www.juniperresearch.com AUGMENTED REALITY A Market, Primed Whitepaper 1 AUGMENTED REALITYA Market, Primed 1.1 Introduction AR (Augmented reality), also known as mixed reality, has a long history with roots that can be traced all the way back to the beginning of the 20th century. Indeed, the concept first appeared in L Frank Baums 1901 novel The Master Key: An Electrical Fairy Tale, in which the protagonists special glasses overlay a coded analysis of an encountered persons personality. Like many such visions of the future, its realisation was severely hampered by the lack of technological capability, not to mention the absence of the Internet.Fast-forward a few decades to the era of Hollywood and several motion pictures supplemented by CGI (Computer Generated Imagery) have demonstrated the possibilities of AR to the public; famously through The Terminators enhanced vision and Minority Reports advanced computing display. Nonetheless, these films have served to inflate consumer expectation to the point where, owing to a combination of factors, the real-world experience has been disappointing. Indeed, it is these displays of seamless melding of the physical and virtual world that make the technology so appealing, given the incredible potential that such capability would yield.1.2 Definition From a high-level point of view, one can consider AR to leverage technology to overlay elements of a virtual world on the physical one. Therefore, the difference between VR (Virtual Reality) and AR becomes immediately apparent in that VR transports the user to an entirely computer-generated world, where visual perception of the physical world is lost. Indeed, the fact that AR requires interaction with the physical world makes the technology, in some senses, more complex than VR. The latter leverages data from a pre-determined world, while AR must gather and process data from a dynamic world. From a service delivery perspective therefore, AR requires not only the ability to receive data through some form of communication, but also the ability to process and understand this data in real-time. AR is defined as a technology that identifies and tracks data from the physical world, in combination with data drawn from digital sources, to present the user with a view of the physical world overlaid with relevant computer-generated information. 2 AUGMENTED REALITYA Market, Primed 1.3 How AR Works 1.3.1 Marker-based Systems One method for an AR system to recognise elements of the physical world is through the use of so-called markers that, when processed through the camera, alert the system that relevant information for overlay can be downloaded from the Internet.As is the case with many encoded markers or tags, QR (Quick Response) codes were originally conceived for use in the industrial sector to rapidly scan and track products along the supply chain. With the advent of the Internet-enabled smartphone and accompanying camera, apps have been developed to allow the wider public to scan these codes and access further information. Figure 1: QR Code Source: Juniper Research QR codes have found common use in AR as markers, particularly due to the fact that they are well suited for use where mobile devices are concerned. Certainly in the consumer space, the mobile device presents one of the largest addressable markets for AR and as such, the QR code represents a widely recognised symbol where it is understood that scanning the code will provide the user with some form of further information. 1.3.2 Markerless Tracking Where the intention to present AR is in a particularly dynamic environment, such as while on the move, outside and so on, it is infeasible that markers will be positioned on the majority of surrounding objects. Consequently, in the majority of envisioned use cases, where markers are unavailable, an image recognition system is required. Owing to the fact that real-world entities, such as humans, vehicles and buildings present far greater complexity to the system than a simple 2D marker, image recognition software requires high processing power. Passive: the user simply views AR through a suitable display, where the camera is orientated away from the user. Essentially, this is a view-only mode, where the use does not interact directly with the AR presentation.Active: here, the user is tracked by a camera and analyses of these movements are translated to the image display. For example, the user may be presented with AR where movements of the hands are tracked to allow the user to manipulate the AR objects presented. In some cases, markers are placed on the users body to track movement, although for the purposes of this research, we will only consider cases where tracking is achieved through image recognition. Markerless AR currently represents the greatest challenge for AR development, due to the complex computation algorithms required to create an effective system. Functionally, such a system must complete several steps even before analysis of the scene can be performed.3 AUGMENTED REALITYA Market, Primed 1.4 AR Market HurdlesDespite having been demonstrated to the masses via the medium of film, as well as the fact that the AR concept has spent many years in development, the technology has still not gained significant market traction. Indeed, in 1991, Geoffrey Moore described the difficulty for breakthrough technologies in crossing the chasm; a typical market development cycle for new technology can be seen in the figure below: Figure 2: Technology Adoption Cycle Source: Juniper Research The chasm, as illustrated above, represents the common difficulty in convincing the masses that a nascent technology is worth parting with hard-earned dollars to buy. In the case of AR, part of that difficulty has come from the fact that, at least on the B2C (Business to Consumer) front, the value proposition has not yet fully developed. Following the mass adoption of the smartphone, AR has largely been seen as a gimmick technology with little practical use in real-world4 AUGMENTED REALITYA Market, Primed scenarios. Looking back at the transition period from featurephones to smartphones, consumers were willing to give up several days worth of device battery life in exchange for a significant jump in the value offered by the smartphone. Emulating this jump is, to some degree, essential if AR is to gain enough traction to be adopted into common use. 1.5 The Value Chain As with any technology, the ultimate delivery to the end user is through a value chain, which includes several actors collaborating together to present the final service. Juniper Research has identified the following actors as crucial to the enablement of AR: Figure 3: AR Value Chain Source: Juniper Research 1.5.1 Chipset Suppliers Chipset manufactures form the basis from which the device AR experience engine can be driven. Given that one of the core functions of AR is understanding images captured by the camera, the GPU is particularly important during the object tracking and recognition processing pipeline. 1.5.2 Components The heart of an AR system is composed of a camera and an optical display to overlay digital information on the physical world. The ability for the camera system to transmit usable information to the image processing pipeline is essential in markerless AR. Image quality in digital camera systems is affected by: SNR (signal to noise ratio) Inability to produce sufficient contrast The next core element of AR is the display, serving as the means by which virtual images can be superimposed on the physical world. Indeed, the quality of the display will likely play a major role in the ultimate success of AR, due to the need for a convincing presentation that does not severely clash with the naturally high-resolution physical world. 1.6 AR Forecast Summary Juniper Research expects AR games across smartphones, tablets and HMDs (head-mounted devices) to reach 420 million annual downloads in 2019. Forthcoming apps such as Ronrik may drive user engagement and interest, although the predominant model of smartphone and tablet AR gameplay; where a marker is used to trigger AR content; makes for a poor user experience. 5 AUGMENTED REALITYA Market, Primed Current variants of HMDs do not lend themselves to AR games due to poor processing power and battery life. Therefore, Juniper Research expects significant traction for games to start from 2017 onwards. Figure 4: Smartphone, Tablet & HMD AR Games 2019: 420m Downloads Source: Juniper ResearchNorth America Latin AmericaWestern Europe Central & Eastern EuropeFar East & China Indian Sub ContinentRest of Asia Pacific Africa & Middle East6 AUGMENTED REALITYA Market, Primed Order the Full Research Augmented Reality: Consumer, Enterprise & Vehicles 2015-2019 Junipers expansive AR research provides a comprehensive perspective on the 3 key platforms for the future of mobile AR: Smartphones, Head-Mounted Devices and Tablets. Our latest research brings an in-depth assessment of AR systems in vehicles. Key Features Analysis across 4 key platforms: Smartphones; Tablets; Head-Mounted Devices; and Consumer Vehicles. App usage analysis for 6 app categories: Games, Search & Discovery, Lifestyle, Multimedia, Social Communications and Enterprise. Insights and strategic recommendations for key stakeholders. Interviews with ARToolworks, Atheer Labs, Blippar, Catchoom, InGlobe Technologies, Innovega, Metaio and Vuzix. Key player capability and capacity assessment, together with market positioning matrix. Key industry executives identified in our Movers & Shakers section. Whats in this Research? Executive Summary - Key trends, competitive analysis, market forecasts and strategic recommendations (PPT). Market Trends & Competitive Landscape - Strategic analysis of market dynamics, drivers and trends, together with vendor capability assessment and matrix (PDF). Market Sizing & Forecasts Regional and sector analysis together with forecasts for key metrics, including adoption, mobile app spend and vehicle service revenues (PDF). Interactive Forecast Excel Highly granular dataset comprising more than 57,000 data points, allied to What-If Analysis tool giving user the ability to manipulate Junipers data (Interactive XL). Publications Details Publication date: March 2015 Author: Steffen Sorrell Contact Jon King, Business Development Manager, for more information: Jon.King@juniperresearch.comJuniper Research Ltd, Church Cottage House, Church Square, Basingstoke, Hampshire RG21 7QW UK Tel: UK: +44 (0)1256 830001/475656 USA: +1 408 716 5483 (International answering service) Fax: +44(0)1256 830093 http://www.juniperresearch.com