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There’s something about the number 100 million — not just in its symmetry and roundness but its historical significance in consumer tech products. It’s the number that signifies a meaningful installed base, and network effect.
This came up earlier this week when Google announced ARCore. Through the requisite process of trumpeting the platform’s capabilities, Google mentioned that it’s shooting for a goal of 100 million ARCore-compatible smartphones by the time the platform launches later this year.
Our ears perked up because this is the number we and our friends at Transformation Group have examined as the threshold for consumer ubiquity. Once it’s reached, there’s a large enough installed base to attract and support an ecosystem of content creators, developers and vendors.
History Repeats
This is precisely what we saw with smartphones. Once 100 million units were sold globally, the mobile industry accelerated and could support an app economy and several other moving parts. It also resulted in years of nauseating claims from new entrants that it was the “year of mobile.”
100 million also supports network effect, and a key business/tech law that (for once) isn’t Moore’s Law. Metcalfe’s law, coined by Etherent inventor Bob Metcalfe, states that networks increase in value exponentially for every node added. And an inflection point comes at… 100 million nodes.
Back to the world of AR & VR, industry leaders have likewise begun to look at 100 million units as a milestone. Most notable is Unity CEO John Riccitiello, who carries an admittedly cautious outlook for VR hardware penetration… and its current distance from the 100 million mark.
“If there isn’t at least a near term probability of 100 million devices in the marketplace that can play it, [developers] won’t build,” he asserted at VRLA. “A hundred million devices creates an umbrella for the entire industry to flourish and I think we’re a few years away from that.”
By The Numbers
According to ARtillry’s calculations we are indeed far from that goal: There are about 17 million VR headsets sold to date… and many of those are Cardboard. This realization has recently washed over the industry, and caused it to shift focus to the nearer term promise of mobile AR.
On that front, ARtillry has done the math. There are about 2.6 billion smartphones on the planet. Those all aren’t AR-compatible but will be over the next 2.5 years (average hardware replacement cycle). That includes 380 million ARkit-compatible iPhones today, and many more to come.
Back to ARCore, it will have the longer term advantage in scale as we examined yesterday. That’s due to its openness and web approach, but also Android’s greater scale than iOS, with about 2 billion devices globally. Most if not all of those will be ARCore compatible in two to three years.
Meanwhile, the near-term goal is rightly 100 million compatible devices. And as often happens when markets reach that magic number, they accelerate due to heightened interest, market entrants, content and investors. So the march to 200 million will likely be even faster.
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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.