augmented reality glasses - market overview - automotive perspective
DESCRIPTION
Despite the media hype surrounding Augmented Reality (AR) glasses, I am still sceptical as to the average consumer adoption based on the current core value propositions the market is offering. There is to date no single clear-cut pain point, outside the professional industries, this type of product alleviates. This report is an introduction to some of the observations I've made, and the main markets where I could see a viable use case, for AR glasses. Feel free to share, spread, make use of as you find appropriate, as long as you acknowledge me as a source for your own market research. Note(s): 1. I know some of the products mentioned in this report technically speaking aren't viable augmented reality products. However, in so far as an end consumer is concerned, this hardly makes much difference to them, and they use cases AR glasses present still very much applies to Project Glass and similar offerings.TRANSCRIPT
– Augmented Reality Glasses – Automo3ve Perspec3ve
Author: Hugo Nordell Date: August 11, 2013-‐
Market Research Report
§ The interac<on between so?ware (plaBorm) and hardware (glasses) providers will determine the prevailing technological standard
§ Automo<ve corporates are advised to place many small bets on several technologies, so?ware and hardware, and closely follow trends and user uptake
§ Compe<ng subs<tute technologies may provide a fragmented market and hinder rapid mass-‐market adop<on
§ More conspicuous and obtrusive than other wearable technology
§ Poten<al regulatory risks and security & integrity concerns could reinforce cultural barriers to mass-‐adop<on
§ Augmented Reality (AR) blends computer-‐generated sensory input with the real world
§ AR glasses have come into mainstream media focus over the past year following Google’s announcement of Project Glass
§ Two main technologies exist; (1) Head-‐Mounted Displays (HMD) and (2) Virtual Re<nal Displays (VRD)
§ HMD is poised to drive market growth first
§ $5Bn+ addressable market size in 2016 based on aggregate research and key segments
§ 95% expected CAGR 2011 -‐ 2017 § 1% end-‐consumer penetra<on rate by 2017 § Sports & Fitness is the most a`rac<ve segment based on adop<on, barriers to entry and addressable market size
§ Key growth drivers are ease-‐of-‐use, design and price point
Execu3ve Summary
Augmented Glasses Overview Market Overview
Hardware & So?ware Integra<on Key Risks & Threats to Adop<on
Source: Juniper Research (2010), ResearchAndMarkets (2011), BI Intelligence (2013) 1
Market – Trends & Developments Google Rela<ve Search Trends – January 2012 to August 2013
Source: Juniper Research (2010), ResearchAndMarkets (2011), BI Intelligence (2013), Google Trends (2013) 2
Wearable technology Smartwatch* Augment* real* glass* Google glass
Highlights: § This shows normalized rela<ve number of searches compared to the total number of searches worldwide on Google § Google Glass clearly drives the search sta<s<cs, while “Augment* real* glass*” is negligible § Nonetheless, AR glasses are slowly coming into the spotlight of the mass-‐consumer markets
§ Juniper Research es<mates that the AR mobile applica<on market will reach $1.5Bb in 2016
§ Business Insider Intelligence aggressively es<mates Google glass sales to exceed $11Bn in 2018
§ ResearchAndMarkets predicts overall AR market of $5.2Bn by 2017
§ Mul<ple near-‐to-‐eye technologies are being developed with different levels of immersion and applica<on to glasses, and may broadly be categorized into (1) HMD and (2) VRD
§ Subs<tutes, such as HUD or audio enabled (e.g. Siri) have so far seen broader market adop<on
Augmented Reality Total Market Size Compe<ng Technologies & Subs<tutes
Market – Key Customer Segments
Source: Own matrix design, ResearchAndMarkets (2011), BI Intelligence (2013), NMC (2012), Juniper Research (2010) 3
Barriers to
Entry
High
Low
Rate of Adop3on Fast Slow
Sport & Fitness
Automo3ve & Manufacturing
Marke3ng & Retail
Educa3on
Traveling & Tourism
Military & Security Firms
Market size: $3Bn+* by 2018 Use cases: § Sports & Exercise progress
tracking & professional sports
Market size: $1.5Bn by 2015 Use cases: § Personalized ‘offline’ marke<ng § Assist High St. sales personnel
Market size: $100M+* by 2017 Use cases: § Direct environment interac<on
with loca<ons and notable sights
Market size: $500M+* by 2017 Use cases: § Visualize key dashboard items § Maintenance & repair assistance
Market size: <$50M* by 2017 Use cases: § Interac<ve learning § Head-‐up notes for teachers
Market size: $1Bn+* by 2016 Use cases: § Crowd control, Intel updates § Target iden<fica<on & objec<ves
Key takeaways: § This matrix breaks key customer segments into 6 main categories, ranked by qualita<vely and historical probable rate of
adop<on and barriers to entry. Arrow direc<on indicates increasing a`rac<veness § An a`rac<ve customer segment is one with rela<vely low barriers to entry and a fast rate of adop<on. Example brands
above are category leaders in their respec<ve fields and poten<ally strategic partners for driving end-‐consumer adop<on § Corporate segments are not directly split from ul<mate end-‐users, although Automo<ve & Manufacturing together with
Military & Security segments are likely to have largest end-‐user exposure toward a corporate environment
Compe33on – Products
Source: Company websites, Showcase material, Huffington Post (2013), Business Insider (2013), TechCrunch (2013) 4
Producer
Key Features (as described by
producer)
Price (USD)
Launch date
Product
§ Receive only § Incoming emails § Text messages § Tweets § Facebook updates
Notes
§ GlassUp S.R.L-‐CL
§ Requires Android, iOS smartphone
§ Bluetooth
§ $399
§ Feb 2014
§ Travel direc<ons § Photo/Video Rec. § Phone, tex<ng § Translate foreign
languages
§ Google, Inc
§ Bluetooth § Recommended:
Android or iOS Smartphone
§ $1,500 (Developers)
§ Late ‘13 – Early ‘14
§ Gesture recogni<on § Dual cameras § Full scale 3D
augmented projec<ons
§ Meta SpaceGlasses
§ Windows PC § Unity 3D for app
development
§ $667 (Developers)
§ Aug 2013
§ Na<ve, HMD & smarphone coopera<ve mode
§ Receive texts, video & email
§ Vuzix Corp.
§ Runs on Android § Spa<al & Posi<onal
awareness § Supports iOS
§ Rumoured $500
§ Late 2013
Key takeaways: § Key drivers for adop<on are ease-‐of-‐use, applica<on access, price and level of obtrusiveness § Google Glass and GlassUp are closest to final produc<on and market themselves more heavily toward
end-‐consumers, than Meta and Vuzix do § The price range is wide, indica<ng that the producers aim to a certain extent for different customer
segments and usage § No Augmented Reality glasses product has yet successfully penetrated the mass-‐consumer markets § Other poten<al Augmented Reality glasses producers to look for are Recon Instruments, Innovega and
Lumus-‐Op<cal
Compe33on – Value Chain
Source: Own assessment of potenOal value chain & based on recent investments by large corporates 5
Frame Design Electronics (Hardware)
Op3cs PlaPorms & SDKs
Omnipresent Corporates Expected to be heavily ver<cally integrated
(Luxovca) (Luxovca)
(Kering)
Key takeaways: § The above matrix illustrates the value chain as it is expected to evolve in
the coming 3 to 5 year period § Frame design firms will play a key role in overcoming the obtrusive and
conspicuous look of current AR glasses § PlaBorm providers will have to drive developer interest, and subsequent
mass-‐adop<on will most likely follow from range and breadth of apps § Google, with its Project Glass, is expected to drive early adop<on and
indicate rela<ve importance and balance between providing plaBorms and unobtrusive finished hardware
Impact – Automo3ve Industry
Source: MBX Systems (2011), Computerworld (2011), 6
§ Both Automo<ve manufacturers and industry suppliers stand to gain from connec<ng AR glasses with the current in-‐car experience, for both drivers and passengers
§ Manufacturers stand to possibly gain cost reduc<ons if AR glasses can provide drivers with essen<al func<ons currently supplied by the dashboard, including speedometer, travel routes, traffic informa<on and car vital signs
§ Suppliers may see a substan<al source of revenues being threatened from AR glasses suppor<ng vital driver func<onality and will have to diversify revenue streams into heavier so?ware & hardware integra<on to mi<gate this risk
§ AR glasses also stand to aid manufacturing facili<es by providing key informa<on to workers, minimizing human error and improving efficiency, much the same way the iPad is currently penetra<ng produc<on floors
Broad Industry Implica<ons Leveraging for the In-‐Car Experience
Key Considera<ons for Automo<ve Companies
§ Main focus will likely lie with the driving experience as the market growth and scales – Easy to use support applica<ons – Proac<vely warn drivers of poten<al adverse driving condi<ons
§ Passengers will also be a poten<al source of revenues and immersion – In-‐car entertainment systems may also be experienced through AR glasses, providing 3-‐4 more people with addi<onal use cases
§ Minimising AR glass obtrusiveness and enabling func<onal so?ware will stand to help mi<gate safety risks, regula<on and legisla<on concerns
§ Auto companies must take into considera<on the long-‐term implica<ons of choosing one technology over another, especially in terms of so?ware & hardware integra<on as the Augmented Reality market for in-‐car experiences is s<ll nascent
§ Large corporates, on both the so?ware and hardware side, will drive exposure toward end-‐users and ul<mately mass-‐adop<on
§ Google, Qualcomm, Apple & Microso? will push for building integrated plaBorm solu<ons with exis<ng so?ware ecosystems
§ Automo<ve companies are well-‐posi<oned to place many small bets and see how the offerings in the market play out
§ No device has yet successfully penetrated consumer markets, but many new glasses are set to be launched late 2013 – early 2014 § 2014 will be a decisive year for wearable technology
§ Mul<ple compe<ng plaBorms and technologies will drive use case applica<ons § Fragmenta<on could hinder mass-‐adop<on and create a wait-‐and-‐see scenario
§ All market research indicates that the total Augmented Reality market is set to grow rapidly in coming years
§ $5Bn+ addressable market size in 2016 § 1% popula<on penetra<on rate by 2017 § AR glasses are poised to poten<ally fit well into a growing wearable technologies market if key players focus on ease-‐of-‐use, plaBorm integra<on and minimizing obtrusiveness
AR Glasses Are Here to Stay
Corporates Will Drive Mass-‐Adop<on Moving Forward – What’s Next?
Conclusion
Source: Google, Project Glass (2013)
7
References & Further Reading 1) Juniper Research. Mobile Augmented Reality A`racts Leading Brands as Juniper Research forecasts $1.5 billion revenue stream by
2015. February 2011. h`p://juniperresearch.com/viewpressrelease.php?pr=225 2) ResearchAndMarkets. Global Augmented Reality (AR) Market Forecast by Product (HMD, HUD, Tablet PC, Smartphone) for
Gaming, AutomoOve, Medical, AdverOsement, Defense, E-‐learning & GPS applicaOons (2011 – 2016). December 2011.h`p://www.researchandmarkets.com/reports/1963197/global_augmented_reality_ar_market_forecast_by
3) ResearchAndMarkets. Augmented Reality & Virtual Reality Market by Technology, Sensor & Components, ApplicaOons & Geography (2013 – 2018). July 2013.h`p://www.researchandmarkets.com/research/8xb9x6/augmented_reality
4) ResearchAndMarkets. OpportuniOes for Augmented Reality: 2013 – 2022. February 2013.h`p://www.researchandmarkets.com/reports/2517391/opportuni<es_for_augmented_reality_20132022
5) Ashish Badyal. Augmented Reality and Business. January 2013.h`p://www.slideshare.net/ashua12/business-‐perspec<ve-‐augmented-‐reality
6) BI Intelligence. Google Glass Will Be An $11Bn Market By 2018. May 2013.h`p://www.businessinsider.com/google-‐glass-‐11-‐billion-‐market-‐by-‐2018-‐2013-‐5
7) IMS Research. Wearable Technology Market to Exceed $6 Billion by 2016. August 2012.h`p://imsresearch.com/press-‐release/Wearable_Technology_Market_to_Exceed_6_Billion_by_2016
8) Mind Commerce. Augmented Reality in the Ba`lefield 2012 – 2016. July 2012`p://www.mindcommerce.com/Publica<ons/AR_Ba`efield_2012-‐2016.php
9) Gary Hayes. Augmented Reality: Widespread AdopOon and Barriers to Entry. July 2010.h`p://www.slideshare.net/hayesg31/augmented-‐reality-‐barriers-‐drivers-‐for-‐widespread-‐adop<on
10) David Stein. Trend Assessment – Augmented Reality. April 2012.h`p://www.slideshare.net/MrDavidStein/trend-‐assessment-‐augmented-‐reality
11) SIIA Report. U.S. EducaOon Technology Industry Market: PreK-‐12. 2011.h`p://www.siia.net/index.php?op<on=com_docman&task=doc_view&gid=3886&Itemid=318
12) IBIS World. Museums Market Research Report. July 2013.h`p://www.ibisworld.com/industry/default.aspx?indid=1640 13) Haydn Shaughnessy. Why Google Glass Will Not Be Another iPhone. June 2013.
h`p://www.forbes.com/sites/haydnshaughnessy/2013/06/25/why-‐google-‐glass-‐will-‐not-‐be-‐another-‐iphone 14) Ping Jintao. Vuzix Smart Glasses vs Google Glass. March 2013.
h`p://www.smartglassesnews.org/vuzix-‐m100-‐smart-‐glasses-‐vs-‐google-‐glass/
Note: for some market size figures, both a prudence approach and actual es<ma<on analysis have been performed to scale back what I consider to be too aggressive es<mates from the referenced sources. These numbers are indicated with * in the slides