For years the mainstream tenet of the AR community has been that the success of Augmented Reality would indissolubly depend on the success of Smartglasses. On the other hand, current market dynamics clearly indicates that, in the transition between the current state of adoption of the technology and the mass adoption of smart glasses, there will be an intermediate state of large scale adoption of Mobile AR. Indeed, recent announcements from large companies such as Facebook and Apple have brought their attention to the fruition of augmented reality on mobile devices rather than on a new generation of wearable devices.
The reasons for this phenomenon are different. First, the fastest way to reach hundreds of millions of users is to target the platforms already in use by billions of users worldwide. Facebook, despite having since acquired Oculus, can immediately leverage over 1 billion users on its Facebook, Messenger, Instagram and Whatsapp platforms; conversely, Apple boasts a hardware-side privilege position, with a market share of 13% on the global scale, and on the software side due to the recent launch of ARkit, a free development kit that lets you create AR experiences on iOS devices.
This is the reason for the hype around Mobile AR, namely the ability to bring AR to billions of people without forcing them to buy a dedicated device. So while the awareness of the technology will increase, it will be possible to design and create new generations of immersive devices.
The numbers of the Mobile AR market
Digi-Capital has estimated the Mobile AR market to be worth $60 billion in 2021, including hardware and software components. On the hardware side, the main players are Apple, Samsung and Huawei, with the first being strongly present on the software side with ARkit. The users involved in this field could reach 400 million in 2021. On the software side, the main players are Facebook, Tencent, Apple and Snap, who together already count on users that go beyond the billion and that will grow even more in the coming years.
From a numerical point of view, the Mobile AR software players have the great advantage of interacting with a much wider user base than the hardware players, and the degree of adoption of the new AR features that is made available is very much higher.
iOS vs Android
It seems clear that Apple is enjoying a preferential position, which, thanks to the recent release of ARkit and the 13% market share on mobile hardware, is in the best conditions to impose its Augmented Reality model on the iOS world.
In the Android world, Samsung and Huawei, with a market share of 23% and 9% respectively, are forced to catch up because they are just starting to gear up with their own solutions both on the hardware and on the software sphere.
And what about the other mobile contenders? The only other real mobile contender is Microsoft, with one of the most convincing AR operative systems in the market. It’s true that Microsoft’s leap into AR has been huge and Hololens is purported to set a standard in the Smartglass market of the near future. Based on this great success, observers have started to wonder whether Microsoft will strengthen their mobile AR strategy or focus on the Smartglass development. Many believe that Microsoft is probably not going to stay at the door.
From Mobile to Wearable
These premises urge analysts to think that in the coming years we will witness a sharp increase in AR’s penetration on mobile devices already in use, thus avoiding the purchase of new dedicated devices. The next step will be the move from traditional mobile devices to user-friendly wearable devices. The tech giants seem to be the players who are likely going to control the market, given their already important user base and the huge financial resources available.
On the other hand, the challenge for the emerging players of the AR community will be to find the right repositioning inside the evolving AR landscape. That the opportunity is enormous is testified by the proliferation of startups and new entrants in the market. Will the latter be able to assert their competitive edge and carve out a space in the AR value chain?
This post is also available in: Italian
