One of the top targets in the market sizing of our research arm, ARtillery Intelligence, is reliable formula inputs. Half the battle is devising strong bottom-up financial models that reflect the market’s unit economics….and the other half is filling in the blanks.

This process unfolds across subsegments of the spatial spectrum — everything from consumer VR to enterprise AR to camera commerce. But the foundation is often the hardware base: what’s the upper limit of devices on which various flavors of monetization can occur?

In mobile AR for example, an escalating share of devices are AR-compatible as newer hardware phases in to the replacement cycle. For example, in the iOS world, anything post-iPhone 6s (or A9 chip) can run AR experiences. Things are more complicated in Android land.

But to layer in more inputs and confidence, good market-sizing often taps operators to get a sense of the activity levels they’re seeing. One such company is R2U, which has provided us with treasure trove of data from its AR advertising business — the focus of this week’s data dive.

Mobile AR Users Approach 800 Million

Fallback Rate

One of the key questions that’s been answered by R2U’s data is how many smartphones are web-AR compatible. Among other signals, they track a “fallback rate” for ad placements. If a device is not web AR compatible, it serves a fallback screen with an error message.

Using this rate as a proxy, R2U determined that 90.22 percent of smartphones are AR-enabled. To reiterate, we’re talking specifically about web AR. These are AR experiences that are launched through the mobile browser, giving them broader applicability than app-based channels.

Going deeper on R2U’s fallback-rate, it can be segmented by platform. The compatibility rate for Android devices is 86 percent, while iOS scores higher at 99 percent. This variance tracks with other evidence we’ve gathered that Android devices have a longer replacement cycle.

There’s also notable longitudinal trending. R2U’s August 2019 data indicates an AR compatibility rate of 63 percent – 73 percent. This means that in two years, web AR has grown 20-30 percentage points in compatibility among smartphones….quickly approaching full coverage.

Unlocking Web AR

This growth tear that Web AR has enjoyed is partly due to its inherent advantages noted above — delivery through the ubiquitous browser. But it’s been further unlocked through the work of 8th Wall and others to make AR work on commodity hardware and ubiquitous RGB cameras.

Speaking of 8th Wall, it’s another company that ARtillery has worked with to refine forecast formula inputs. That recently yielded a web AR compatibility estimate of 3.1 billion devices — which jives with R2U’s 90 percent compatibility figure given 3.48 billion global smartphones.

To put web AR’s share further into perspective, Facebook’s Spark AR is projected to have 1.6 billion AR-compatible smartphones, followed by ARkit (1.25 billion), TikTok (1.05 million), ARCore (891 million), and Snapchat (515 million). So Web AR has the clear compatibility lead.

Why is all of this important, beyond inputs in our obsessive market-sizing endeavors? AR players sizing up opportunities or modeling their addressable markets can optimize platform decisions or developer resources accordingly. And that will continue to be a moving target.

Speaking of which, the above just scratches the surface of R2U’s first-party data that they’ve been nice enough to share. We’ll be back in future Data Dive installments with more breakdowns.

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