Mobile AR Investment Points to a Strong 2019 for the Platform

Mobile AR continues to expand and capture the attention of the AR market in 2019. The new year began with encouraging announcements regarding the future of AR that will affect both consumers and enterprises. Recently, the investment fund Candy Ventures acquired Blippar’s platform along with the assets of Layar, a start-up that Blippar had acquired earlier. Candy Ventures has announced that Blippar will continue operation under the same name while they focus on developing their software as a service (SaaS) AR creation and publishing platform (Blippbuilder) to target simplified content creation. Blippar had a range of mobile AR applications across the retail, navigation, education, and gaming content industries, and this acquisition can allow for further exploration and expansion in these areas for mobile AR. Magic Leap’s ongoing interest in expanding into mobile devices also suggests strength in the market, with the potential for shared AR experiences between mobile devices (iOS, Android) and Magic Leap head-mounted hardware. In addition, venture capital firm IVP recently announced a US$245 million investment in Niantic, the AR company behind Pokémon Go, which plans to release the new AR game Harry Potter: Wizards Unite in 2019.

Meanwhile, platform and software providers continue to focus on optimizing their mobile AR services by adding new elements and providing more opportunities for mobile AR content that target both consumers and enterprises. For example, Wikitude included a new feature (Extension of Object Target) that can improve tracking and recognition of 3D objects and scenes, enabling users to extend an object target with extra images after initial creation. In addition, Unity is expanding their brand advertising and experiences tech with AR and VR advertisement support embedded in content, allowing users to interact with them or be handed off to an app store for in-app purchases (IAP). Unity’s monetization service provides opportunities for increasing revenues via in-app purchases and AR games.

Apple’s and Google’s AR SDKs (ARKit and ARCore) continue to play a catalytic role in the growth of mobile AR, allowing developers to build AR applications in a time- and cost-efficient way while exponentially growing the hardware install base for AR. In addition, technological advancements in mobile devices features, such as cameras, displays, and graphics, in combination with greater audience acceptance for AR applications, encourage developers to optimize their applications by adding new elements for creating more realistic experiences and expanding their content. The mobile AR ecosystem will continue to flourish with proven value both to consumers and to businesses. The latest investments confirm the potential of AR in both of these markets.

Retail and marketing will dominate in consumer-oriented mobile AR applications as customers gain access to a range of products they can deeply explore and virtually try by using their mobile phone or tablet before proceeding to purchase. More and more businesses within fashion, cosmetic, automotive, furniture, and home design aspects are digitizing their products and building AR applications that allow their customers to make better decisions, especially in regard to their online purchases. In addition, AR technology is a promising marketing tool, as it allows higher levels of customer engagement and interaction and a more personalized approach to the customer in comparison to traditional marketing tools.

Moreover, Niantic’s recent funding draws attention to the mobile AR gaming experience. Developers can enrich game concepts with educational content and outdoor activities, and new opportunities will continue to present themselves with things like machine vision improvements and 5G rollout. Monetization is always an important question, especially for novel content types, and so Unity’s new monetization options for AR and VR are a boon.

Business-oriented mobile AR applications for employee training and support can guarantee enhanced task efficiency and reduced costs; remote assistant will remain one of the most valuable AR applications for businesses. Employees leveraging mobile/tablet devices can accelerate diagnostic processes, reduce downtime, get real time access to documentation and support from experts, and more. While head-mounted devices (HMDs) can also offer hands-free access to these features, the cost and implementation considerations for HMDs are often prohibitive, and mobile devices can fill that gap. So long as the technology is sound, an AR hardware, software, or platform offering can find a home, as seen with Blippar.

In accordance with ABI Research’s latest database, currently 83% of AR usage is on mobile/tablet devices with the remaining usage done on HMDs. Mobile AR applications are expected to continue to hold the majority of use over the next five years, though the gap between mobile devices and smart glasses will surely decrease. Mobile AR applications will remain a cost-efficient and user-friendly solution for businesses and consumers in comparison with HMDs, and mobile devices will maintain other advantages thanks to being a mature hardware market—advancements in cellular connectivity (5G), displays, and processing have been progressing steadily, and these components can significantly enhance AR/VR experiences as well. Some use cases require hands-free access or will always favor HMDs, but whenever hands-free is not a requirement, mobile devices can be utilized. ARKit and ARCore, along with competitors and partners, provide more opportunities for a broader variety of content and applications in comparison with the HMDs that need specialized developers to build applications suitable for various hardware platforms.

All in all, the choice between a mobile device/tablet and an HMD mainly depends on the purpose and complexity of the use case, the size of the organization (in case of business-oriented applications), and, undoubtedly, the available budget, but even in large scale organizations mobile AR solutions are more preferable because they offer the same capabilities as HMDs in most use cases at a lower cost. On the consumer side, until the value of ubiquitous smart glasses usage is proven, mobile devices will offer more compelling and realistic AR opportunities across use cases.