ABI Research Anticipates “Dramatic Growth” for Augmented Reality via Smartphones

Augmented Reality (AR), the overlay of graphics onto a video stream or other real-time display, has existed for more than 15 years, with customized applications in industrial automation, theme parks, sports television, military displays, and online marketing.  Recently, an entirely new mass market has opened up in mobile handsets, due to the availability of video cameras, processors, GPS data, compasses, and accelerometers on smartphone handset platforms. In particular, personal navigation applications for the Apple iPhone and Android platforms have seen strong early adoption, due to the intuitive nature of the real-time display.

According the ABI Research study “Augmented Reality: Adding Information to Our View of the World”, handheld platforms will transform the Augmented Reality ecosystem, with revenue associated with Augmented Reality growing from about $6 million in 2008 to more than $350 million in 2014. As advertisers learn to insert tags into navigation displays, mobile advertising revenue will grow slowly, representing a large portion of sectoral revenues in the 2013-2014 timeframe.

“The new capabilities of handset platforms create an explosive opportunity for Augmented Reality technology,” explains study author Joe Madden. “Existing technology suppliers will have to adapt, as rapid growth will transform the Augmented Reality ecosystem. Today’s customized, direct business-to-business AR supply chain will continue to see incremental growth in military, automotive, and entertainment applications, but those businesses will be overshadowed by the mass-market dynamics of mobile handset application sales and advertising revenue streams.”

The study envisions the development of global databases to store a wide variety of geo-tag information. Governments, businesses, and individuals all will contribute information into such databases, so end-users will be able to view information on notable buildings, retail sales, or special events, or simply to mark locations of interest.

Mr. Madden notes that technology advances are still required for Augmented Reality applications to proliferate. “GPS location accuracy is not adequate currently for many applications, requiring additional techniques to refine location precision for shopping applications, or for game applications in which virtual objects must be placed precisely on the display near corresponding real objects.”

This report is published under the Human-Machine Technology Research Service, which is a part of NextGen, the ABI Research emerging technologies research incubator.