Data Point of the Week is ARtillry’s weekly dive into data from around the XR universe. Spanning usage and market-sizing data, it’s meant to draw insights for XR players, or would-be entrants. To see an indexed archive of data briefs and slide bank, subscribe to ARtillry Pro

In the first half of 2018, the AR industry has grown in number of companies by 50 percent. This is according to The Venture Reality Fund. The group tracks a comprehensive index of qualified AR companies through its Global Augmented Reality Landscape — a nice meter stick for the industry.

There are of course several other signals for industry health, but company launches is one barometer. This also correlates to VC funding (a separate figure), a classic leading indicator for long-term growth. ‘Long-term’ is the key phrase, as AR is clearly early, especially consumer AR.

In our XR investor insights report last year, it was also clear that one attractive target is “building block” technologies. That investment thesis appears to sustain — especially given the rise of the AR Cloud — and aligns with the above realizations about playing a long game with frontier tech.

Everyone likes a good industry landscape. Source: The VR Fund

In the meantime, AR has some bright spots in nearer-term revenue and scale. There are apps, albeit not many, reaching meaningful penetration. Niantic’s Harry Potter: Wizards Unite will be key moment of truth for AR’s “phase 2.” Niantic’s momentum, plus lots of new IP, instills confidence.

Quantifying that confidence, we’ve pegged consumer AR revenues to reach $803 million this year. Thats mostly mobile AR software (we don’t count smartphone sales as AR revenue), which is subdivided by premium apps and in-app purchases, the latter being dominant in the near term.

AR, along with the rest of the XR spectrum, will be a moving target. We’ve seen a clear correction to 2016-2017 exuberance, but that will be followed by a more realistic pace of product traction and growth. Just like the 2000’s dot-com correction, the exuberance wasn’t wrong… it was just early.

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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: The VR Fund