Augmented and virtual reality
A market in need of structure if it hopes to keep its promises
Augmented and virtual reality (AR/VR) solutions continue to make strides. Services have been launched in multiple industries, but more structure is needed to ensure these solutions can reach their full potential. The avenues being taken today are encouraging, and 5G will be a key enabler of the developments being ushered in by AR/VR.
A growing AR/VR market
AR/VR applications are being used in a number of sectors of activity, including entertainment, industry 4.0, travel and tourism, training, health, retail and public works. Virtual reality is still the most developed of the two, with the first generation of headsets hitting the market in 2016. Augmented reality, meanwhile, which still relies mainly on tablets and smartphones, is starting to catch on in entertainment, making its first major splash with Pokémon GO, but also in the business world as part of industry’s digital transformation, and in retail. In terms of market value, video games are the top earner in the field of virtual reality entertainment – both personal and group. This sector already has an efficient business model, capable of remunerating everyone along the value chain.
A market that will grow by five times on four years
Growth of the global AR/VR applications and headsets market
A host of players involved, but a starring role for internet giants
Today’s AR/VR solutions and services market is a fragmented one. Immersive experience specialists include companies such as Tobii, for eye tracking and control solutions, Specktr and its wireless gloves, and Varjo with its human-eye resolution performance booster. The distribution of AR/VR content, which will be increasingly digital, involves tech sector heavyweights such as Sony, Samsung, Apple, Google, Oculus (owned by Facebook, which is betting heavily on VR) and HTC. The services and content segment is very piecemeal, populated by a host of players. The headset sector is more concentrated, with only a few companies dominating the sale of second generation autonomous mobile headsets like the Oculus Quest and HTC’s VIVE Cosmos.
Leader Sony being challenged by Facebook
Progression of global VR hardware sales by supplier
The industry needs more structure to achieve its full potential
Two industry strategies are playing out side by side. First is the integrated strategy, marketing an AR/VR solution that includes a content hosting platform, a selection of products and an online shop. Second is the intermediary model, where the supplier of the technical solution operates an online shop that distributes content supplied by others. In addition, the standardisation of AR and VR technologies, the advent of 5G and the development of second generation headsets will pave the way for services in a number of industries. AR could have major benefits for retailers, for instance.
5G's immersive experience promises
Bandwidth requirements by type of content/application
5G will kick the AR/VR market into gear
AR/VR mobile applications are developing more rapidly than those for fixed devices, thanks to the lower hardware and software costs. Second generation autonomous mobile headsets and popular applications are helping fuel the phenomenon. Here, 5G will be a major facilitator of AR/VR mobile adoption: it will supply the ultrafast connections needed to produce the highly detailed textures that are crucial in VR headsets. 5G will also deliver very low latency. As a result, the technology will give AR/VR applications and services a real boost, especially for VR cloud solutions. This will be a boon for a number of sectors, including VR cloud gaming, industry 4.0, immersive games, health… And, as a counterpoint, these applications should accelerate the rate of adoption for 5G plans, which will be a boon for telecom operators.