The future of the tech industry will be shaped by a range of disruptive themes, with virtual and augmented reality being one of the themes that will have a significant impact on consumer electronics companies. A detailed analysis of the theme, insights into the leading companies, and their thematic and valuation scorecards are included in GlobalData’s thematic research report,Augmented Reality – Thematic Research. Buy the report here.
Augmented reality (AR) is a technology that allows the user to see the real world overlaid with digital data. This digital content layer can include sensor-based data, location-based data, sound, video, graphics, or other datasets. The AR market will grow at a compound annual growth rate (CAGR) of 32% during 2020-2030, according to GlobalData estimates. AR technology may replace the smartphone as the primary connected device users carry around. Moreover, AR will be a critical component of the metaverse – the next mega-theme that Big Tech has in its sights.
AR is evolving into a utility in specific consumer and enterprise applications. On the consumer front, AR is primarily used in social media, gaming, and ecommerce. While Pokémon Go and Snapchat Lenses have helped popularise AR as a tool for entertainment, ecommerce is using it as a utility. In addition, upcoming metaverse platforms will integrate AR-related technologies, helping to bring AR to the fore.
However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.
Insights from top ranked companies
Alphabet is the parent company of Google. Google is well-positioned to benefit from AR in the long run, thanks largely to its ARCore (also called Google Play Services for AR), which had an installed base of 633 million devices in 2020, up from 250 million in 2018 (according to ARtillery Intelligence). Its other AR services include Chrome AR (its WebAR platform), Cloud Anchors (its AR cloud platform), and Scene Viewer (a tool that allows users to view 3D models of products on websites). Its AR navigation feature for Google Maps, Live View, became available on Pixel phones in May 2019 before being rolled out to all smartphones supporting AR. In July 2021, the company announced the addition of AR masks and filters to its Meet video calling service. It offers the Google Cloud platform to AR developers for storing and streaming AR content on demand. Google is strong in the AR smart glasses market, thanks to Android, which offers many in-built AI and AR tools to develop apps and features. Google Glass Enterprise Edition 2, launched in 2019, supports enterprises with computer vision, conversational platforms, and machine learning applications. Google acquired North (maker of Focals smart glasses) in 2020, suggesting that it will once again target the consumer smart glasses market following the failure of the original Google Glass in 2015.
Microsoft’s approach to the AR market focuses mainly on its HoloLens headset, first introduced in 2016. It has worked with the US Army since 2018 to integrate the latter’s IVAS tool into HoloLens headsets under a $480m contract. Subsequently, in April 2021, it won a production contract, potentially worth $22bn over ten years, to supply 120,000 IVAS-integrated HoloLens headsets to the US Army. The successor device, HoloLens 2 (launched in 2019), features a range of hardware and software upgrades. It comes with cloud services such as Azure Spatial Anchors (for developing spatially aware apps) and Azure Remote Rendering (for streaming high-quality interactive 3D content). The HoloLens 2 headset is designed for enterprises in the automotive, aerospace, manufacturing, and healthcare industries. It also features a free preview version of the under-development Microsoft Mesh, an enterprise grade metaverse for collaboration.
Samsung Electronics is active in several segments of the AR value chain, ranging from semiconductors to devices and apps. It demoed an experimental AR headset in 2018 and a prototype of AR smart glasses in 2020 but has yet to launch any of those devices commercially. While videos of Samsung-branded smart glasses, capable of projecting a virtual screen in the wearer’s FOV and controlled via smartwatches, were leaked in February 2021, Samsung has yet to confirm the devices officially. Meanwhile, several Samsung smartphones are compatible with Google’s ARCore, making them capable of running AR apps. In April 2021, Samsung released a beta version of AR Canvas, which allows users to create semi-persistent AR on Galaxy smartphones. The app was reportedly built using Samsung’s Project Whare, an AR cloud initiative intended to deliver multi-user experiences, persistent content, and cross-platform support for ARCore and ARKit. Earlier, in March 2021, Samsung added a Snapchat Lens feature on its Galaxy A-series smartphones, allowing users to access Snapchat filters from the devices’ camera apps. While these are moves in the right direction, Samsung has a long way to go before it can match Apple’s AR capabilities.
To further understand the key themes and technologies disrupting the technology industry, access GlobalData’s latest thematic research report on Augmented Reality.