While bandwidth challenges and the high cost and low comfort of VR headsets are limiting the spread of virtual reality, technology CEOs see tremendous potential for other kinds of immersive media experiences.
Earlier this year Apple Inc. (Nasdaq: AAPL) launched ARKit, a framework for developers to build augmented reality (AR) experiences for the iPhone. ARKit is similar to the Google (Nasdaq: GOOG) ARCore and the Facebook Camera Effects platforms. Speaking on Apple's earnings call, Apple CEO Tim Cook said that more than 1,000 apps had already been developed for ARKit. These allow users to interact with virtual models of a variety of items, from the human body to the solar system, and will make education and training far more effective. In his opinion they will "transform the way you work, play, connect and learn."
He talked about how shoppers could place an object in their living room before purchasing it, or see stats on the field while attending a sporting event, and how that could "change everything." He stressed Apple's goal at the moment is to focus on the customer experience rather than monetization, but if they got it right the revenues would follow naturally.
But the revenues are doing all right too. Apple's revenues for the quarter were $52.6 billion, up 12% over the same quarter last year, and a fourth quarter record for the company. Net income rose 19% over last year to $10.7 billion.
Microsoft Corp. (Nasdaq: MSFT)'s UK CEO, Cindy Rose, is similarly championing AR, particularly as it pertains to the use of Microsoft's HoloLens glasses. But for her it's more about productive video usage, in sectors such as auto manufacturing. Speaking at the recent Future Decoded event, she said the "fourth industrial revolution" is underway, and will be built on the "bedrock" of mixed reality, cloud services, artificial intelligence and quantum computing.
The HoloLens is available in ten countries, and is being rolled out to another 29 European countries in coming months.
Microsoft is also optimistic about the future of VR, with Windows-powered headsets aimed at immersive gaming and other entertainment experiences. But Apple is much more bullish about AR, with Cook saying VR isolates users while AR engages them, because it mixes graphics and real-world views instead of just immersing users in a computer-generated world.
He also sees more uses for AR in multiple sectors.
"I'm incredibly excited by AR because I can see uses for it everywhere," he said, speaking at Oxford University last month. "I can see uses for it in education, in consumers, in entertainment, in sports. I can see it in every business that I know anything about."
This puts researcher Digi-Capital more in the Apple camp than the Microsoft one. According to recent analysis from the company, AR on mobile devices will have almost twice the installed base by the end of 2017 than the entire AR/VR headset market by 2021. It specifically states that the Apple ARKit, Google ARCore and Facebook Camera Effects platforms will be the primary drivers and will have an installed base of 900 million users by the end of 2018.
Even smart glasses like the Microsoft HoloLens will only take hold ten years from now, while mobile AR users will grow to more than 3 billion by 2021 -- 30 times the number of users of smartglasses, headsets and mobile VR. (See Mobile AR to Rocket Past Other Immersive Formats.)
Slower VR adoption is a positive for network operators who don't have to worry about its bandwidth impact: potentially multiple Gbit/s for really high-quality immersive experiences. But it also leaves them left out of a nascent value-chain for services that will be delivered over their networks, yet again.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation