- China led the world in spending on Virtual Reality /Augmented Reality (AR/VR) technologies in 2020. Next in line was the US (USD5.1 billion), followed by Western Europe (USD3.3 billion), and Japan (USD1.8 billion)[i]. Meanwhile, the rest of the world spent USD2.8 billion on AR/VR. This value is estimated to grow to a total of USD70 billion by 2025.
- Despite the maturity of the AR/VR technology stack, widespread adoption still lags, and there is a paucity of matured used cases. Many companies are adopting a wait-and-see approach, giving way to industry leaders to set the stage for an implementation strategy.
- Mainstream adoption for AR/VR is dependent on enabling technologies, viz., Cloud, 5G and IoT, to bridge the digital divide between laggards and early adopters. The growing adoption of the cloud and the increasing availability of 5G will accelerate adoption.
This article investigates the development of AR/VR adoption and explores the main factors driving the recent growth of adoption for this technology.
Technology timeline of AR/VR development
Introduction of Microsoft HoloLens, Oculus Rift, and Pokémon Go (2016)
VR and AR gained notable attention in 2016 after the release of Pokémon Go. It played an integral role to introduce and familiarise consumers with the capabilities and use-case of the technology. The same case applies to Microsoft HoloLens & Oculus Rift, which indicated the significance of AR/VR for the tech giants. However, several obstacles limited the wider adoption of AR/VR technologies during this period, which led to a downturn:
1. User experience
Immature equipment technology, including bulky VR headsets with limited computing power, failed to support the use of AR/VR applications in daily life. The experience has led to many negative feedbacks such as nausea, dizziness, inconvenience, frozen screens, etc.
2. Lack of enterprise adoption
With a high cost associated with AR/VR, companies naturally remained cautious over their investments into the technology. In addition, the lack of business use cases during this period amplified concerns on the return on investments for such technologies.
3. Lack of content
With limited use-cases and technological limitations such as strong cellular networks, AR/VR developers struggled to provide meaningful and exciting content. This limitation translated to a lack of engagement with the end-users, who eventually lost interest in the technology.
Why should you consider AR/VR implementation now
Sustained commitment by technology leaders
Ever since the introduction of those key products, prime technology players, including Microsoft, Google, and Facebook, continued to invest in the development of AR/VR heavily. Venture investments attributed to AR/VR technology amounted to USD22.1 billion from 2016 onwards. This led to a couple of notable advancements in the industry:
- Introduction of Microsoft Mesh & Horizon Workrooms by Facebook – a collaboration solution for enterprises
- Sales of Occulus’ new-generation headset, Occolus Quest 2, outsold previous headsets sales numbers in 5-months post-launch.[ii] These figures show that there is a shift in the cultural acceptance of this technology.
- Launch of ARKit and ARCore software development kits for applications on Android and Apple
- First VR company with a unicorn status, Rec Room valued at USD1.25 billion[iii]
Rapid advancements of supporting technologies
The implementation of AR/VR depends on a combination of technologies that supports the development and deployment of the applications. Recently, these supporting technologies have made significant strides, making it more accessible for enterprises to adopt AR/VR. Some of the important technology enablers are as follows:
1. The 5G rollout
5G is a clear standout for its expected influence to drive adoption for AR/VR applications. The ultra-low latency and high speeds that 5G can deliver put a break on many limitations faced by adopters and developers.
On the adopters’ side, the speeds achieved with 5G would allow for richer visual content with little lags and buffers. This ability is essential to tackle the lack of engaging content faced by early adopters. Use cases such as spatial computing and live-viewing of sophisticated content with the integration of 5G.
For developers, 5G can widen the possibilities for headset design, especially as a combination of both 5G and the cloud could replace the built-in processing storage on the headsets. An improvement like this could enable developers and manufacturers to design a lighter and more user-friendly headset for their consumers
2. Adoption of cloud technology
The adoption of cloud technology grew by more than 40% in 2020. In terms of AR/VR development, the adoption of cloud technology benefits enterprises by having a more scalable infrastructure to support AR/VR implementation.
For example, past adopters may rely on locally built data centres and machines to host AR/VR applications. Unfortunately, this infrastructure severely limits scalability, especially when global collaboration projects are in place.
To counter this, cloud-based platforms enable easy scalability, performance, and cost management. For example, enterprise users of AR/VR in manufacturing would be able to scale their solutions across regions. Leading cloud players AWS, Azure, and GCP also backed this up by providing specific AR/VR services on their platforms.
Top Enterprise AR/VR Applications 2021 – 2022
We are still years away from the widespread adoption of AR/VR in every enterprise. There are, however, a few specific use cases that can improve operational efficiency. These use cases are favourable as they address some unique industry and job function-specific challenges.
- Industrial training: There are several application areas where it is more costly to provide training in real or simulated environments. AR/VR helps address this challenge. Top applications include areas such as military, aerospace, oil and gas, and healthcare. The current limitations for conduction physical training have particularly accelerated these developments.
- Product development: This use case has been highly adopted by top manufacturers globally. Companies such as Volkswagen, Ford, and Audi use virtual prototyping as their main product development tool. Benefits include faster development time and cost savings from the absence of physical materials.
- Remote assistance & learning: Upskilling the workforce is one of the most considerable challenges businesses face today. With VR and AR, companies are finding new ways to provide rapid learning and guidance to bridge the skills gap that employees face.
How can you prepare for VR and AR adoption?
- The time is ripe for you to explore AR/VR technology as adoption grows more significant across verticals. You can start off by creating a long-term implementation plan for AR/VR while you create the internal expertise of the supporting technologies.
- The blur on how AR/VR technology can bring value to your business is clearing. Industry leaders with their proven use cases can act as a reliable reference point for AR/VR implementation.
- An incremental approach is ideal when considering AR/VR. We would highly recommend that you explore the innovative capabilities of 5G and cloud beforehand. With these capabilities, you can avoid the common problems early adopters face and extract the full value from AR/VR technology.
To learn more on AR/VR, we have covered the top business benefits of this technology in the following article. Click here to read more.
[ii]Khan, S. (2021, March 31). Oculus Quest 2 Shows Impressive Sales, Hints at Players Slowly Shifting to Virtual Reality. Tech Times. https://www.techtimes.com/articles/258622/20210331/oculus-quest-2-shows-impressive-sales-hints-players-slowly-shifting.htm
[iii] TechCrunch is now a part of Verizon Media. (2021, March 24). Techcrunch. https://techcrunch.com/2021/03/24/rec-room-raises-at-1-25b-valuation-from-sequoia-and-index-as-vcs-push-to-find-another-roblox/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAHCkx2e0yUQtwxzrLRPIl84BvU9xKAOZzXErZuNKWOIyvDsR5ha68Rc2fcwnmw8SB_MLIodpuQNxaSL37knr0Mmjss9mac021Rt2QmLr4nBBgHOWLO5GM1FoCYCMga1mpC84P48jI-CCghUa9zQ8m7kToXzBzyCgaT1upThChSyL
