Augmented Reality Glasses - Market Overview - Automotive Perspective

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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.

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Augmented Reality Glasses - Market Overview - Automotive Perspective

  1. 1. –  Augmented  Reality  Glasses  –   Automo3ve  Perspec3ve   Market  Research  Report   Author:  Hugo  Nordell   Date:  August  11,  2013-­‐  
  2. 2. Execu3ve  Summary   Augmented  Glasses  Overview   Market  Overview     §  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   Hardware  &  So?ware  Integra<on   Key  Risks  &  Threats  to  Adop<on   §  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   Source:  Juniper  Research  (2010),  ResearchAndMarkets  (2011),  BI  Intelligence  (2013)   1  
  3. 3. Market  –  Trends  &  Developments   Google    Rela<ve  Search  Trends  –  January  2012  to  August  2013   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   Augmented  Reality  Total  Market  Size     Compe<ng  Technologies  &  Subs<tutes   §  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   Source:  Juniper  Research  (2010),  ResearchAndMarkets  (2011),  BI  Intelligence  (2013),  Google  Trends  (2013)   2  
  4. 4. Market  –  Key  Customer  Segments   Fast   Rate  of  Adop3on   Marke3ng  &  Retail   Traveling  &  Tourism   High   Barriers  to  Entry   Low   Sport  &  Fitness   Slow   Market  size:  $3Bn+*  by  2018   Use  cases:   §  Sports  &  Exercise  progress   tracking  &  professional  sports   Automo3ve  &  Manufacturing   Market  size:  $500M+*  by  2017   Use  cases:   §  Visualize  key  dashboard  items   §  Maintenance  &  repair  assistance   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   Educa3on   Military  &  Security  Firms   Market  size:  $1Bn+*  by  2016   Use  cases:   §  Crowd  control,  Intel  updates   §  Target  iden<fica<on  &  objec<ves     Market  size:  <$50M*  by  2017   Use  cases:   §  Interac<ve  learning   §  Head-­‐up  notes  for  teachers   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   Source:  Own  matrix  design,  ResearchAndMarkets  (2011),  BI  Intelligence  (2013),  NMC  (2012),  Juniper  Research  (2010)   3  
  5. 5. Compe33on  –  Products   Product   Producer   Key  Features   (as  described  by   producer)   §  GlassUp  S.R.L-­‐CL   §  §  §  §  §  Receive  only   Incoming  emails   Text  messages   Tweets   Facebook  updates   §  Google,  Inc   §  §  §  §  Travel  direc<ons   Photo/Video  Rec.   Phone,  tex<ng   Translate  foreign   languages   §  Meta  SpaceGlasses   §  Vuzix  Corp.   §  Gesture  recogni<on   §  Dual  cameras   §  Full  scale  3D   augmented   projec<ons   §  Na<ve,  HMD  &   smarphone  coopera<ve   mode   §  Receive  texts,  video  &   email   §  Requires  Android,   iOS  smartphone   §  Bluetooth   §  Bluetooth   §  Recommended:   Android  or  iOS   Smartphone   §  Windows  PC   §  Unity  3D  for  app   development   §  Runs  on  Android   §  Spa<al  &  Posi<onal   awareness   §  Supports  iOS   Price  (USD)   §  $399   §  $1,500  (Developers)   §  $667  (Developers)   §  Rumoured  $500   Launch  date   §  Feb  2014   §  Late  ‘13  –  Early  ‘14   §  Aug  2013   §  Late  2013   Notes   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   Source:  Company  websites,  Showcase  material,  Huffington  Post  (2013),  Business  Insider  (2013),  TechCrunch  (2013)   4  
  6. 6. Compe33on  –  Value  Chain   Frame  Design   Electronics  (Hardware)   (Luxovca)   (Luxovca)   (Kering)   Op3cs   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   PlaPorms  &  SDKs   Omnipresent  Corporates   Expected  to  be  heavily  ver<cally  integrated   Source:  Own  assessment  of  potenOal  value  chain  &  based  on  recent  investments  by  large  corporates   5  
  7. 7. Impact  –  Automo3ve  Industry   Broad  Industry  Implica<ons   Leveraging  for  the  In-­‐Car  Experience   §  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   §  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     §  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   Source:  MBX  Systems  (2011),  Computerworld  (2011),     Key  Considera<ons  for  Automo<ve  Companies   §  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   6  
  8. 8. Conclusion   AR  Glasses  Are  Here  to  Stay   §  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   Source:  Google,  Project  Glass  (2013)   Corporates  Will  Drive  Mass-­‐Adop<on   Moving  Forward  –  What’s  Next?   §  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   7  
  9. 9. References  &  Further  Reading   1)  2)  3)  4)  5)  6)  7)  8)  9)  10)  11)  12)  13)  14)  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     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     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     ResearchAndMarkets.  OpportuniOes  for  Augmented  Reality:  2013  –  2022.  February  2013. h`p://www.researchandmarkets.com/reports/2517391/opportuni<es_for_augmented_reality_20132022   Ashish  Badyal.  Augmented  Reality  and  Business.  January  2013. h`p://www.slideshare.net/ashua12/business-­‐perspec<ve-­‐augmented-­‐reality   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     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     Mind  Commerce.  Augmented  Reality  in  the  Ba`lefield  2012  –  2016.  July  2012 `p://www.mindcommerce.com/Publica<ons/AR_Ba`efield_2012-­‐2016.php     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   David  Stein.  Trend  Assessment  –  Augmented  Reality.  April  2012. h`p://www.slideshare.net/MrDavidStein/trend-­‐assessment-­‐augmented-­‐reality     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   IBIS  World.  Museums  Market  Research  Report.  July  2013.h`p://www.ibisworld.com/industry/default.aspx?indid=1640   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   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  

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