast, Google’s fragmented ecosystem will only make it harder for them to compete at scale.

ARKit is a springboard that Apple will use for a much larger push into AR. However, Cook has kept his cards close to his chest about his specific plans for the medium. It would make sense to begin with the iPhone—it is a mass-market device and, with the introduction of ARKit, much of the heavy lifting for building AR apps has been removed for iOS development teams.

Introducing AR into a billion smartphones would also give Apple the opportunity to learn about user behavior and experience. The company could then use that insight to build a long-term plan for its rumored “Apple Glasses.” Apple is methodically laying the groundwork for a closed ecosystem of hardware, software, developers, tools, and consumers—in typical Apple fashion.

Another interesting article today looked at how Apple will make money from AR advertising, which will be very different to standard model of ads on mobile :

Mobile ads are annoying in general. But it’s particularly hard to imagine playing an AR game in a multidimensional world and being interrupted by a video, interstitial or pop-up ad. Nor do existing ad types work for developers who want to promote a game in another app…

…Zweig thinks he has the solution. Two years after selling mobile ad company AdColony for $350 million, Zweig created AppOnboard in 2016 with the idea that people would rather play an ad than watch one. With AppOnboard’s technology, developers can advertise their games in other apps through a demo that lasts 15 to 30 seconds.

For example, if you’re playing an adventure game and struggling to get past a certain spot, you may have the option of taking a few swings in a baseball app as a way to get to the next level. At the end of the short trial, you’re given the option of downloading the app or returning to the game you were playing.

AppOnboard, which to date raised $4 million in venture funding, has several existing mobile games using the try-before-you-buy model. For the launch of ARKit the company has partnered with Snatch, a virtual treasure hunt app, and gaming studio Lucid Sight.

Augmented and virtual reality together are predicted to form a $160 million industry by 2020. But it’s expected that AR will start to far exceed the value of VR by that point. AR isn’t just good for games, it’s also going to quickly become fundamental to product design, healthcare, and e-commerce.

How Augmented Reality is going to transform e-commerce

On July 25, Amazon published a patent on Augmented Reality Presentation, giving a hint as to what’s to come from the ecommerce giant. The illustration shows users’ “trying on” watches in AR as they shop online. The examples are endless, from scanning a room and having a real-time home decorator analyze what would look best, to being notified of sales as soon as they’re available…

…What this boils down to is the point of entry. Quite simply, if I’m able to look around my apartment or office for things to buy and Amazon is the first to have the best system for it, why would I look to anyone else’s online inventory? Digging through different AR apps is going to be a lot different than shopping online regarding retention, which will be a huge factor in defining how successful the experience will be.

Related: 5 VR and AR Startups Ready for Explosive Growth

For smaller businesses to grow their market share in the ecommerce world of AR, they’re going to have to start getting creative with the specific types of solutions they offer. After all, you’re going to be able to bring your product into someone’s home and visualize how it fits into their lifestyle, which is groundbreaking. Luckily for brands and influencers, new tools, including my company Blendar’s proprietary platform, are emerging, making it easier than ever for organizations to deliver more engaging experiences right to their audiences.

Augmented Reality could be worth $165 million by 2025. Ultimately, Apple has to win the AR race because most tech gurus, including Apple CEO Tim Cook himself, predict that augmented reality will replace the smartphone and therefore the iPhone.

It’s an auspicious moment for Apple to move into augmented reality. The global market for AR products will surge 80 percent to $165 billion by 2024, according to researcher Global Market Insights. But Apple really has no choice, says Gene Munster, a founding partner at Loup Ventures who covered the company for many years as an analyst. Over time, Munster says, AR devices will replace the iPhone. “It’s something they need to do to continue to grow,” he says, “and defend against the shift in how people use hardware.”

Finally, an essential article from VentureBeat suggests six ways to invest in AR :

1 # Bionic Vision“The holy grail of AR is to enable graphical information to be indistinguishable from natural vision,” he said. “To achieve this, advancements in lightfield, retina projection, photorealistic rendering, adjustable focus and natural vergence and accommodation are needed.”
2 # Natural input/output (I/O) and interactionNew inputs such as eye-tracking, gesture recognition, and voice move the technology beyond touch-and-tap to provide a more natural means of interacting with the augmented world. At the same time, haptics, augmented audio, and emotion tech solutions are required to make the virtual feel immersive
3 # 3D-ifying the real worldThe real shift behind this next wave of computing is the move from 2D to 3D computing. This requires solutions that can scan, capture, track, and recognize the 3D world.
4 # World buildingthis will require a new set of tools that allow quick capture and modification of content from the real world, and well as intuitive creation of new content. Content creation and authoring tools, tools to measure and optimize the user experience, and solutions that manage the versioning, quality assurance, optimization, and workflow between team members of 3D content represent just a few of the opportunities to equip AR content creators.
5 # TelepresenceEach wave of computing follows a similar pattern to the last, so if we are to take cues from the web and mobile era, we can expect that one of the killer apps for AR will be communication and collaboration, Emrich said. Immersive communication, large-scale social experiences, and communicating with remote people as if they were in the same room are just some of the opportunities we can expect AR to usher in.
6 # Super intelligenceSolutions that enable knowledge-sharing, the utility to a specific vertical — such as construction, oil, mining, or retail — and even workplace productivity tools are great opportunities for investment today.

Another way to invest in AR is to purchase augmented reality domain names.