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AR, MR still ‘long way’ from everyday consumer lives

"The race is on" to develop the essential killer application

Augmented reality (AR) and mixed reality (MR) present many opportunities for application enhancement and new monetisation opportunities, but the technologies are still a long way from being an everyday feature of consumers’ lives, according to Futuresource’s latest industry tracking report for AR and MR in mobile.

The report, which synthesises fieldwork drawn from vendors, content creators and service providers, along with mobile device forecasts and existing research, stated that “the race is on” to develop the essential killer application and, ultimately, to establish the dominant platform for mobile AR/MR content.

“Although the mobile AR/MR proposition is very much in its infancy today, the end-game is clear for Facebook, Apple, Google, Snap Chat, Microsoft et al,” said Michael Boreham, market analyst, Futuresource. “AR/MR is considered to be the next major computing platform, offering a revolutionary technological leap that has the potential to evolve and enhance our digital interaction across industries such as communication, utilities, entertainment and e-commerce.”

Whilst VR has been marketed as the next ‘must have’ consumer device, Futuresource states that 2017 has seen an increasing amount of activity in the AR and MR space, with an increasing number of industry heavyweights throwing their hats into the ring.

The value of the overall consumer mobile AR/MR market reached $1.7 billion in 2016, spearheaded by applications like Snapchat and Pokémon Go. Futuresource found that the market was overinflated as a result of the rapid short-term success and subsequent loss of momentum of Pokémon Go, and expects market contraction to $1.4 billion this year.

However, the longer-term outlook is for a 77 per cent compound annual growth rate (CAGR) between 2017-2021, with mobile AR/MR soaring to $14.1 billion market valuation by the end of 2021.

Futuresource predicted that social media networks will play a major part in this growth by capitalising on their device agnostic approach, huge user reach and ability to innovate.

Advertising will be the other key component of the consumer AR/MR market, driven by search and social media, as Google, Apple and Facebook all incorporate more AR functionality into current utility services.

“In reality, it may be the best part of a decade before the emergence of a killer AR/MR app appears. However, as technology develops and affordable devices come to market, AR/MR will be pushed into the mainstream for everyday use, especially for entertainment and utility tasks,” stated Boreham.

“The key battle is not which platform is the most innovative, as the social media networks are looking over each other’s shoulders and mirroring their ideas, but which ecosystem will win out. Ultimately, the end-game is who will own the customer and where will they conduct their mobile computing needs whilst utilising AR/MR?”