December 18, 2017
Immersive experiences—the 4th wave in tech: The AR market and why we should pay attention
By: Kamen Kamenov

Immersive experiences—the 4th wave in tech: The AR market and why we should pay attention

Welcome to the third post from a series on all things Augmented & Virtual Reality.

In this post, the spotlight will once again be on AR. Namely, what does the market look like and why should we care?

As usual, a quick memory refresh on what the virtuality continuum is:


AR Market Overview

If one re-reads this post several months after its publication (in December), chances are a lot of what I’m about to present below will have changed. Given the pace of growth of the immersive experiences space, its factsheet is very much a living document. Nonetheless, this—on a high level—is where AR is now…

Different research will present the market in different ways but one media that I often choose to look at Digi-Capital since they frequently revise their figures to stay up to date. Their latest insight is that, by 2021, AR could take as much as 77 percent ($83bn.) of the total AR/VR market.

Additionally, 2016 was a record setting year in terms of total investment in the sector ($1.8bn), with a year-on-year (YOY) growth of 140 percent—and those are just publicly known figures!

Furthermore, analysts from IDC predicted strong growth in revenue for the market, looking at a 130.5% YOY growth for 2017 ($13.9 billion) and as much as $143 billion by 2020.

When compared with manufacturing, retail, consumer services and other markets for 2017 revenue growth, consumers make up the biggest market segment (44 percent). The most important area for consumers in the immediate term is… Commerce. Augmented commerce.

In other words, AR will increasingly be leveraged as a new medium via which brands can engage with their customers and offer their products. The better AR hardware & software get, the more integrated the customer journey is going to be, allowing the user to engage with a brand, explore its offering and purchase its products all within the same experience. The future is bright! I will explore the topic of augmented commerce further in future posts. That said, some great examples include Ikea’s Place app and the Accenture designed and built BMW i Visualiser.

There are challenges to growth

AR experience ought to be intuitive, untethered, easily accessible anytime and anywhere and with premium quality digital renderings. The best ones are. However, this presents a challenge – to keep the experience mobile and untethered, image processing has to be embedded within the AR device. It is a well-known issue that supporting high-level image processing over extended periods of time requires batteries of high-capacity and energy density. Such ultra-high-performance electronic components and semiconductors are not yet available with current technology. On the positive side, retail stores can overcome this fairly easily by simply keeping the devices charged when not in use.

There are also challenges related to price—for example, Microsoft’s HoloLens has a starting price of $3,000. Not exactly mass consumer pricing. Luckily, the recent addition of ARKit—Apple’s augmented reality kit—to iOS11 on every iPhone since the 6S has practically put an advanced AR device in the pockets of millions of people already. Not long after, Android made a significant addition to that number with ARCore.

Another one is quality of the hardware—taking HoloLens as an example. Futuristic as it may look, it’s probably not the most comfortable headset to wear for long periods of time and still has a limited field of view. Others relate to connectivity, the overall app ecosystem, telco cross-subsidisation. Again, those are overcome to a great extent by ARKit and ARCore. Whilst not that many consumers are likely to buy an expensive HoloLens, quite a few will be interested to explore the newly available possibilities to explore immersive content on the phones they already own.

It is clear the road ahead is challenging but that makes for an even more exciting journey and we should all keep an eye on the latest developments and the opportunities they may present us with.

Happy to hear your thoughts—get in touch via

Here are my sources for this post, in case you’d like to do some further reading:


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