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As we roll into 2025, it’s time for our annual ritual of synthesizing the lessons from the past twelve months and formulating the outlook for the next twelve. 2024 was an incremental year for AR & VR, which both continue to gradually push forward in gaining mainstream traction.
Highlights include the rise of mixed reality as a standard in VR, non-display AI glasses, and next-gen hardware like Meta Orion And Snap Spectacles. We also saw the symbolic and practical end of the previous era of XR, as defining devices like Microsoft HoloLens retreated from the market.
So where is spatial computing, and where is it headed? Our research arm ARtillery Intelligence’s recent report Spatial Computing: 2024 Lessons, 2025 Outlook tackles these questions. After recently publishing 2025 predictions here on AR Insider, we shift gears to 2024 lessons.
To that end, what were the biggest takeaways in 2024 in the wide world of spatial computing? There were many, but today we’ll zero in on XR’s most scalable format today: mobile AR. What’s the state of the sector? Where is value being created today? And who’s leading the way?
The Business Case
Mobile AR scales due to its ability to piggyback on 3 billion+ global smartphones. This is a tradeoff, as it doesn’t achieve AR’s immersive potential due to a small screen that needs to be held up. But it does achieve the reach that’s required for a real business case. It’s AR’s practical reality.
For example, one of the most popular forms of mobile AR is social lenses. These lend themselves to brand sponsorship and paid distribution as they include dimensional product visualization or try-ons. This category, which we call AR marketing, is a leading AR revenue source.
To put some numbers behind that claim, AR marketing is estimated to grow from $4.7 billion in 2023 to $11.8 billion by 2028. Driving that revenue, users are demonstrating high engagement with AR lenses as a way to elevate already-popular activities including media sharing and selfies.
Brand marketers are in turn attracted to those eyeballs. AR lets them flex creative muscles and transcend 2D media where they’ve been confined for years. Lastly, there’s strong ROI demonstrated in the campaign performance metrics that continue to validate AR marketing.
However, we should report in fairness that 2024 saw some softening in demand for AR marketing. This was partly due to a metaverse market correction. Though AR marketing isn’t necessarily the same thing as the metaverse, many lump them together, including some brand marketers.
Ups & Downs
As for who’s doing what to tap into demand for immersive marketing, Snapchat is a clear leader. This is due to its dedicated focus on AR, and the medium’s alignment with its “camera-company” mission. Meta for some time also loomed large with global scale in Facebook and Instagram.
However, in 2024, Meta discontinued its AR developer platform, Spark. Though it will continue to make AR effects in-house – some involving brand collaborations – Meta no longer supports open AR development on its platform. This will end up benefiting Snap, as well as TikTok.
Speaking of TikTok, its Effect House AR creation platform is the latest entrant and could do for TikTok’s AR scale what Lens Studio did for Snap. This will depend on whether or not TikTok will devote Snap-like investment in the platform, not to mention its geopolitical outcomes.
Beyond social AR lenses, another opportune format is visual search. Led by Google Lens and Snap Scan (and now Apple), visual search lets users point their phones at physical objects to identify them. This carries the same user intent that makes web search such a strong business.
That user intent will be the foundation for visual search monetization, which is only getting started. Google Lens and others are in early stages of conditioning user behavior, which requires ample time. But this is meant to lay the foundation for paid search or sponsorship models to come.
We’ll pause there and return in the next installation with more sub-sector breakdowns, including headworn AR and VR. Meanwhile, check out the full report.
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