The augmented reality (AR) market is set to grow from $1 billion today to $130 billion by 2030. It is also predicted that AR will grow at a faster pace than virtual reality (VR) during this period and according to Goldman Sachs, AR has the potential to become the next big computing platform. The number of use cases has risen in recent years, with Snapchat filters and games such as Pokemon Go, yet, we are only scratching the surface. Many companies, big and small, are looking to capitalize on this trend, and we take a look at three that are investing heavily in AR.
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Apple (NASDAQ: AAPL) is most well-known for the invention of the iPhone along with its continued innovation, and it will be no surprise that it is betting on AR. CEO Tim Cook stated that “AR is the next big thing” and Apple can leverage its existing hardware to tap into this growing market.
In the last few years, Apple has launched products like ARKit to enable AR in apps, along with the acquisition of SensoMotoric, known for its AR hardware. Apple’s latest products, the iPhone 12 and iPad Pro reveal that the company is integrating AR capabilities into its products. Both of these devices have integrated a LiDAR scanner that allows users to scan their surroundings and visualize things through computer-generated objects. This can be used for AR shopping apps like IKEA or to play AR games.
Along with claiming to have the largest AR platform, there are also rumors that it will release a VR headset as a precursor to AR Apple Glasses in the coming years. Despite the rumors, one thing is certain, Apple is serious about entering the AR space.
Facebook (NASDAQ: FB) is another big tech player making strides in the AR and VR space via its Facebook’s Reality Labs division. It has been reported that almost one-fifth of its employees are working in this division and indicate its accelerated efforts in the space. CEO Mark Zuckerberg in a recent podcast stated that he thinks it will be “the next big computing platform”.
Facebook is in the middle of a 10-year plan where AR is one of the three main pillars, and Reality Labs has a mission to give people the tools to feel more connected. In 2014, Facebook acquired Oculus and since then has released AR/VR headsets that are relatively cheap, allow users to play games, and have got some stellar reviews. Zuckerberg stated that Facebook’s aim is to release products at as low a cost as possible to get them out to everyone.
Facebook’s AR ambition goes beyond gaming and is developing lightweight and fashionable AR glasses. These are being designed to be used in everyday situations and to tell you what you want to know and infer what you want to know to “become an extension of your body”. One example is that it will ask you to play your favorite playlist when you walk outside your door.
Unity Software (NYSE: U) is a cross-platform game engine that primarily facilitates the creation, operation, and monetization of video games and has over 793 customers generating over $100,000 annually. It is expanding into AR and VR and estimates its overall market opportunity to be $29 billion.
The majority of revenue comes from gaming, while its engine has powered AR-driven products such as Pokemon Go. The potential of AR and its uses beyond gaming is another exciting avenue for growth. Unity recently acquired AR construction platform VisualLive, which will complement its existing offering in the construction industry. Its solutions are also used in architecture and engineering by companies like Toyota, where management stated it has seen “good traction”.
Another development is a partnership with Snap Inc. that allows Snap’s technology to be used by game developers along with expanding its advertising reach. This partnership should be mutually beneficial as Snap is also investing in AR.
Unity is significantly smaller than Apple and Facebook and has less cash to put towards research and development. However, it will benefit from the trend in both the gaming and construction industries and may have more upside potential.
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