Merging the Physical and Digital Worlds, Augmented Reality bridges the Virtual & Physical Gaps
Posted on November 16, 2018

Heads-up displays with early forms of artificial intelligence (AI) have made organizations to experiment with tools that knock into the possibilities of augmented reality (AR). AR has the potential to take consumer interactions to the next level.

While augmented reality remains in the experimentation phase for most companies, research shows that the market is expected to grow as quickly as smartphones and tablets. Market Watch estimates that the AR market will increase from USD 2.6 billion in 2016 to USD 80.8 billion by 2022.

Another research by Lumus Vision compartmentalizes the growth of AR among different industries. The potential revenue of AR video games is projected to reach USD 11.6 billion whereas the revenue of healthcare industry is expected to extend up to USD 5.1 billion by 2025. The education industry is estimated to add USD 7 million through revenues by 2025.

Other sectors that are notably impacted are namely: engineering touching USD 4.7 billion, real estate coming up to USD 2.6 billion, retail reaching USD 1.6 billion and military projecting USD 1.4 million in revenues by 2025.


Augmented reality will influence health care in many ways – from how medical students learn about the human body, to consults with doctors in remote places via conference chat, to less-invasive surgeries. 24% of the technology insiders expect to see the most AR/VR technology advancements in healthcare or medical devices.


One of the key challenges for designers and architects is finding a way to experience the physical spaces, structures, and objects designed. In 2016, 51% of consumers have put off home improvements because they couldn’t imagine what the finished product would look like. AR will allow designers to visualize 3-D content while it is designed in 2-D and, just as important, display their work to clients in a comprehensive way.


Improving efficiencies and safety for workers is a key requirement for running warehouses. An AR application can lead a warehouse worker safely and quickly to the exact location of an item and remove it for shipping. GE has experienced productivity gains across seven of its business units by employing AR-based technology. Warehouse order fulfilment tasks were completed 46% faster since workers did not have to refer to a workstation.


With AR, the company could equip technicians in each plant with AR technology – allowing remotely located mechanical engineers to view and interact with the machinery from wherever they happen to be. AR headsets can also serve up blueprints, instructions, and real-time data – freeing workers to perform tasks hands-free.


Industrial AR applications can increase agility and drive competitive differentiation. A recent example is Boeing, which uses AR glasses to guide technicians as they wire hundreds of planes each year. As a result, the corporation condensed production time by 25% and reduced error rates to almost zero.


As per CB Insights, AR has seen disclosed funding totalling more than USD 2.3 billion in 2017, with 21% year-over-year deal growth over 2016, with funding of approximately USD 2 billion. While yearly totals ballooned at an annual scale, investment volume has been dwindling in recent quarters; Q2 2018 represented a 28% decline.

US Start-up Magic Leap has an undeniable impact on the funding, raising more than USD 400 million since its Series B funding. Another noteworthy investment was game engine Improbable raising over USD 500 million from SoftBank and prior backers.


Facebook, Apple, Microsoft, Google and Amazon, abbreviated as FAGMA, are following the trend of patenting tech related to AR – Facebook (Oculus), Apple (Metaio, PrimeSense, Polar Sense, SMI), Microsoft (Altspace, ODG), Google (Lytro, Eyefluence, Thrive Audio) and Amazon (Twitch).

Despite rocketing with its awareness in the world, AR is slow to fully take off. Challenges like 3D design interface and smartphone competition are the factors that act as barriers from AR gaining traction quickly. 3D interface design is difficult and expensive, and there are few people with the necessary design skills to overcome these issues. Despite user-experience limitations, smartphone convenience and developer familiarity mean that smartphone AR will establish an early strong foothold in the market. But a hands-free AR HMD experience will make the experience much more comfortable, and Gartner predicts that AR HMDs will come to market in significant volumes only after 2020

In conclusion, the presence of several tech giants such as Google, Apple, and Microsoft in the industry will boost AR growth within several geographies. This begins with North America, trailed by the European market, due to growth in the automotive and aerospace sectors. Followed by the Asia Pacific region as a result of the growing industrial and manufacturing sectors, particularly in China and Japan.

With the populace of smartphones growing, augmented reality is undeniably here to stay. More and more consumers are carrying phones with AR application capabilities. For as long as augmented reality content remains engaging, and innovative while incorporating superior user experience, consumers will move towards AR friendly applications.

Vanshita Agrawal, Research Analyst at A2Z Insights

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