Aggressive growth coming in augmented & virtual reality

Progress has been slow, in both gaming and professional uses, but there’s reason to think augmented and virtual reality are about to experience explosive growth

By Matt Hamblen

Augmented and virtual reality are catching on, even if it is still early days for both.

While some analysts at Strategy Analytics worry there aren’t enough engaging 360-degree VR movies and other content on the market, IDC analysts on Thursday said there are plenty of early business-focused rollouts of AR to justify optimism.

IDC pointed to medical, industrial and marketing applications already in use and predicted a bullish,10-fold spike for AR and VR headsets by 2021.

At this year’s Mobile World Congress, vendors demonstrated a variety of capabilities: There were VR roller coasters provided by Samsung and flying wingsuit rides from smaller vendors where users reclined face down on a rotating apparatus while wearing a headset. Other companies, including Verizon, showed off AR capabilities using a smartphone or other device pointed at popular fashion magazines to activate images that demonstrate clothing and makeup variations.

Though only 10 million AR or VR headsets shipped globally in 2016, that number will reach nearly 100 million in 2021, IDC said. The research firm expects that healthcare, architecture, design firms and VR arcades will comprise about 38% of the market by then, with the remaining 62% coming from headsets shipped for consumers.

“It’s an aggressive forecast,” IDC analyst Ramon Llamas said in an interview. “A number of vendors [of headsets] rattle off chapter and verse of how they are going to [grow]. We know the interest is out there.”

IDC analyst Jitesh Ubrani agreed: “We’re at the point where people are starting to get interested. IDC’s VR survey for the U.S. found a high number are interested.”

IDC’s projections are partly based on the “multiple dozens” of companies now selling consumer VR headsets in various countries, Ubrani said. In addition, several large global companies already offer headsets and gear, led by Samsung Gear VR, which has shipped 5 million units — about half the 2016 total. Samsung sells the Gear headset (which requires an additional Galaxy smartphone) for $100, but T-Mobile just put it on sale for half that price for its wireless customers.

At least 15 vendors worldwide offer AR headsets or glasses, led by Epson, IDC said. Epson makes three Moverio Smart Glasses models and a Moverio Smart Headset that range in price from $700 to $3,000.

Llamas cited many AR use cases emerging across multiple industries, as well as for games and movie content. “This sets the stage for the multiple aspects of the market that device makers, platforms and content providers and developers will be addressing in the months and years to come,” he said in a statement.

Llamas pointed to Embraer Commercial Aviation’s use of AR/VR goggles from Canon that can give business customers a view inside a business jet to help them decide the position and color of seats and furnishings. That process allows for faster production of custom planes.

In similar fashion, Case Western Reserve University has partnered with Cleveland Clinic using Microsoft HoloLens to teach human anatomy so students can get realistic views into the human body, Llamas said.

Ubrani said Epson has shown off AR Moverio glasses in Japanese baseball stadiums that allow fans to supplement a game with stats while they’re watching. The glasses can also let dentists pull up patient records while they’re peering into a person’s mouth.

IDC includes in its count of commercial VR and AR the numerous arcades in China’s cities where customers play online VR games. “A lot of VR gaming is taking place that way,” he said. Those headsets are purchased by the arcade or movie theater operators, and are counted as commercial sales, he explained.

Even with those kinds of early successes, VR still suffers from limited content. “There’s not a lot of VR content out there and what is out there is very targeted” to younger users and gamers, Ubrani said. Facebook, which purchased Oculus in 2014, allows users to create VR avatars to use in a virtual world, for example.

Strategy Analytics on Thursday said VR is “poised for tremendous growth over the next several years,” but tempered its optimism with a survey that indicates VR experiences are still wanting. “Current VR experiences lack the context required for real engagement with the medium,” the company said in a report.

Mathew Alton, an analyst at Strategy Analytics, said VR content can be made more compelling by adding sensory engagement for users to be able to “touch,” see and hear what’s happening in virtual spaces. Many early VR movies only allow a user to hear sounds and move in simple ways, if that. Adding social interactions with other VR users would help, the report said.

Despite such reservations, Strategy Analytics still believes the VR industry will pass $10 billion in revenues by 2022.

VR gear now on the market is sold at a wide range of prices, with the Google Daydream headset used with the Pixel smartphone starting at $80, while the HTC Vive with a headset, controller and other accessories can cost $800 to $1,000, depending on the configuration.

“There’s a huge disparity in price and performance right now,” Ubrani said. “We’re worried if someone goes out to try a really cheap headset that’s decent but not great and then gets turned off from scaling up with the next purchase. It’s still early days and that worry is more of a theory. It’s not like a smartphone where somebody might start with a low-quality device and move up.”

One turn-off: some users experience nausea or dizziness while wearing goggles, especially while tilting on a moving apparatus or chair or even while standing. Samsung showed off several different VR experiences for skiing or riding a roller coaster at Mobile World Congress as it has at other shows, and included warning signs for people with medical conditions and pregnant women.

Still, people lined up in droves to try out the experience.

“We know that vendors realize there’s a whole group, a small part of the population — maybe 1% or 10% — who could get sick with VR,” Ubrani said. “It’s going to take education by vendors and word of mouth for people to realize that someone could face challenges to their eyes or might get nauseous. The concern is they end up blaming the technology rather than realizing its their eyes. People already realize if they can get [motion sickness], it’s not a good idea to go on a roller coaster.”