There’s been lots of speculation about the size of the mobile AR opportunity. We keep hearing “hundreds of millions of devices.” But the best way to truly quantify the opportunity is to look at the installed base of compatible devices — today and how it’s trending into tomorrow.

We’ve done that for ARkit and ARCore. The ARCore projection was done a few weeks ago, based on current market factors (72 million ARCore-compatible Android devices by year end and 3.6 billion by 2020). But the ARkit numbers were calculated in July, which now compels a revision.

With the benefit of Q3 sales figures (Apple’s Q4), and last month’s Apple event, we’ve reworked the figures slightly. The verdict: There are 355 million ARkit compatible iPhones today, growing to 434 million by year end, and 673 million by 2020. This was a small but meaningful downgrade.

The difference from our previous estimates come down to last quarter’s iPhone sales, and the supply chain bottlenecks projected for the iPhone X. Going into 2018, we’ll see compatibility ramp quickly, driven by the iPhone replacement cycle (2.5 years) that quickly phases out older phones.

How did we arrive on these figures? The methodology involves a unit penetration model based on cumulative iPhone sales that go back 10 quarters (average iPhone replacement cycle). It also factors in ARkit compatibility (A9 chip or greater) starting with October 2015’s iPhone 6s release.

iPad’s aren’t included in the above figures but should total about 32 million ARKit-compatible units by the end of the year. The smaller sum has a lot to do with components like processing and optics. AR apps could also be less natural on the iPad due to range of motion and portability.

There’s of course a lot more to it, including strategic implications for developers choosing where to apply time and resources. We take a deeper dive in the latest ARtillry Intelligence Briefing and will have more excerpts, data and tidbits in the coming weeks.

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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: Gizmodo