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Augmented reality to grow to $2 billion in apps by 2015

One of our partners, ArcChart in London (we publish Rethink-Wireless

By PETER WHITE

Published: 18 November, 2010

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One of our partners, ArcChart in London (we publish Rethink-Wireless.com with it) has just come out with a report on augmented reality on handsets and portable devices. It reckons that Apps will pull in $2 billion by 2015.

The report argues that augmented reality will impact almost every industry, particularly retail, entertainment, travel and advertising.

Augmented reality is the experience created when content from a virtual world is overlaid on top of a live video feed from the surrounding environment, usually captured by a phone camera. The technology takes in the handset's location and uses inertial sensors (GPS, compass, accelerometer) to determine which way the device is looking. The software then pulls down virtual content from a remote backend in conjunction with search, advertising and image recognition engines.

The report raises a few words of caution, and says that before full augmented reality can be achieved, several technical hurdles must still be overcome. “The availability of standardized visual content will be a significant hurdle in providing robust AR experiences" explains Peter Crocker, the report's analyst. “Computer vision, which involves object recognition and the accurate anchoring of content, must also be improved to support real time processing.”

While the value of the augmented reality application market is presently small, ARCchart expects it to grow quickly, becoming a multi-billion dollar market within the next four years. The report - Mobile Phone Augmented Reality: Market Analysis and Forecasts - examines the various AR revenue opportunities. Revenues generated from mobile phone augmented reality apps are forecast to reach $2.2 billion by 2015.

As the market matures, many categories of mobile applications will incorporate augmented reality features, particularly travel, retail and points of interest applications. Other applications will emerge which implement AR as a core function, such as augmented reality games.

The number of these devices capable of supporting an augmented reality experience will ramp significantly over the coming years, spurred on by the aggressive competition amongst smartphone OEMs which is forcing components such as gyroscopes and powerful CPUs to become increasingly standard features on these devices. By 2015, ARCchart expect a total installed base of over 1.6 billion AR-enabled phones will be present in the market.

Currently, the augmented reality market is dominated by small start-ups with talented developer teams who are driving innovation. As the market picks-up, ARCchart expects the established industry players to increase their involvement. We have identified five service areas - search, advertising, image recognition, mapping and 3-D world views - which are essential for a complete AR solution and where large players can exert a stronghold. Companies active in several of these areas, like Google, Microsoft and Nokia, who also control their own smartphone platform and developer tools, will be well-positioned to dominate the space.

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