Fall or Rise of AR in 2025
Just 60 years ago, futurists imagined that space travel would be a normal thing for ordinary people of the next (current) century. There would be settlements on the Moon and Mars, and you could probably take a space vacation. Cities on Earth would be full of flying cars driven by some anti-gravity engines. But all the electronics would be bulky, like a TV from the '60s. Bulky and dumb humanoid robots would help with housework.
But the future turned out to be different. We do not have magical anti-gravity engines. Space travel is on the horizon, but it’s limited to leaving the atmosphere and making a loop around the Earth, which is crazy expensive, and only a few people have become space tourists. There are still no humanoid robots sweeping our backyards.
However, humanity has made huge progress in electronics, information technology, and machine learning that our predecessors could not have imagined. We have efficient, compact, and nicely designed smart devices. Batteries and electric motors have advanced significantly, so electric cars can drive up to 400 miles. AI can give you advice about writing code, planning vacations, or cooking recipes—and even make a collage from your photos. (ChatGPT has made a collage above from photos of a mural at the ‘Most Retro-Futuristic DMV’ in Culver City/Los Angeles)??
The Past
So what about the future of AR? Let’s look at the past first:
Powerful smartphones fueled and democratized this technology. Sixty years ago, the performance and quality were miserably low, and costs were sky-high. Now, any student can experience it.
Let’s add more strokes for quite a new class of devices—AR glasses!??
Look at the dates. It’s mind-blowing—decades between early events, but the timeline becomes denser in 2024. And there are even more players: Vuzix Blade, Magic Leap 1, Epson Moverio Series, Lenovo ThinkReality A3, RealWear HMT-1, Rokid Glass 2, Nreal Air.??
So, what about the future of AR? The nearest future.??
Surely, all AR device vendors would love to see everyone on the street, in workplaces, and at schools wearing AR glasses in a couple of years. Just imagine your kids—they spend hours with smartphones in their hands now, but soon they might go hands-free and spend three times as much time in their favorite AR glasses! They’ll only take them off when going to sleep. :) Will it happen???
Let’s emphasize some recent events:??
The Future
Success defines the future of a specific AR device and the AR industry as a whole. Popular products either thrive or fail based on their ability to capture attention. There is an evolutionary loop: creating better technology requires substantial investment; securing that investment depends on the technology selling well and generating revenue to fuel further innovation. Without market success, there is no future!
I propose a rough formula:
Market Success = (Market Value × (Product Value / Product Flaws) × Affordability) ÷ Competitors
Let’s break this down to understand what each factor represents and how it contributes to the overall success of AR devices.
Market Value
What determines market value? It boils down to the size and wealth of the audience a device can capture.
Smartphone users: Billions of people use smartphones, but the type of phone matters. Apple users, who have already spent hundreds to join the ecosystem, might be more willing to invest in premium AR devices. Meanwhile, someone with a $200 budget Android phone may be less likely to spend $1,000 on AR glasses.
Platform users: Companies may focus on their existing platforms. Apple’s 1.4 billion iPhone users, Meta’s nearly 3 billion daily users, and Snapchat’s 450 million daily active users each represent unique opportunities and challenges. Apple users are accustomed to paying for premium products, while social media platforms attract diverse, often less affluent demographics and are ready to pay just pennies.?
Niche users: Some AR devices, like Microsoft HoloLens, target professional users willing to pay $3,500–$4,500 for productivity and industrial applications. These smaller but wealthier markets are lucrative, but breaking into mainstream consumer markets remains the ultimate goal.
Market Value = Market Size × Market Wealth
The real winner in the AR race will be the company that bridges these markets, converting niche and platform users into a broad consumer base and vice versa.
For example, DigiLens targets professional and military markets—high-paying but narrow segments. However, for long-term success, it will need to penetrate the consumer market.
Conversely, social platforms cater to very broad markets that are often hesitant to pay. Consider the funnel: 500 million platform users → 10 million users willing to pay $3/month → X users willing to pay $100/month for an AR product on the platform. Vendors limited to specific free social platforms must find ways to attract paying customers.
Ultimately, the ability to bridge markets—expanding from niche to mainstream, and from free to paid—will define the leaders in the future of AR.
Product Value
Value is the key driver of adoption. An AR device must offer something compelling enough to justify its cost. But what kind of value matters most?
领英推荐
Entertainment. Gaming and social experiences are great for early adopters, but they can only take AR so far. While some may pay $1,000 for the novelty of AR golf, entertainment alone won’t sustain mass adoption.
Utility. Real-world applications like navigation, real-time translation, and instant access to contextual information add significant value. Solving everyday problems is what will drive AR glasses into the mainstream.
Industry and productivity. AR can revolutionize workflows, from technicians following repair instructions to surgeons using overlays during complex procedures. Businesses are willing to pay a premium for tools that boost efficiency and productivity.
Defense and safety. The most profound value comes from saving lives. Whether used by soldiers in combat or emergency responders in disaster zones, AR has the potential to become an indispensable tool in high-stakes environments.
A successful AR device/technology delivers value across multiple domains, making it appealing to a wide range of users.
Product Flaws
No product is perfect, and AR glasses are no exception. Their flaws are rooted in both technology and psychology:
They’re glasses. Glasses may add style, but they’re not a natural choice for everyone. Many people see them as a necessary inconvenience rather than a desirable accessory. This inherent resistance is a hurdle for AR adoption.
Unnatural use cases. AR glasses won’t fully replace smartphones. Imagine needing to put on glasses just to answer a call or check a text—it’s less convenient than pulling out your phone. “Let me put on my glasses to answer my mom’s call”?
Hardware limitations. Balancing performance with comfort is a major challenge. Even lightweight glasses can cause discomfort after prolonged use. Battery life will improve, but it will always come with trade-offs in weight and bulk.
Vision adjustments. Nearly half the global population needs corrective lenses. Customizing AR glasses for individual prescriptions adds complexity and cost, creating barriers to mass production.
Fashion challenges. People want variety in frame styles and colors. Producing AR glasses that match the personalization options of traditional eyewear adds another layer of difficulty.
Affordability
Affordability depends not just on the price of the device but on how it fits into household budgets. AR glasses may start at $500 for low-end models, with premium devices exceeding $1,000. But what role can they play in family spending?
Here’s how an average American household allocates its income:
Housing: 33% of income goes to rent or mortgage, leaving less room for discretionary spending. Transportation: 12% is spent on car payments, gas, and insurance. Food: 13% is allocated to groceries and dining out. Subscriptions and communication: 7% covers internet, streaming, and mobile services. Savings: Only 5% typically lands in savings accounts.
How many AR glasses can a family afford? One for the kids? A pair for the parents? At current price points, the total cost could range from $500 to $4,000 for a household fleet. Balancing affordability with value will be key to widespread adoption.
Competition
Inevitable Competition. Competition is an unpredictable factor. You may feel like the sole player in the race, on the verge of capturing the entire market, but suddenly, new competitors emerge from all directions.
Expanding Competition. The AR/VR tech is rapidly evolving, with an increasing number of players entering the space. Various components used to construct AR/VR devices—such as micro-OLED displays and waveguides—are becoming more widely available. This growing accessibility is lowering the barrier to entry, encouraging more companies to join the market.
Cost Competition In the past, China was known for reverse engineering and replicating technologies, particularly in industries like electronics, manufacturing, and software. However, in recent years, China has shifted from being primarily a copier to becoming a leader in innovation across multiple sectors. Companies like Huawei, DJI, BYD, and Tencent have established themselves as global leaders in telecommunications, drones, electric vehicles, and gaming.
China’s advantages, such as low-cost labor and a semi-communist economic model with strong government support, have enabled it to compete aggressively in global markets.?
Conclusions?
Currently, AR accessories face significant challenges for daily use. The "glasses factor" is a major drawback, combined with hardware limitations that present a substantial hurdle for the future of AR in its current form.
The value AR brings to the broader consumer market remains disappointingly low, with its strongest appeal limited to niche markets. This is compounded by extremely high production costs, which pose a second major obstacle to widespread adoption.
Moreover, there are no effective monetization models for capitalizing on social platform markets. In contrast, monetization in niche markets tends to occur more naturally. This lack of viable revenue streams in broader markets represents the third critical challenge.
Finally, competition in the tech industry, while exciting, can sometimes scatter focus and dilute efforts, making hopes for a quick victory feel increasingly elusive.
Some market trends for adjustment became evident in 2024, such as the discontinuation of Spark AR and the Vision Pro in favor of more affordable models. These trends may continue to evolve in 2025.
While we certainly won’t witness the demise of AR in 2025, competition will persist. However, no significant breakthroughs in the market are likely to occur within the year.
The idea that every kiddo will wearing AR glasses in the near future remains highly improbable.
#AugmentedReality #AR #FutureAR #ARTrends #ARGlasses #ARVR #Tech2025