This is a contribution from ARtillry partner, Transformation Group’s Shel Israel. It’s excerpted from his latest issue of AR Business Weekly.

ARBW #6: A Half-Billion AR iPhones–THEN Apple Headsets

By Shel Israel

Much has been said about the imminent introduction of the new Apple iPhone and iOS 11 operating system, particularly by Robert Scoble and me. I have called it the trigger point into the transformational era for AR and VR. Currently, we are in the pre-trigger moments where most brands and professionals care little about immersive technologies, but after the launch in the next two or three months, they will abruptly feel pressures from customers, employees and competitors to adopt and deploy new strategies.

But for Apple, it seems to be the opening act, as the above patent sketch reveals. Filed recently by the Cupertino company, it confirms to us that Apple realizes what must start in handsets will eventually end up in AR headsets and it is important for business strategists and planners to understand that now.

It also confirms what Robert and I wrote in our recent book, The Fourth Transformationwhere we predicted that AR would migrate from smart phones to smarter glasses over the next decade.

In June, when Apple announced the AR capabilities coming in their September releases, Scoble and I were both thrilled and concerned. Apple revealed its understanding that if you are going to introduce radically transformative technology to billions of people, it would be a smart market strategy to introduce it on devices that everyday people already use, devices which today are at the center of digital life as we all know it.

But the handset is not as immersive as the headset. The capability of a headset AI will make user experiences far more personal and best of all people’s hands will be free to do all sorts of other things.

Don’t get me wrong what Apple is doing shortly after Labor Day is huge. It fires a cannonball across the bows of corporate ships that are reluctant to change course until they must and that time is coming this year. The Transformation is not only sooner than you may think, it is also larger.

Most estimates I have seen predict by year-end there will be 200-300 million iPhone users walking into stores and visiting sites on AR. That is big enough for me to get excited, but I was unsure of  how the media was coming to this stupendous user estimate, so I turned to my favorite analyst who told me that the real number was about double what I had been seeing.

AR for 1 in 9 People

By year end there will be a half billion iPhones and iPads with AR capabilities—perhaps a tad more. That’s nearly one-in-nine humans on Earth. You can be sure that Samsung and other Android phone makers will follow Apple’s lead next year, making the number faster and the transformation to AR phones larger.

Here’s where I got the numbers.

Mike Boland is co-president of the San Francisco VRARA professional organization and a Transformation group strategic partner. He is a career analyst. Most recently, he founded ARtillry, the first market intelligence service focused exclusively on immersive technologies.

Mike took a look back, then made projections for the near-term future, concluding that by New Year’s Day 2018, there will be a little over 505 million AR-enabled iPhones and an additional 30 million iPads. As the chart shows, he projected that by 2020, Apple will have more than 850 million AR-enabled handheld devices, roughly one device for every nine people on Earth today.

Like I keep saying, the iPhone launch is a trigger point that will change relationships between companies and customers. It is also one of those historic flex points where some leading brands will stumble only to be replaced by startups that most of us have not yet heard of. It means that your customers—particularly the younger ones—are going to expect a new kind of experience that you need to be preparing to provide pretty quickly perhaps by this Christmas.

Such a recommendation would historically have been impossible, but Apple has made AR app development not just feasible, but easy and perhaps even fun in the form of its ARKit developers tools. In less than two months, thousands and thousands of developers have been showing off outstanding tech capabilities online. Robert and I have been posting several of the best every day in our Apple AR World Facebook group.

Richard MacManus, a tech journalist, gushed recently, “I’m betting this will be the biggest expansion of apps in the App Store since the iPad came along in 2010.” I would not bet against him if I were you.

Read the entire issue here.

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Disclosure: ARtillry has no financial stake in the companies mentioned in this post, nor received payment for its production. Disclosure and ethics policy can be seen here.

Header image credit: Apple