A lot has changed in the immersive experience market category. Virtual reality hit the market hard with major manufacturers like Oculus, Samsung, and HTC releasing their headsets. Developers quickly picked up what the manufacturers were putting down and began building scores of applications for these ecosystems. To this day, it is still up in the air which will be the market leader. While this VR race was happening, Augmented Reality hit the scene hard in 2017. Apple released ARKit, effectively turning every iPhone into an Augmented Reality handset. Google answered back with ARCore serving the same purpose for Android phones. Those who were placing bets on which VR headset would be the leader missed the mark as Mobile AR became poised to take over the market share in the coming few years.
According to Digi Capital, the VR/AR market will reach $108bn by 2021. Of that, a whopping $83bn could be attributed to AR including both mobile and smart glasses. That is a huge deal in light of mobile AR — a major uptake driver — just becoming mainstream via ARKit, ARCore, and Facebook Camera Effects in Q4 2017. The numbers are shocking, even with the “new and shiny” factor. Mobile AR is “set to have over twice the installed base at launch in 2017 than the entire AR/VR headset market by 2021” according to Digi Capital. So where do these numbers come from and how did this happen?
The VR market has faced a number of challenges. The main challenge is that many headset VR apps require a high-powered computer to work. In some cases, they even require tracking tripods to be placed for the optimal experience. This means that the average consumer isn’t able to set it up without the proper equipment, space, etc. making the bar too high for mass uptake. Another core issue was VR sickness. Earlier headsets caused a number of reviewers to get sick due to frame rate issues. While this was worked out in most cases, many buyers aren’t interested in laying down $1000+ for something that they might wind up sick using. Newer entrants to the market like Google Daydream View and Playstation VR have lowered the barriers to entry but still have not achieved critical mass.
Tim Cook, Apple’s CEO has gone on record saying that they are investing heavily in AR. The release of ARKit means that all compatible Apple devices will immediately become AR Ready. The release of the iPhone X in November will only improve the quality of the experiences. Already, many developers are clamoring to build the best ARKit-powered augmented reality apps but none have yet emerged as a killer app. Google was a fast follower with the release of ARCore. ARCore enables much of the same functionality as ARKit but for Android devices. Unfortunately, this release has temporarily lowered excitement for their Tango offering which promised the ability to better track indoor device position. The Asus Zenfone AR was an unfortunate casualty in this war of technology.
As the market matures, it will be interesting to see which devices, headsets, and apps capture the imagination of users. There is no shortage of investment in hardware, software, or even AR development tools. We’ll be keeping our eyes on this market so be sure to sign up for our newsletter in the sidebar.
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