Mobile AR Could Top $60B by 2021

Gas up the hype machine, AR is hot.

Hot on the heels of Apple announcing that native Augmented Reality is coming to, oh, half a billion or so iPhone users this Fall, people are throwing big numbers around in discussing AR’s potential to change the world (or get rich trying). To wit, VentureBeat, citing Digi-Captial’s Q1 2017 Mobile Augmented Reality report:

Apple’s announcement of its ARkit for iOS this week as “the largest AR platform in the world” took the mobile AR war to the next level. They’re fighting over a market that could hit over a billion users and $60 billion revenue globally by 2021.

VB’s take is well worth reading, as it both explores and refutes the meaningful differences between “AR Hardware” and “AR Software.” The takeaway is that when it comes to forecasting augmented reality’s prospects, focusing on any sort of hardware vs software split is in many ways missing the point.  The point is that between advances in “mobile AR hardware” (phones, mainly) and “mobile AR Software” (Facebook, Apple iOS, and Snap, mainly, in the U.S.; Tencent’s WeChat in China) AR is coming to a ton of pockets, and soon:

Mobile AR hardware from Apple, Samsung, Huawei and others could deliver an installed base over 400 million users by 2021, Facebook, Tencent, Apple, Snap and others could drive a mobile AR software user base in the hundreds of millions next year, and billions by 2021. Mobile AR software platforms could deliver over 4 times the number of users of dedicated mobile AR hardware.

And whether you’re focused on the software delivering AR experiences, the hardware that software runs on, or both, you’re looking at the same thing. That thing is a phone:

Mobile AR could become the dominant AR/VR market for the foreseeable future, as it solves the 5 major consumer challenges for AR (hero device, all-day battery life, mobile connectivity, app ecosystem, telco cross-subsidization). Together with backing from major global consumer platforms like Facebook, the inflection point for AR/VR might now be within sight.

It’s worth pointing out to you, the reader, that while I’ve been obsessed with mobile phones for nearly two decades now, covering AR (and VR) is a relatively new journey for me. So take this with a very big grain of salt as I learn more about the business side of the Reality Business, but I’m fixated on how Apple and Facebook will coexist in these new realities. Facebook’s Camera and AR Studio can thrive alongside Apple’s ARKit. But they could also compete fiercely with one another.