The augmented & virtual reality (AR/VR) market currently stands at a global valuation of $19 billion. Spurred by the success of ventures such as Facebook’s Oculus Rift and Sony’s PlayStation Virtual Reality, the market is expected to touch $500 billion by 2025.
But the above products were clear consumer favorites. For every successful product launch, 10 other AR/VR products failed to live up to the hype. Meta Glasses, ODG & Blippar – 3 AR/VR companies folded in the span of 3 weeks in early 2019. While some analysts note that the market is yet to mature for AR/VR, the runaway success of this technology in the video game industry reveals that it is just a matter of finding the right application.
Every week, conflicting reports are filed noting the success and failure of AR/VR ventures, which is why we decided to get on the ground and perform an industry-wise reality check.
Artificial Reality, Real Healing
Right at the surface level, the application of AR/VR in healthcare is obvious. General diagnostics and medical training powered by AR/VR has eliminated the need for costly trial and errors programs.
The best example of this is VR surgery run-throughs. With the help of VR, surgeons can rehearse the surgery beforehand and experience possible outcomes without actually having to deal with them in reality. Using Microsoft’s HoloLens technology, FundamentalVR has implemented this very solution.
VR Healthcare Training is another possible field of application. Here, med students study the human anatomy layer by layer and can intuitively grasp the mechanics of the human body. On the other hand, AR & VR provide interactivity which provides much more profound insight into nuances of the body functions.
The general sentiment in this industry is very positive. EU’s Horizon 2020 program has allocated about $92 Billion for the development of AR/VR applications. Market researchers peg the CAGR for this market at 30% for the forecast period of 2018 to 2023.
Manufacturing The Future
By Application, AR/VR use cases in manufacturing can be segmented based on:
- Product Design & Development
- Safety & Training
- Maintenance & Repair
- Communication & Collaboration
By 2026, the global virtual reality in the manufacturing industry is projected to reach USD 14,887, a CAGR of ~40% from 2018.
R&D centers are developing new use cases across segments in the manufacturing industry.
Lockheed Martin engineers use VR glasses to design and develop the F-35 warplane. The defense giant relies on this technology to improve their efficiency by 30% with an accuracy of up to 96%. Aerospace manufacturing seems to be pioneering the implementation of VR with Boeing extensively relying on VR to map electrical wirings for their fuselage.
Automobile giant Ford has been using VR in some form as early as 2000 to fine-tune the design of their automobiles. By simulating road and weather conditions such as snow and rain, mechanics are able to deliver a safer driving experience according to Elizabeth Baron, VR and Advanced Technical Specialist at Ford.
A research paper published on Visualization in Engineering notes the rising application of combining infrared images with visible images to created AR-based system maps. These maps allow engineers to see electrical systems, mechanical equipment and fluid systems through thermovision.
On a more impressive note, Dubai Electricity and Water Authority uses Microsoft’s HoloLens to visualize scenarios, consolidate information, and for remote maintenance of their smart power plant.
A New Era For Marketing
Saving the best for the last, the potential scope for AR/VR in marketing is incredible. Facebook’s acquisition of Occulus has been widely panned as a crucial strategic maneuver that will set the tone for the future of marketing. Their latest project, Horizon, promises users a “social experience where you can explore, play and create in extraordinary ways. In Horizon, you’re not just a visitor. You’re part of what makes it great.”
Now mix the vast pool of data mined by Facebook, and you’re looking at personalized advertising delivering straight to your VR headsets. As dystopian as it sounds, the development has the marketing world exciting by the sheer potential of new advertising models.
To promote their range of outdoor apparels and accessories, ADIDAS partnered with emerging tech marketing agency Somewhere Else. The campaign followed two extreme athletes climbing the Delicatessen mountain; a 360-degree journey that could be followed by users wearing a VR headset. While the brand has not released any solid numbers to back up this experimental marketing strategy, it is clear that the move has hooked new customers and inspired brand loyalty.
On a more practical scale, Ikea’s AR app helps consumers use their phone camera and to see how furniture would look like in their home or office.
Redefining Media & Entertainment
When it comes to adopting niche technologies, the gaming industry always seems to be at the forefront. Pokémon Go’s success is proof positive that immersive experiences are the future of entertainment.
The demand for live, immersive and shareable experiences is skyrocketing, and AR/VR ticks all the boxes.
In fact, as of 2019, the most-valued customer experiences all feature the use of AR/VR. While concerts with AR-generated on-stage characters has already been done, more immersive applications in sports, arts & museums, theme parks and theatre productions are yet to gain traction despite consumer demand.
So, why the failure to meet consumer demand?
Challenges to Mainstream Adoption
The chief challenge is bulky and expensive hardware. Even the cheaper AR sets retail at about $500, making them out-of-reach for most consumers.
Not to mention the concern for public safety. Using AR/VR hardware must be done under controlled environments only since the user loses track of their actual reality temporarily. This adds another layer to the pre-existing public skepticism around AR/VR as people are unaware of the benefits of this technology and any concern for safety will only exacerbate their skepticism.
The lack of content that fully utilizes AR/VR functionalities is also a reason for the hesitation. However, newer games like Half-Life Alyx have shown that if done correctly, VR games can become blockbuster hits.
All Signals Point To Real Growth
AR/VR has started to move away from the realm of hype to actual applications. A cursory exploration reveals that these are high-value applications with the potential to revolutionize industry standards. Along with AI & IoT, AR/VR will also act as the catalyst for the next industrial revolution.
With the AR/VR expected to reach a valuation of ~USD 600 billion by 2025, now is a good time to keep a pulse on the industry. If you’re subscribed to Draup’s Signals Cast app, then you would’ve noticed the barrage of opportunity signals triggered on the app dashboard.
These signals can be used to identify potential for partnerships within any industry. Moreover, you can use the Ecosystem tool to narrow down on key players across industries to pitch them highly-relevant AR/VR solutions.
Draup’s databases are populated with data points from over 280,000 global companies and are used by enterprise sales teams to differentiate and highlight their pitches.