Spatial computing – including AR, VR, and other immersive tech – continues to alter the ways that we work, play, and live. But there have been ups and downs, characteristic of hype cycles. The pendulum has swung towards over-investment, then towards market correction.
That leaves us now in a sort of middle ground of reset expectations and moderate growth. Among XR subsectors, those seeing the most traction include AR brand marketing and consumer VR. Meta continues to advance the latter with massive investments and loss-leader pricing.
Beyond user-facing products, a spatial tech stack lies beneath. This involves a cast of supporting parts. We’re talking processing muscle (Qualcomm), experience creation (Adobe), and developer platforms (Snap). These picks and shovels are the engines of AR and VR growth.
So how is all of this coming together? Where are we in XR’s lifecycle? And where are there gaps in the value chain that signal opportunities? This is the topic of ARtillery Intelligence’s recent report Reality Check: the State of Spatial Computing, which we’ve excerpted below.
Picking up where we left off in the last report excerpt, AR’s handheld present is a stepping stone to its faceworn future. We’re talking of course about AR glasses. Though haven’t arrived en masse, they represent a fully-actualized AR modality that will unlock its true potential.
In fairness, AR glasses have arrived considering enterprise deployments. There, AR glasses’ style crimes aren’t the same issue as they are in consumer markets. Though there are form-factor issues such as comfort and heat, enterprise AR has a clearer ROI and an early spending lead.
Notably, consumer/enterprise spending shares could flip as AR glasses gradually gain style and “wearability.” Consumer markets are generally larger than enterprise markets due to population sizes. But enterprise spending often leads in early days of emerging tech. That’s the case in AR.
But that shift could take several years, not just due to requisite technical advancements, but also cultural acceptance. In summary, consumer AR is the bigger opportunity while enterprise AR is the sooner opportunity. Let’s take a closer look at the latter, as it’s already coming together.
AR at Work
While consumer challenges are being worked out, AR glasses have found less resistance in the enterprise. As noted, the technology’s style crimes are less of an issue, and AR has a clearer ROI story. That includes operational efficiencies brought by line-of-sight visualization.
This represents a sort of enterprise metaverse. Led by tools like PTC Vuforia, Scope AR, and Microsoft Mesh, remote collaboration and support can be enabled. This will importantly span enterprise verticals and environments – from corporate settings to factory floors.
In functions like industrial assembly and maintenance, AR can expedite task completion and reduce errors by lessening cognitive load from “mentally mapping” 2D instructions to 3D space. There are several macro benefits too, such as distribution and retention of institutional knowledge.
Drilling down on the latter, it’s all about mitigating knowledge loss from personnel retiring. Because baby boomers are retiring at a greater pace, not to mention the Covid-era “great resignation,” it’s getting harder to retain institutional knowledge – an expensive problem for enterprises.
For all the above reasons, ARtillery Intelligence estimates that enterprise AR spending will grow to $52.6 billion by 2026, a 44.3 percent compound annual growth rate. This includes head-worn AR (hardware and software) and mobile/tablet-based AR spending (software only).
But even though AR boasts these advantages, it’s easier said than done to get to the point of realizing them. Practical and logistical barriers stand in the way – such as organizational inertia, politics, change management, and fear of new technology among key stakeholders.
For example, the biggest stumbling block for enterprise AR is the dreaded “pilot purgatory.” This is when AR is adopted at the pilot stage but never progresses to full deployment. It’s the biggest pain point in industrial AR, and there are many reasons for it…most of them cultural.
We’ll pause there and pick things up again in the next report excerpt with more Insights. Meanwhile, check out the full report here.