Augmented Reality is Eying Vertical Markets

When we take the term ‘Augmented Reality’ at face value it describes a device or service that ‘enhances reality by adding something to it’.  In our CE-driven world of mobile addiction, most associate the term augmented reality with a method of providing additional visual information to the user by means of a head mounted display, typically embedded in some version of eyewear.  Of course the broader definition would also include head-up displays as they are used in airplanes and automobiles today.  As a matter of fact it would also include all those audio devices that are used in museum and other venues to provide more information about the subject at hand.

If we use the term augmented reality as a description of a head mounted display that allows the user to see computer generated information on top of the real life, we basically describe the famous devices used in many science fiction movies ranging from Iron Man and Terminator to many others.  The first movie I ever saw using such a technology was Time Rider, a 1982 movie with limited success.  I am sure you may have seen this technology in another movie at an earlier or later date, but it shows you that the idea was floating around for a long time.  As the movies were all based on special effects, the reality of such a device was much more complicated than that.

The first real implementation was in experimental helmets of fighter jet helmets by small companies focusing on the technologically impossible.  As the display industry developed microdisplays, smaller projection systems enabled such head mounted displays in a more reasonable form factor and at a much more reasonable price point.

With increasing performance of such systems, the interest of larger companies emerged slowly until Google took the plunge and surprised the world with the Google Glass headset.  This device caught the attention of many analysts and reporters, making it the world’s most famous augmented reality headset so far.  The reality of Google Glass is not only that it sparked the interest in augmented reality headsets, but also by being the first headset that is still officially sold as a beta testing device after being originally shown to the world in the April of 2012.  So far the availability is still limited to the ‘Glass Explorer’, as Google calls their ambassadors of augmented reality.  There were many other devices available before the Google Glass headset, with better performance and lower prices, but none has even reached the commercial success of the Google Glass beta testing as of today.

With augmented reality entering the consumer space, the focus shifted from the underlying technology to the usability aspect.  So far many applications have been suggested but none are considered a killer application for augmented reality headsets.  Without enough headsets in the market to test the various applications we are looking at a chicken versus egg dilemma.  Without enough testing in the field very few applications will be developed and without a good application no consumer interest will emerge.

In recent months the interest of the augmented reality headset makers seems to have shifted to the vertical enterprise markets, where the value is not measured by the number of headsets sold, but by the information provided to the user.

We have heard of testing in emergency services by Epson in Japan, and a transmission of an orthopedic surgery by a Chinese doctor.  There are also other uses in vertical markets that would make a lot of sense.

IndustryARC an international market research and analytics company has released a forecast for the use of augmented and virtual reality technology in the healthcare industry.  They assess that the market for this new technology reached US$280 million in 2013, a number that will increase to US$641 million by 2018. Currently there are only a few applications available like from Hologic and WorldViz.  With the availability of consumer grade headsets, healthcare specific applications will drive the adoption in this industry.

There are two ways to look at this development, either the smaller companies are going after an attainable market in the vertical markets to avoid direct competition with the large CE companies or the consumer market interest is currently so low that a wide spread sales effort does not make sense for this technology.  Either way it seems that for the moment the vertical markets are driving the development and implementation of the augmented reality technology.  This may not be a bad approach, considering how long it took the head-up display technology to address a mass market like the automotive industry.

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About the Author: Norbert Hilldebrand

Norbert Hildebrand focuses on new materials and technologies influencing the consumer electronics markets and their effect on the display industry. Mr. Hildebrand has 22 years of R+D, production and business development experience in European and North American industries. He was contributing to North American high tech markets such as FED, microdisplay, biotech, semiconductor, fire resistant glazing and anti-ballistic glazing industries. His areas of focus include wearable, display materials (especially glass-based) and mobile products. He has done many of the forecast analyses for Insight Media’s multi-client and custom market forecast reports and is very strong in this area.