Augmented Expectations? A hype check, post-CES

It’s a chilly morning in Las Vegas, Nevada. The date is January 10th last year, the morning after CES 2016. As pundits reflect on the conference, in taxis heading to flights out of McCarran International, one thing is crystal clear: everyone thought that 2016 would be a big year for virtual and augmented reality. Oculus Rift was the talk of the town and promising to hit the shelves in mere months. And thank goodness – Facebook CEO Mark Zuckerberg stated in 2014 that Oculus Rift had to sell 50-100 million units to be a “meaningful” computing platform. So a lot of hype, no surprise there – but has it been justified?

What happened in 2016?

Fast-forward to CES 2017, a year later, and the list of exhibitors suggested the industry is growing fast: 77 VR and 24 AR exhibitors, nearly twice as many as in 2016. But the success of VR and AR over the past year depends largely on who you ask. A few highly anticipated headsets thrilled consumers and developers in 2016. Oculus Rift and the HoloLens developer kit hit the market in March, shortly followed by Vive in April. In the summer, Niantic’s blockbuster AR app Pokémon Go was the first real hit with consumers, exceeding 100 million downloads in only 33 days.

A major sticking point for VR/AR aficionados, though, was the lack of progress on user experience. The list of issues is now becoming familiar: expensive, clunky, at times nausea-inducing, limited in range (i.e. ‘boxed-in’ rather than immersive) and lacking content. Add to that a requirement for top-spec computing power and it’s no wonder the big players are keeping sales figures so quiet.

VR/AR kit at CES 2017

The VR and AR marketplaces at CES 2017 were alive and well this January, showcasing a load of new tech. You can now get VR-ed up all the way from your head right down to your toes with Design Group’s new R-8 and R-9 smartglasses (basically high-end VR/AR tablets on your head) and Cerevo’s Taclim VR shoes, which let headset wearers feel virtual surfaces.

Other hot exhibits included Homido’s Orbit 364k camera, which turns any smartphone into a VR headset, and an AR motorcycle helmet, N-Com ARX, developed by Sony and NolanGroup. With Visionary VR’s expansive gaming platform, Mindshow, and Intel’s innovative new ‘merged reality’ concept, CES 2017 showed how much investment continues to pour into VR and AR technologies. But the real question is: who will win in developing tangible consumer or enterprise use cases?

What’s next? Searching for real use cases

Education is often seen as one of the most fertile areas, in particular for AR. Edtech company Sea Monster broke app store records in South Africa in 2016 with its AR app, Super Animals, which involves scanning animal pictures that come alive in 3D alongside fun facts. At CES, the co-founder of Sharecare Reality Lab, famous TV star Dr Oz, promoted his Edtech product You VR, telling the crowds, “While VR currently is used only in niche areas of healthcare, it offers ground-breaking opportunities for people to more actively engage in and understand their own health”.

Many commentators also point to enterprise AR use cases in any industry where headgear is worn already – such as construction and dentistry. And we also believe that tried and tested applications of AR in interior design and shopping will continue to grow and develop.

But perhaps the most interesting test will be the ability of VR/AR to provide a key competitive advantage for the next wave of smartphones and wearables. With the Asus ZenFone AR hitting stores in 2017, incorporating Google Tango-based VR/AR capabilities, we might start seeing some answers soon…

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If you’d like to find out more about the VR and AR market, or discuss how the technologies impact your business, please don’t hesitate to get in touch.

  • Virtual Reality (VR) creates a digital environment that replaces the user’s real-world environment
  • Augmented Reality (AR) overlays digitally-created content into the user’s real-world environment

About Adam Fraser

Adam is an Analyst at MTM, with experience in the TMT and entertainment industries. His recent projects include supporting a major government entity with digital capability assessments, and measuring the development of online video ad sales in the UK market. Prior to joining MTM, Adam worked at consultancy Cartesian.