Office worker wearing 3d glasses with augmented reality screens over glitch effect background
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Virtual and augmented reality sales are not what they used to be. Headset shipments have decreased 30.5 percent worldwide year over year, putting recent hype around such technologies into question. That's according to IDC's Worldwide Quarterly Augmented and Virtual Reality Headset Tracker. This combined with further research (sign-in required) carried out in April by Denver–based GutCheck, an agile marketing research company, may explain why. It showed that a majority of people don’t’ really understand what AR is, let alone how it can help move objectives and projects forward in the enterprise. 

The GutCheck research also points out that the combined AR and VR markets are set to grow up to $150 billion by 2020 and augmented reality is predicted to be $120 billion of that growth.

The findings also showed that when it comes to learning about AR initially, most consumers became aware of it through gaming applications, but that many still confuse AR with VR. One response from a GutCheck survey respondent summed it up nicely, “I’m not 100 percent sure. I think it’s a program downloaded onto a smartphone and then placed into a headset and then a virtual scene plays out in front of their eyes.” 

Additional findings include:

  • Almost all feel AR isn’t relevant to their lives
  • Most feel AR is meant to provide a way to try something, such as a product or experience
  • Brands expected to adopt AR include Google, Microsoft, Lowe’s, Home Depot, Amazon and Nike
  • Many would be interested in augmented reality tools relating to shopping and retail
  • Most became aware of AR through gaming

As a result, the research points out that many brands in a variety of verticals are likely to adopt new tools utilizing AR and VR. However, prior to developing and marketing an augmented reality offering, brands need to learn how aware consumers are of AR and VR and what their expectations are when it comes to such tools.  

Related Article: Why Augmented Reality Will Be Your Next Customer Channel

VR Not Living Up to Hype, AR Growing

Jon Cheney, CEO of Lehi, Utah-based Seek argues that the buzz around AR and VR are two very different stories right now. VR is not living up to the hype that many people expected it would. AR, on the other hand, is growing incredibly quickly. “I believe AR is growing because it is so much more capable of enhancing everyday life. VR takes users to other worlds, which can be great for gaming, simulation, and some types of training. But AR can turn almost any pair of glasses in the world into something more,” he said.

The decrease in AR headset shipment is not about the number of headsets on the market, but rather about the importance that will come from the applications as well as the content that makes these devices attractive. Once the right apps are available for headsets, they will grow in demand because their usability will increase, Erik Murphy-Chutorian, CEO and founder of 8thWall said.  “We know that AR is excelling in the entertainment and gaming space, but there is also great potential for AR technology to be applied to various utility applications,” he said

Confusion Between AR and VR?

“There is a general confusion around these two terms. AR and VR are two related concepts with very different applications,” Alan Santillan of Chicago-based G2 Crowd said. "AR does exactly what it says it does. It augments, or increases, a user’s visual perception through a screen by adding digital objects or elements. Users watching this augmented reality in real time through a device choice can manipulate the objects with on screen buttons or other forms of input.”

This is different from VR which creates a completely virtual environment that a user is able to experience and manipulate to a certain extent.  He added that he believed headset shipments for VR are down 30 percent at the moment, most likely because of users’ collective inability to make progress with the hardware. “The pricing limitation that comes with VR has not come down to a level where it can be a commonplace item in the household the same way an iPad or a video game console might be,” he said.

This does not mean that the AR market is declining. These industries are still in stages of infancy and have a lot of room for growth.

Jacob Lowenstein, who leads AR-related business development and product strategy for San Francisco-based Samsung NEXT points out that AR today is largely used for visualization in various forms, including data and analytics as well as more practical tasks like furniture placement, cosmetics, toys, building models, training materials among others.

These use cases are valuable, but they barely scratch the surface of the technology's potential. Currently there is no support for persistence or shared experiences, as objects are stored locally on the user's device limiting collaboration between people as they won't necessarily experience the same thing or have a common point of reference. There is also huge potential in mobile AR for use cases like navigation and contextual awareness.

AR Needs More Diverse Apps and Delivery Ecosystems

Angela Fulcher is founder and president of the Strategis Group. She thinks the role of AR in the enterprise is clearer than that of VR. She said that the tech world is at a AR market precipice similar to when smartphones were first launched. A driver in the smartphone rapid adopter curve was the massive app market, which emerged to create content so that people could use the hardware in a wide variety of ways. It's clear the AR ecosphere will likely take off in the same manner.

“Another factor to consider is that AR technology can currently be used with smart mobile devices [iPhone 6S and newer and Android equivalent]. AR wearables (are still being developed and still have technology challenges to overcome before they are mass adopted, and will likely take a few years,” she added.

Related Article: Virtual and Augmented Reality Are Ripe for the Enterprise

Considerations for XR or Mixed Reality

Fulcher points out that VR is a computer-generated simulation of a three-dimensional image or environment that can be interacted with in a seemingly real or physical way — and so immersive that if a person puts on a VR headset they could become so engaged they could walk into a wall.

There is one further technology related to both AR and VR that users and enterprises should be aware of, notably XR, or Mixed Reality. XR is a mix of multiple technologies, referring to all real-and-virtual combined environments and human-machine interactions generated by computer technology and wearables.  AR and XR, as a result, have a much greater scope and market potential. “It is significant to know that all of the tech giants (Google, Microsoft, et al) have spent billions of dollars already, building and launching their AR platforms (AR hardware, AR navigation, AR developer kits). This tells us that it is not if augmented reality will explode, it is a matter of when,” she said.

Collaborating, Communicating With AR

Augmented Reality is a natural evolution of the computer interface, from 2-dimensional to spatial computing, which transforms the workplace as we know it. It is a radical departure from traditional computing using screens and keyboards, honoring 3-D reality, Joe Mikhail, chief revenue officer at Meta said.

Immersive AR is the highest form of AR, which overlays the digital upon the physical world and enables people to manipulate holograms with their hands. It’s a far more intuitive way to communicate, collaborate and create.

While mobile phone-based AR may capture headlines, real business value comes from headset-based AR. Headset technology is the only way to achieve photo-realistic images and a large field-of-view, both prerequisites for end-user productivity with AR-enabled applications. The biggest and most immediate impact this has in the workplace is to enhance every office worker’s ability to transfer knowledge.

This creates a new way to intuitively share ideas in 3D, improving sales, training and product design processes, which is has significant impact on business from increased revenue, to improved time-to-market, to lowering overall product development cost.

Immersive Content Friction

There are still a number of limitations that are holding back the current reach for AR experiences, including the friction involved in getting immersive content into users’ hands. Brands are now constantly competing to make their web presences more compelling and to increase the time it takes to implement these updates. To stay competitive, companies will need to be continuously improving their products and customer experiences to stay up to date with the latest in AR technology.