Over the past several weeks, we’ve all seen the frenzy surrounding Pokemon Go and AR. This game has been the fastest app ever to achieve 10M downloads in just 7 days, with at least 30M active users and a high level of user engagement.
What makes Pokemon Go so exciting is Nintendo’s use of a simple version of AR that has 3 key features that other apps might try to copy. These are: 1) strong IP that’s popular with children and adults, 2) collection element that gets players to search for “rare” objects and 3) innovation that encourages and enables users to interact with the world around them. These 3 critical components are basic building blocks that many players in the industry will likely focus on to bring out their next generation AR systems. While in the near term, Gaming is the “low hanging fruit” in this sector and will benefit the most from AR, there are many other more day-to-day applications that AR will be used for.
In this blog post, we will examine a few these segments and discuss which companies are targeting new solutions.
AR incorporates and superimposes text, graphics, sound, etc. on top of our real world surroundings to allow the users to improve their lives. The enablers of AR are the following areas:
- High powered semiconductors: Apple, Intel, Qualcomm, MediaTek, and Samsung are shipping mobile application processors. As other mobile apps using AR take off, we will definitely see an increase in processing speed, sensors, memory, and storage capacity in the mobile space.
- Low cost displays: the rapidly declining cost of displays and rise of OLED’s as the preferred display type from companies such as LG, Samsung and even Kopin are driving rapid adoption everywhere.
- Connectivity and location based systems: GPS, WiFi, and Bluetooth today are mainstay features in every mobile device, and gaining traction in other areas like cars. With the shift to 4G and eventually 5G mobile, we will see even higher adoption and use of these technologies in mobile for AR.
So where else will we see AR and when?
The reality is heavy hitters such as IBM, Google, Apple and many others have been developing their AR portfolios for years. A quick look at the US patent portfolios in AR and head mounted displays shows the top 5 companies (in order) are:
AR is enabling new business models. In addition to in-app purchases and in game power ups, AR allows companies to create new marketing campaigns, and advertise directly to consumers. GPS allows retailers to drive foot traffic to their stores. In fact, GameStop’s CEO reported that sales were up 100% in stores that were involved as stops in Pokemon Go. The areas where we see new AR solutions being developed are automotive, commercial enterprise, industrial manufacturing, and retail such as home improvement stores, restaurants and many more. Below we briefly discuss a few of these areas and the companies developing technologies in this space:
Code name of their AR program is “Project Tango”. While they originally introduced this in 2014 as a 3D mapping solution, they have expanded it to use multiple cameras, infrared projector, motion tracking and depth perception to create a more detailed mapping experience. Instead of using a simple overlay technology (like Pokemon Go), Tango based devices will be able to analyze and interact with far more data points and therefore be more useful to the end user. The first Tango enabled device due out is the Lenovo PHAB2 Pro sometime this year. Lenovo is planning to roll out 25 Tango apps this year and another 100 in 2017.
Lowe’s, Home Depot and Wayfair
This home improvement company has also partnered with Google to allow customers to put together a 3D image of any room in their homes, and look at different appliances in each room. Other companies like Home Depot are using similar technologies. One interesting application is by Wayfair, who is using this to sell furniture online.
On its recent earnings call, Tim Cook, Apple’s CEO, confirmed they are working on AR stating that “AR could be huge”. While famously secretive, the company’s patents are public data. From these, many analysts have drawn some interesting conclusions about the potential use cases Apple is looking at for AR. One use is for 3D maps, which interestingly could also be applied to other applications like automotive repair and medical. Another area is where Apple describes a headset that could hold a smart phone, similar to Samsung’s Gear headset. Within the automotive industry, Apple CarPlay already has traction. AR would allow them to project GPS images and maps onto the screen, similar to a few high-end cars today.
Shopping Advisor provides personalized experiences to shoppers, allowing them to compare various items within each store. British retailer Tesco has used this technology successfully. IBM is leveraging its AR to do research on how to identify issues and train employees in industrial manufacturing. The company’s acquisition of the Weather Channel allows it to use AR to create 3D images of storms, etc. and make users more aware of these events.
Microsoft’s main effort is behind their HoloLens. The early release of their device is priced at $3000, and includes impressive technology. The HoloLens uses multiple sensors (gyroscope, accelerometer, magnetometer, etc.), and 3 different processors. We expect software enhancements to this product to create opportunities in 3D modeling/CAD and other areas.
Other opportunities for AR:
The telecom sector stands to benefit from higher data usage by customers. However, today, the Pokemon Go phenomenon does not by itself move the needle, as various indicate a potential of 1.5% increase in data usage in the US, which is not material. However, adding the potential in other parts of the world, and adding other applications using AR will probably make a big difference in data usage.
The financial services sector is considering using it to give traders more data and analysis, using holograms instead of multiple screens. Citigroup is working on such a solution.
Pokemon Go is just the tip of the AR iceberg. It will be exciting to see all these areas develop.
BitNavi is a blog conceived by Karl Motey in the heart of Silicon Valley, dedicated to emerging technologies and strategic business issues challenging the industry.
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