The State of Reality: The Battle for AR
Several big companies are hard at work developing the killer Mixed Reality headset vying for a slice of what will likely become the biggest consumer electronics market in a post-smartphone world. Google pioneered the field with Glass, followed closely by Microsoft with their HoloLens device. Magic Leap then came along with an evolution to those designs, moving the battery and computing power from the headset to a separate unit to be placed in a pocket, linking the two with a wired connection. This new design provides more flexibility in fitting in the electronic components and this design allows for a more comfortable fit for the end-user due to the weight being taken away from the head-mounted unit. These are probably the reasons why Chinese manufacturer Vivo adopted this layout for their own headset powered this time by a smartphone.
Some other big names in the technology business have announced their efforts towards developing some sort of mixed reality devices -or AR Glasses as they are commonly called- in the future. Facebook disclosed its plans for such a device in 2018 , filed a patent for the design and later restructured its internal development units to create a dedicated group for the AR glasses project. Amazon went a different way, in an intelligent move considering the nascent nature of the technology, and instead of making its own product in-house, they decided to invested in North, a company that has already launched a product in the space.
One thing no one can argue about is that there’s s no shortage of problems waiting to be solved in existing Mixed Reality headsets. The biggest hurdles in the path to ‘good enough’ -and subsequent mass adoption- are the ‘computing power vs. battery life’ conundrum, display quality, bulky design, non-intuitive control schemes and prohibitive prices. As always, the consistent byproduct of sub-par hardware in this category of consumer products is lack of content.
It’s very difficult at this point to determine which of the companies mentioned previously will be first to overcome these issues in the race to become the Apple of AR, but we can sure make some educated guesses. To start out, we can go ahead and claim with a high degree of confidence that any Chinese company will have a hard time seizing a big market share outside of Asia as long as their privacy policies include keeping data on Chinese servers and making it available to state agents. Despite the 2nd generation Glass still being developed under its own roof, we can also consider Google sidelined at least for the time being, as it appears they have put all of their consumer-grade AR glasses eggs in Magic Leap’s basket. Amazon’s investment in North appears to be more of a ‘let’s tests the waters’ initiative than a serious commitment considering the currently limited features of the product and it’s narrow future potential. With that being said, Amazon might decide to buy the company outright in the future, assimilate it and throw a bunch of money their way in an attempt to push out a product quickly as soon as the technology becomes good enough. The problem with this is that they will still be a leg down on the main competitors due to the lack of a content ecosystem. Magic Leap has one of the best proposals for mixed reality experiences deployed today but it looks like they’re encountering some problems in attracting content developers to their platform. Most of them see the device’s price of $2295 as to large of a bridge for regular consumers to cross and choose to not waste their already limited resources in developing for a device with so few adopters.
Facebook, on the other hand, does not have a physical mixed reality device yet, nor does it have the solid AR software that runs them¹. It does, however, have some other big assets that are sure to make it a front runner in this race. The task-relevant maturity coming from its Oculus products will come in handy when designing the hardware and, since there are a lot of transferable skills between VR and AR, also the software of their future AR glasses. This will most like mean that Facebook’s hardware will have a good ergonomic design and their user experience will be intuitive and easy to use straight out of the box and. Another critical point in order to achieve mass adoption will be price and, due to Oculus’ already optimized operations processes, we can expect Facebook’s will be amongst the most competitive in the field. Another asset upon which the company can rely on to give their hardware function on Day 1 is their existing marketplace of entertainment experiences. Once the company offers its users a compelling hardware package, users will flood their platform and APP developers will have the proper incentive to improve and adapt their existing VR experiences into AR versions. And thus, network effects are inevitable.
Facebook has just one job to do between now and the eventual launch date of their mixed reality solution: clean its image. If the company finds itself in the middle of another privacy scandal when the device comes out -like it was the case when they launched the Portal- they’ll be in quite the uphill battle, regardless of any other value propositions the ecosystem might have.
Microsoft is at its second Mixed Reality headset and, similar to the second generation Google Glass device, its aimed for use in the enterprise space and marketed explicitly as a Development Kit. On top of their experience in designing actual MR hardware and UX, the solution from the Redmond outfit is also recommended by its recent leaps when it comes to AI and computer vision technologies, which will no doubt have a big role to play in MR devices of the future. Similarly to Facebook, Microsoft already has the Windows Mixed Reality marketplace where they offer 2500 virtual reality APPs and any future consumer-focused mixed reality product from them is almost guaranteed to have some integration with their Xbox Live platform. The one big challenge I see left to be overcome before launching a their product is bringing down the physical size of their headset to something that would be acceptable to be worn in public.
Now that we’ve filtered out our top contenders for the title of Czar of Consumer Products of the Future, I have some shocking news for for you. The Apple of AR will probably be…
Apple started out as the company that was brilliant at building personal computers for your desk. Then they became the leader in building computers for your pocket and after that they built a computer for your wrist. Now it’s time for them to put a computer on your face.
For most of its history, Apple hasn’t really been doing a lot of its own research, their strength was more in taking existing components and putting them together in a new consumer product that had world-class design and and intuitive user experience. In recent years though, as technological cycles become increasingly shorter and competitors multiply, the company has been ramping up its investments in R&D every year. Even though it’s very difficult to identify the exact products and services these investments are focused on and how much each one consumes since they haven’t been released yet, judging by the limited amount of innovation in its latest flagship products -read iPhone, iPad, Macs-, we can safely assume the bulk of the recent hike in the R&D funds is split between the AR glasses project and the self-driving car effort².
Apple has been laying the foundations of future mixed reality experiences for more than two years now, ever since they launched ARKit, their API that allows developers to leverage newly added depth-sensing cameras and computer vision chips in their smartphones and tablets for the creation of hand-held augmented reality experiences. They’ve also made multiple acquisitions in the AR/VR space over recent years, companies like Flyby Media, Spektral, Emotient, Metaio, Faceshift, Akonia Holographics and have filed for multiple patents depicting mixed reality headsets. This, along with the company’s public stance and the increasing amounts of time allotted for AR demos in recent Keynotes, shows us that they believe it to be the technology to carry the company forward in the future.
In the context of the saying ‘Needs’ trump ‘wants’ in times of war, Apple’s search for the next big consumer product is definitely more on the need side of things as the war approaches and the combatants show up to the battlefield. As the smartphone market matures, Apple is undoubtedly feeling pressure from its investors to diversify the product lineup into areas that would keep its growth in line with values seen in preceding years. When performance in previous quarters was mainly attributable to the most successful technological consumer product ever created and your company’s market cap amounts to $935B, satisfying investors’ thirst for continued growth makes things quite difficult as entering a market with small potential won’t quite cut³ it. Despite the company’s claims that it intends to pivot its business model towards a more services-reliant one in the future, the reality of the matter is that 90% of their revenue at the moment comes from hardware and and this cannot change overnight. Apple-made hardware devices will be the primary vehicles of these services, as Apple TV+, the video streaming product they’re betting the farm on, will not only be its only such service available to be used on non-Apple hardware but this hardware is also limited to smart TVs and some online media players -not smartphones, not tablets.
By looking at the wisdom of disruption theory telling us that established companies tend to be good at improving things they have long been good at doing, it would be hard for the untrained eye to pick Apple as a favorite; or any other company for that matter since no one company is good at making AR glasses right now. It’s only when you look at these devices through the lens of ‘computers on your face’ and after remembering Apple’s track record of coming up with next generation technological consumer products again and again that it makes sense for them to be in the best position to do it one more time.
A quick look back at the problems awaiting to be solved in current mixed reality experiences will tell you why Apple has the capabilities of surpassing them all and has the luxury of almost ignoring one of them. The now-famous industrial design team will have an easier time in solving the design of the hardware when compared to their competitors and the software will be reliable, intuitive and respectful of your privacy. Apple will ship a product as soon as these components are in a good enough stage. They also have a huge platform in the AppStore with 1.4 billion active users and 20 million developers who can start working on content right now with the confidence that the future device will use ARKit over a version of iOS. When it comes to price, the company doesn’t need to try too hard, in part due to their other strengths enumerated above but also because, traditionally, their loyal users are more willing to pay a premium over the competitor’s prices.
In the light of recent news of Apple disbanding -at least- one team that was working on AR Glasses, I’m remain confident that Apple’s first version of augmented reality glasses will be announced in 2021. The device will most likely be a -preferably wireless- companion to your iPhone and I expect the device to make some leaps in terms of user-friendliness compared to existing devices. By putting off the launch of their product the company can learn from others’ mistakes and wait for technology to progress to the point where they can offer their customers an Apple-quality experience.
Here you can find a look at the current state of AR and VR while here you can look into how the two could coexist in the future
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¹Facebook’s SparkAR portal is geared towards enthusiasts who want to get started with AR development in the artistic space.
²Of course money is still going towards other efforts like new chips, more healthcare-oriented designs of the next AirPods and Watch and the 2020 iPhone that’s supposed to have significant improvements over current models, but these are incremental amounts.
³I don’t see Apple investing in technology that will allow it to produce a foldable phone, even if they announced intent to create new factories as they diversify their supply chain outside of China. By the time foldable phones will come down in price, MR devices will be out and about and the effort would have been wasted.
