Consumer Smart Glasses Gain Incumbent Traction with Facebook and Will Comfortably Grow into Enterprise

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By Eric Abbruzzese | 2Q 2020 | IN-5790

Facebook has been on record with its Augmented Reality (AR) activity, and some high-level plans, for a while now, but recently a hardware component that has been cemented for the company through display manufacturer Plessey is currently focused on MicroLED manufacture, which is seen as a next-generation display option after Liquid Crystal Display (LCD) and Organic Light-Emitting Diode (OLED), and has been a partner for other notable AR names like Vuzix. A manufacturing agreement like this is not uncommon among the smaller AR Original Equipment Manufacturers (OEMs) but is so far unique among the heavy hitters like Facebook. Apple has made hardware acquisitions, but no confirmed manufacturing agreements are known, and equally little is confirmed around what an Apple AR Head-Mounted Device (HMD) will look like. This agreement includes a rare confirmation—or at least a strong likelihood—of what Facebook’s hardware will include, offering a glimpse into future efforts from not only Facebook but also other major operators.

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Display Commitment from Plessey for Facebook Augmented Reality

NEWS


Facebook has been on record with its Augmented Reality (AR) activity, and some high-level plans, for a while now, but recently a hardware component that has been cemented for the company through display manufacturer Plessey is currently focused on MicroLED manufacture, which is seen as a next-generation display option after Liquid Crystal Display (LCD) and Organic Light-Emitting Diode (OLED), and has been a partner for other notable AR names like Vuzix. A manufacturing agreement like this is not uncommon among the smaller AR Original Equipment Manufacturers (OEMs) but is so far unique among the heavy hitters like Facebook. Apple has made hardware acquisitions, but no confirmed manufacturing agreements are known, and equally little is confirmed around what an Apple AR Head-Mounted Device (HMD) will look like. This agreement includes a rare confirmation—or at least a strong likelihood—of what Facebook’s hardware will include, offering a glimpse into future efforts from not only Facebook but also other major operators.

Broader than Just Facebook and Just Consumers

IMPACT


Consumer glasses share several key advantages that enterprise HMDs also strive for: low price, streamlined User Experience (UX), and valuable content. Without those elements, a device is destined to fail. Price is more flexible on the enterprise side, but is still a significant obstacle at current prices; even the lower cost monocular devices popular in the enterprise space have crept up above US$2,000 on average. No consumer product can launch at that price point, with prices more in line with smart watches a target. After price comes usability, which is another area that has been more of an afterthought so far in enterprise; objective Return on Investment (ROI) drives investment, despite potential UX pitfalls. Content is one area where enterprise has some advantage, with tailored content a requirement for many implementations; the universal nature of consumer content and use cases is more limiting and more challenging to cater to. These dynamics open an incredibly compelling opportunity for both enterprise and consumer sides of the AR market as hardware sees usage across these areas.

Regarding specific hardware usage, the Plessey and Facebook partnership does showcase the value of MicroLED. While manufacturing feasibility, price, usability, and more need to be proven, initial improvements are promising. MicroLED displays are similar to OLED but are thinner, brighter, and more power efficient, ideal for outdoor and other high-brightness situations. Facebook’s likely AR use cases are not difficult to guess, with some hints at a phased approach including two devices of increasing capability, but obviously the social network (and connecting people globally) will be front and center. For instance, Facebook’s AR wearable may combine the user’s environment and holograms of Facebook friends/connections, allowing immersive social interaction, video calls, or gaming experiences. At the same time, Facebook’s recent acquisition of Scape Technologies, which specialize in computer vision and 3D map creation, in combination with MicroLED suitability for outdoor usage, indicate that location-based experiences create a compelling AR Cloud story for the company. Facebook is heavily involved in broader media and entertainment ventures as well, which will certainly see some action in AR. The tie in with Oculus is especially interesting—while nothing is confirmed, general market movement toward Mixed Reality (MR) leaves an enticing opportunity to leverage the Oculus brand, development platform, and content distribution ecosystem in some form. Instagram is another behemoth that very neatly fits into an AR story. Broader consumer use cases are more nebulous, with anything from simple heads up notifications to full-fledged immersive MR experiences on the horizon. These use cases have vastly different hardware requirements, so the hardware story is not as clear more broadly.

This concrete announcement is likely to spur other announcements in the space, both in hardware and manufacturing as well as the rest of the value chain. Apple’s HMD activity is still nothing but rumors and confirmed acquisitions, but their recent iPad Pro refresh brought Light Detection and Ranging (LiDAR) sensors to the device, which is a compelling hardware progression for the company. Apple has been a leader in the mobile AR space for a few years now, outpacing closest mobile rival Google (and more broadly Android) from Software Development Kits (SDK) through Operating Software (OS) and now hardware, too. Look for the common Apple competitors to follow suit: Samsung and Huawei are already active with AR hardware development, and Google still operates the Glass program.

Look for Broader Value Chain OS Opportunities

RECOMMENDATIONS


Over the next 12 to 24 months, the rate of notable consumer AR announcements will increase from operators both big and small. Some will be hardware announcements and agreements, like with Plessey and Facebook, and others will be in house hardware additions, content creation and development enhancements, OS and platform integrations, and service partnerships.

Recognize where opportunity lies across these areas; AR is rife with experimentation and piloting, even after years of small-scale Research and Development (R&D). Understand what new opportunities exist as consumer and enterprise overlap more and more, across all areas of the value chain: hardware, software, and services. The benefits of “consumer” hardware are quite clear, but there are potential drawbacks in ecosystem integration, lacking capabilities, reliability, and security. These drawbacks will be addressed in time, just as enterprise mobility platforms had growing pains but ultimately grew to be a critical component of many company workflows.

The fact that the confirmation of a component manufacturing agreement is significant speaks to the state of the market; the hardware space is sparse right now, and ripe for competition and growth. In enterprise, there are a handful of hardware competitors, each with benefits and drawbacks across price, capability, usability, and platform support. Consumer products will bring a fresh set of products into the market, even if squarely consumer-targeted at first. Identify partnership opportunities not just in hardware, but in content creation and development, operators for content delivery, system integrators, and other companies in synergistic markets: Artificial Intelligence (AI), 5G, the Internet of Things (IoT), and mobile devices.

 

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