Augmented Reality in 1H 2018: Remote Expertise, the Augmented Reality Cloud, and Real Mobile Capability

The Augmented Reality (AR) market has proven to be both fast moving and somewhat predictable. The rate of new announcements is staggering, but at the same time, there hasn’t been anything resembling a revelation in quite a while. In the enterprise sector, where the large majority of AR activity still resides, remote expertise dominates as a use case. Other use cases stem from similar functionality, such as training, but the core conversations in AR are driven by Return on Investment (ROI), and so far, remote expertise is the biggest ROI driver in AR. For consumers, mobile devices dominate the field, with both Google and Apple investing continually in their AR mobile Software Development Kits (SDKs). Without the pull of ROI for businesses, consumers are left in an odd place, waiting for compelling content to hit their devices, while content creators are waiting to develop content for a wider market. It is very similar to what is being seen in the Virtual Reality (VR) market, with content creators hesitant to develop for a niche device, and buyer’s hesitant to buy a niche device without a strong base of content.

Even so, there have been a number of interesting developments in the market. New players in the remote expertise field have cropped up, with broader platform players continuing to receive investment and looking to branch out in device, use case, and vertical targeting. The efforts of Apple and Google have spurred some content creation efforts as well. As evidenced by ABI Research’s market forecasts, the inflection point for the AR market is comfortably in 2019, leaving the latter half of this year for the beginning of that upward trend to really be seen.

While there are more hardware players active than last year, not much new has been revealed in 2018. If you’re targeting ROI in enterprise, you’re targeting remote expertise as the leading use case, which has simple hardware requirements: bare minimum one-way video, two-way audio, and optional value adds like annotation and built-in data logging. When companies are presented with the high Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) associated with AR, especially head-worn AR, they will more often target lower-cost devices that can deliver this experience well enough to see results. The dominant hardware conversations of 2 years ago, with concerns around field of view and tracking/mapping accuracy, have been overshadowed by this. That’s not to say these discussions no longer exist, but the majority of actual AR activity doesn’t cross into that realm. This will change over the next 5 years, as visually-focused use cases come into focus, but that’s not where the market is currently. Hype surrounding Magic Leap and its mysterious light field product is declining, although the product is inching toward release. Questions arounds its capability, content offerings, and usefulness mar an otherwise exciting hardware venture. This expands to other companies in the light field space as well; Avegant has slashed staff after debuting a light field prototype headset and Lytro has been broken up with some employees going to Google. While light field is only one segment of the AR market, the technology is interesting and potentially revolutionary for AR, VR, and even the traditional video space, so a lack of progression is disconcerting.

There are highlights as well though. Google’s ARCore 1.2 presents an early but surprisingly future-proofed look at the company’s AR plans, while hinting at wider market trends as well. Combined with the wider launch of Google Lens, the foundation for a possible Google Glass 2.0 for consumers is clear. Market understanding is higher than it was around the initial launch of Glass and Apple is itching to release a head-worn product as well. While only two companies, these two can drive the overwhelming majority of a market with relative ease.

As for the AR cloud, this is more nebulous. The AR cloud can mean a number of things: a central content repository or a simultaneous multi-user feature set have been most prominent. Google’s ARCore 1.2 update attacks the latter, with “cloud anchors” for real-time multi-user location tracking and object placement allowing for shared experiences. Apple’s ARKit 2 marketed similar functionality with multi-player gaming experiences, but the experience is very similar between the two.

The other way of looking at the AR cloud is as a central repository for content. In a world with ubiquitous AR usage, content creation, distribution, and protection become much more serious and difficult topics. User experience is ruined when every experience requires a separate app download. Browser-based AR is one solution to this, with players like Mozilla and Google pushing web-based platforms, such as WebXR. While WebXR will help streamline the user experience, there still needs to be a way to access whatever content a user wants at the time. This is where a central AR content repository could fit, perhaps with integrated tools or Application Programming Interfaces (APIs) for third-party platform creation and distribution. Tying in user location or habit data is a compelling add-on to this, opening up targeted content delivery similar to what is being done in the video space for recommendations and targeted advertising.

To break that waiting game, many point to the need for a killer app to attract consumer interest and lend a sense of maturity. While this is a possibility, the more likely scenario is a gradual, but sustained increase in quantity and quality of AR experiences and devices across consumer and enterprise sectors, allowing the market to grow at an appropriate pace and easing users into it.