Apple's Augmented Reality Initiative: Catalyzing the Growth of a Transformative Technology

Insights from Kristen Hanich , Research Director Parks Associates .

Augmented reality?has the potential to revolutionize the way consumers interact with technology, each other, and the world around them. With the smartphone market entering maturity, many see augmented reality devices as potentially replacing smartphones and even personal computers in coming years.

Augmented Reality (AR):?Technologies and solutions that impose virtual images on top of a user’s view of the physical world and physical world objects. This may include both two- and three-dimensional images and experiences. Users may access AR experiences via handheld devices (smartphones, tablets), head-mounted displays (HMDs), or moving vehicles such as an automobile or plane.

Head Mounted Device (HMD): A device that is mounted on a user’s head. This includes devices such as virtual reality headsets, AR smart glasses and headsets, and wearable cameras.

HISTORY

Augmented reality has existed in one form or another for nearly seventy years, beginning with the release of the first heads-up display (HUD) for military aircraft in the late 1950s. In the early 1970s, interest in more portable versions of this technology resulted in the introduction of head- and helmet-mounted augmented reality displays (HMDs). Early HUD technology was heavily dominated by military aviation use cases and applications until the mid-1970 and 1980s, when HUDs appeared in commercial aircraft and consumer vehicles. Expansion of HMDs beyond military aviation use took time, with ruggedized HMDs for ground troop use only being introduced in the late 1990s.

In the early 2000s, HMDs for enterprise and consumer use became available. Adoption was limited, however, and the military remained the only viable market for augmented reality HMDs. In the year 2000 ARToolkit, a popular open-source software library, was created by developer Hirokazu Kato. In 2009, the tool was ported to Adobe Flash, giving web browsers the ability to render augmented reality images. The introduction of the modern smartphone and app economy proved to be a powerful boost to early augmented reality, with the emergence of QR codes, visual search, and location-based marketing and solutions forming the basis of the first augmented reality solutions for consumers. In 2012, the announcement of Google Glass?brought widespread attention to the possibility of AR solutions on consumer HMDs, but failed to gain acceptance. The project was eventually shuttered, and Google turned its efforts to the enterprise.

Today, developers have access to a long list of software development kits to design AR solutions, most of which support a wide variety of platforms across both handheld and head-mounted devices. This not only includes AR pioneers such as Vuforia?and Wikitude, but also newcomers ARKit?and ARCore, the augmented reality SDKs offered by Apple and Google that are built into the operating systems of modern Apple and Android devices, respectively. With the release of ARKit and ARCore in 2017 and the wide publicity given to AR by Apple, businesses and developers have become increasingly aware of the potential of augmented reality across a number of verticals.

Handheld devices such as smartphones and tablets represent the majority of the AR market today. Handheld AR devices outnumber HMDs 99 to 1, with tens of millions of handheld devices in use across both the enterprise and consumer spaces.

A/R Adoption

A wide variety of industries are in the process of piloting or adopting augmented reality solutions. Top verticals for AR include the aerospace and defense industry, oil and gas, automotive, industrial products, life sciences, logistics, telecommunications, energy, construction, software, and the retail & consumer space. Companies are using AR solutions for providing step-by-step instructions during the manufacturing process, for providing remote service and support sessions via ‘see-what-I-see’ functionality, for providing collaborative 3D modeling and design tools to designers and engineers, and for walking employees and customers through in-depth training sessions, among other uses.

Enterprise Use Cases for AR:

• Differentiate B2B products/services: remote service inspection & verification, remote expertise, customer self-service via AR instructions
• Improve logistical efficiency:?hands-free service manual instructions, pick-and-put guidance solutions for warehouses
• Streamline manufacturing process: step-by-step operator & assembly work instructions, maintenance work instructions
• Streamline product development and decision-making: provide 3D design tools, collaborative design process, visualize products and structures in physical space
• Training and education: train workers with step-by-step guidance of work processes, train clinicians with 3D models of the human body & simulated surgeries
• Boost marketing and sales efforts: augmented brand experience (e.g.: design your own car in augmented reality), smart postage/packaging (e.g.: recipient scans code to trigger AR experience on device)

While the enterprise space is at the forefront of the adoption of augmented reality HMDs, enterprise use of augmented reality solutions is mostly via handheld devices such as smartphones and tablets. Handheld devices tend to be more cost-effective for enterprises, work well with existing deployments and organizational structures, and many enterprises are able to run augmented reality applications on devices they already own.

One area where HMDs are more popular than handheld devices is among front-line workers. Many front-line workers are equipped with dated handheld devices at the end of their product lifecycles, and enterprises are seeking to skip over current smartphone-based solutions and directly into next-gen augmented reality solutions. While handheld devices may be more efficient to operate at scale, Android operating system fragmentation and the comparatively high price points and the lack of ruggedness for iOS devices make these products less than ideal for companies seeking long-term solutions with a 10-15 year lifespan.

Enterprise adoption of augmented reality is still in the early stages.?The major limiting factor in augmented reality adoption is the need for strong solutions partners to design custom applications that fit workers’ use cases. This limits augmented reality to large enterprises and other organizations that are willing to spend a significant amount of resources on innovation.

In the consumer space, there is low familiarity with the term “augmented reality.”?However, most consumer use is of popular applications such as Pokémon Go, Snapchat, and Instagram – smartphone apps that are being used not because they are augmented reality, but because the core experiences resonate with consumers.

Apple’s expected announcement today in this category will help lift awareness and adoption given brand power, content ecosystem, developer relationships, and Apple’s focus on premium experiences.??

Insights from?Kristen Hanich?Parks Associates.