It had all the makings of a long overdue coming-out party for augmented reality.
In June, Apple (AAPL) unfurled a new technology, called ARKit, for its army of developers to create AR apps for hundreds of millions of Apple’s mobile devices. “Simply put, we believe augmented reality is going to change the way we use technology forever,” Apple CEO Tim Cook said during the company’s fourth quarter earnings call last month.
Alphabet (GOOGL), Facebook (FB), Microsoft (MSFT), IBM (IBM), and others have already placed their bets on what they consider one of tech’s Next Big Things. Last week, Amazon (AMZN) joined the fray with Sumerian, a new platform for developers to build AR, VR and 3-D apps.
Gaming isn’t the only industry poised to cash in. Job training, replacement of manuals (Mercedes-Benz), retail shopping (Zugara), parts assembly (Boeing) and other key industries are eyeing AR as a potential jackpot and means to boost their bottom lines. DHL estimates AR-aided order picking improved 25% for customer Ricoh. Coca-Cola, Siemens, and others have boasted significant improvements in productivity, worker efficiency and safety from AR-enhanced assembly, remote-expert assistance and customer service.
A new report on Tuesday suggests an emerging technology whose tentacles could have far-reaching implications for corporations and consumers. ARtillry, an immersive-technology research company, estimates that the enterprise AR market will skyrocket to $47.7 billion in 2021 from $829 million in 2016 and that consumer AR will reach $15.8 billion in 2021 from $975 million in 2016.
By early 2019, as many as 900 million smartphones and tablets could be capable of supporting AR apps fashioned from ARKit, Google’s ARCore and Facebook’s Camera Effects, according to Digi-Capital, an augmented and virtual reality adviser. By 2021, it could grow to 3 billion.
But first, a reality check.
Those breathless words at the Apple event in the spring had all but vanished by September, when the iPhone X was introduced. Nary a word was uttered about ARKit and some developers were openly grumbling about the onerous cost of creating apps.
So don’t start the revolution just yet.
The slow rise of AR is symptomatic of an industry that thrives on ever-changing ideas and concepts – often before its customers are ready. An alphabet soup of technology, from AR and VR to AI (artificial intelligence) and IoT (Internet of Things) is being ruthlessly pursued by companies large and small in a race for supremacy in the trillion-dollar high-tech industry.
“A lot of people got too excited, but you have to hold your breath before it becomes real in a few quarters,” says Shel Israel, co-author of The Fourth Transformation: How Augmented Reality & Artificial Intelligence Will Change Everything.
Breakthrough technology takes time, money and – most important – customers to take hold. AR, for now, fits neatly in the coda of underwhelming technology like artificial intelligence.
When new, immersive technologies emerge, the experiences of consumers often wildly diverge from what app developers originally expected. Such has been the case with AR-like products for decades. In 1968, Ivan Sutherland, the father of computer graphics, came up with a “head mounted three-dimensional display” called “The Sword of Damocles.”
A descendant of Sutherland’s concept was used by Defense Advanced Research Projects Agency (DARPA) to help fighter pilots navigate jets. But the use had limited commercial appeal because it demanded so much computing power. Boeing eventually deployed AR at its 777 assembly plant near Seattle to track aircraft components.
Fast forward to the 2010s and Google Glass, a bulky AR play left consumers cold, prompting Google to return to the drawing board.
The potential for AR is undoubtable because companies and vendors keep trying despite technological hurdles. “We’re not quite there – hardware, software, not one standard operating system,” says John Cutter, product manager of IBM Watson, AR/VR Labs.
Widespread adoption of AR has lagged because high-definition content is hard to create. The leap from simple 2-D smartphone overlays from Pokemon Go to 3-D high-definition and photorealistic AR graphics is a “huge undertaking,” says Josh McHugh, CEO of Attention Span Media, a digital and social media agency.
It’s also expensive. An AR/VR content developer from a major publishing company told McHugh it costs about $250,000 to create a good AR app or experience, and AR head gear can put developers back $1,000 to $1,500. Great AR hardware simply isn’t available to the public.
Magic Leap is illustrative of the AR echo chamber: Despite years of anticipation and nearly $2 billion in investments, the much-ballyhooed start-up has yet to release a product. When The Information got hold of one of it prototype devices in 2016, it registered its disappointment, prompting a tweetstorm from Magic Leap CEO Rony Abovitz.
Culturally altering technologies takes time to catch on with a mainstream audience. The popularity of the modern cell phone is credited to iPhone, which made its debut in 2007.
The first iPhone was many things: a touchscreen mobile phone with camera and Web-browsing capabilities. It was also slow, lacked storage and sported a small screen. As smartphone chips, hardware design and data networks evolved, so did its popularity.
Like iPhone and other technologies, AR is dependent on advances in chips -- a speedy new Qualcomm cellular chip should help matters -- and advances in hardware design. Microsoft’s HoloLens may be too big, slow and goofy looking, but it will evolve to the satisfaction of a wider audience. Meta AR’s head set has earned raves, but yet to reach a wide audience. Snap’s Spectacles have the right form factor but not the ideal user experience.
Still, there are encouraging signs. Google is developing an API that would let advertisers incorporate AR and VR into their content. Perhaps iPhone X, with its distinct face-recognition feature, could accelerate acceptance of AR if that feature can be used to project images, McHugh and others say.
AR “is not mainstream yet [with consumers] but mainstream among developers,” says Ori Inbar, founder of Super Ventures, a fund for AR start-ups. “Any Fortune 500 company that has some respect has deployed it.”
Apple reportedly is working on an AR headset, and ARKit and ARCore will help drive down the cost of creating AR content for a new generation of developers. And Google is developing an API that would let advertisers incorporate AR and VR.
Only Apple has shown the technical and marketing chops to make augmented reality a reality via ARKit, iOS 11 and the 500 million devices that support both, says Jon Cheney, CEO of start-up Seek, a content platform for AR.
The question is, when?
We’re still waiting for AR’s coming-out party.