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Augmented Reality Glasses - Market Overview - Automotive Perspective
- 1. – Augmented Reality Glasses – Automo3ve Perspec3ve Market Research Report Author: Hugo Nordell Date: August 11, 2013-‐
- 2. Execu3ve Summary Augmented Glasses Overview Market Overview § Augmented Reality (AR) blends computer-‐ generated sensory input with the real world § AR glasses have come into mainstream media focus over the past year following Google’s announcement of Project Glass § Two main technologies exist; (1) Head-‐ Mounted Displays (HMD) and (2) Virtual Re<nal Displays (VRD) § HMD is poised to drive market growth first § $5Bn+ addressable market size in 2016 based on aggregate research and key segments § 95% expected CAGR 2011 -‐ 2017 § 1% end-‐consumer penetra<on rate by 2017 § Sports & Fitness is the most a`rac<ve segment based on adop<on, barriers to entry and addressable market size § Key growth drivers are ease-‐of-‐use, design and price point Hardware & So?ware Integra<on Key Risks & Threats to Adop<on § The interac<on between so?ware (plaBorm) and hardware (glasses) providers will determine the prevailing technological standard § Automo<ve corporates are advised to place many small bets on several technologies, so?ware and hardware, and closely follow trends and user uptake § Compe<ng subs<tute technologies may provide a fragmented market and hinder rapid mass-‐market adop<on § More conspicuous and obtrusive than other wearable technology § Poten<al regulatory risks and security & integrity concerns could reinforce cultural barriers to mass-‐adop<on Source: Juniper Research (2010), ResearchAndMarkets (2011), BI Intelligence (2013) 1
- 3. Market – Trends & Developments Google Rela<ve Search Trends – January 2012 to August 2013 Wearable technology Smartwatch* Augment* real* glass* Google glass Highlights: § This shows normalized rela<ve number of searches compared to the total number of searches worldwide on Google § Google Glass clearly drives the search sta<s<cs, while “Augment* real* glass*” is negligible § Nonetheless, AR glasses are slowly coming into the spotlight of the mass-‐consumer markets Augmented Reality Total Market Size Compe<ng Technologies & Subs<tutes § Juniper Research es<mates that the AR mobile applica<on market will reach $1.5Bb in 2016 § Business Insider Intelligence aggressively es<mates Google glass sales to exceed $11Bn in 2018 § ResearchAndMarkets predicts overall AR market of $5.2Bn by 2017 § Mul<ple near-‐to-‐eye technologies are being developed with different levels of immersion and applica<on to glasses, and may broadly be categorized into (1) HMD and (2) VRD § Subs<tutes, such as HUD or audio enabled (e.g. Siri) have so far seen broader market adop<on Source: Juniper Research (2010), ResearchAndMarkets (2011), BI Intelligence (2013), Google Trends (2013) 2
- 4. Market – Key Customer Segments Fast Rate of Adop3on Marke3ng & Retail Traveling & Tourism High Barriers to Entry Low Sport & Fitness Slow Market size: $3Bn+* by 2018 Use cases: § Sports & Exercise progress tracking & professional sports Automo3ve & Manufacturing Market size: $500M+* by 2017 Use cases: § Visualize key dashboard items § Maintenance & repair assistance Market size: $1.5Bn by 2015 Use cases: § Personalized ‘offline’ marke<ng § Assist High St. sales personnel Market size: $100M+* by 2017 Use cases: § Direct environment interac<on with loca<ons and notable sights Educa3on Military & Security Firms Market size: $1Bn+* by 2016 Use cases: § Crowd control, Intel updates § Target iden<fica<on & objec<ves Market size: <$50M* by 2017 Use cases: § Interac<ve learning § Head-‐up notes for teachers Key takeaways: § This matrix breaks key customer segments into 6 main categories, ranked by qualita<vely and historical probable rate of adop<on and barriers to entry. Arrow direc<on indicates increasing a`rac<veness § An a`rac<ve customer segment is one with rela<vely low barriers to entry and a fast rate of adop<on. Example brands above are category leaders in their respec<ve fields and poten<ally strategic partners for driving end-‐consumer adop<on § Corporate segments are not directly split from ul<mate end-‐users, although Automo<ve & Manufacturing together with Military & Security segments are likely to have largest end-‐user exposure toward a corporate environment Source: Own matrix design, ResearchAndMarkets (2011), BI Intelligence (2013), NMC (2012), Juniper Research (2010) 3
- 5. Compe33on – Products Product Producer Key Features (as described by producer) § GlassUp S.R.L-‐CL § § § § § Receive only Incoming emails Text messages Tweets Facebook updates § Google, Inc § § § § Travel direc<ons Photo/Video Rec. Phone, tex<ng Translate foreign languages § Meta SpaceGlasses § Vuzix Corp. § Gesture recogni<on § Dual cameras § Full scale 3D augmented projec<ons § Na<ve, HMD & smarphone coopera<ve mode § Receive texts, video & email § Requires Android, iOS smartphone § Bluetooth § Bluetooth § Recommended: Android or iOS Smartphone § Windows PC § Unity 3D for app development § Runs on Android § Spa<al & Posi<onal awareness § Supports iOS Price (USD) § $399 § $1,500 (Developers) § $667 (Developers) § Rumoured $500 Launch date § Feb 2014 § Late ‘13 – Early ‘14 § Aug 2013 § Late 2013 Notes Key takeaways: § Key drivers for adop<on are ease-‐of-‐use, applica<on access, price and level of obtrusiveness § Google Glass and GlassUp are closest to final produc<on and market themselves more heavily toward end-‐consumers, than Meta and Vuzix do § The price range is wide, indica<ng that the producers aim to a certain extent for different customer segments and usage § No Augmented Reality glasses product has yet successfully penetrated the mass-‐consumer markets § Other poten<al Augmented Reality glasses producers to look for are Recon Instruments, Innovega and Lumus-‐Op<cal Source: Company websites, Showcase material, Huffington Post (2013), Business Insider (2013), TechCrunch (2013) 4
- 6. Compe33on – Value Chain Frame Design Electronics (Hardware) (Luxovca) (Luxovca) (Kering) Op3cs Key takeaways: § The above matrix illustrates the value chain as it is expected to evolve in the coming 3 to 5 year period § Frame design firms will play a key role in overcoming the obtrusive and conspicuous look of current AR glasses § PlaBorm providers will have to drive developer interest, and subsequent mass-‐adop<on will most likely follow from range and breadth of apps § Google, with its Project Glass, is expected to drive early adop<on and indicate rela<ve importance and balance between providing plaBorms and unobtrusive finished hardware PlaPorms & SDKs Omnipresent Corporates Expected to be heavily ver<cally integrated Source: Own assessment of potenOal value chain & based on recent investments by large corporates 5
- 7. Impact – Automo3ve Industry Broad Industry Implica<ons Leveraging for the In-‐Car Experience § Both Automo<ve manufacturers and industry suppliers stand to gain from connec<ng AR glasses with the current in-‐car experience, for both drivers and passengers § Main focus will likely lie with the driving experience as the market growth and scales – Easy to use support applica<ons – Proac<vely warn drivers of poten<al adverse driving condi<ons § Passengers will also be a poten<al source of revenues and immersion – In-‐car entertainment systems may also be experienced through AR glasses, providing 3-‐4 more people with addi<onal use cases § Manufacturers stand to possibly gain cost reduc<ons if AR glasses can provide drivers with essen<al func<ons currently supplied by the dashboard, including speedometer, travel routes, traffic informa<on and car vital signs § Suppliers may see a substan<al source of revenues being threatened from AR glasses suppor<ng vital driver func<onality and will have to diversify revenue streams into heavier so?ware & hardware integra<on to mi<gate this risk § AR glasses also stand to aid manufacturing facili<es by providing key informa<on to workers, minimizing human error and improving efficiency, much the same way the iPad is currently penetra<ng produc<on floors Source: MBX Systems (2011), Computerworld (2011), Key Considera<ons for Automo<ve Companies § Minimising AR glass obtrusiveness and enabling func<onal so?ware will stand to help mi<gate safety risks, regula<on and legisla<on concerns § Auto companies must take into considera<on the long-‐term implica<ons of choosing one technology over another, especially in terms of so?ware & hardware integra<on as the Augmented Reality market for in-‐car experiences is s<ll nascent 6
- 8. Conclusion AR Glasses Are Here to Stay § All market research indicates that the total Augmented Reality market is set to grow rapidly in coming years § $5Bn+ addressable market size in 2016 § 1% popula<on penetra<on rate by 2017 § AR glasses are poised to poten<ally fit well into a growing wearable technologies market if key players focus on ease-‐of-‐use, plaBorm integra<on and minimizing obtrusiveness Source: Google, Project Glass (2013) Corporates Will Drive Mass-‐Adop<on Moving Forward – What’s Next? § Large corporates, on both the so?ware and hardware side, will drive exposure toward end-‐users and ul<mately mass-‐adop<on § Google, Qualcomm, Apple & Microso? will push for building integrated plaBorm solu<ons with exis<ng so?ware ecosystems § Automo<ve companies are well-‐posi<oned to place many small bets and see how the offerings in the market play out § No device has yet successfully penetrated consumer markets, but many new glasses are set to be launched late 2013 – early 2014 § 2014 will be a decisive year for wearable technology § Mul<ple compe<ng plaBorms and technologies will drive use case applica<ons § Fragmenta<on could hinder mass-‐adop<on and create a wait-‐and-‐see scenario 7
- 9. References & Further Reading 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) Juniper Research. Mobile Augmented Reality A`racts Leading Brands as Juniper Research forecasts $1.5 billion revenue stream by 2015. February 2011. h`p://juniperresearch.com/viewpressrelease.php?pr=225 ResearchAndMarkets. Global Augmented Reality (AR) Market Forecast by Product (HMD, HUD, Tablet PC, Smartphone) for Gaming, AutomoOve, Medical, AdverOsement, Defense, E-‐learning & GPS applicaOons (2011 – 2016). December 2011. h`p://www.researchandmarkets.com/reports/1963197/global_augmented_reality_ar_market_forecast_by ResearchAndMarkets. Augmented Reality & Virtual Reality Market by Technology, Sensor & Components, ApplicaOons & Geography (2013 – 2018). July 2013.h`p://www.researchandmarkets.com/research/8xb9x6/augmented_reality ResearchAndMarkets. OpportuniOes for Augmented Reality: 2013 – 2022. February 2013. h`p://www.researchandmarkets.com/reports/2517391/opportuni<es_for_augmented_reality_20132022 Ashish Badyal. Augmented Reality and Business. January 2013. h`p://www.slideshare.net/ashua12/business-‐perspec<ve-‐augmented-‐reality BI Intelligence. Google Glass Will Be An $11Bn Market By 2018. May 2013. h`p://www.businessinsider.com/google-‐glass-‐11-‐billion-‐market-‐by-‐2018-‐2013-‐5 IMS Research. Wearable Technology Market to Exceed $6 Billion by 2016. August 2012. h`p://imsresearch.com/press-‐release/Wearable_Technology_Market_to_Exceed_6_Billion_by_2016 Mind Commerce. Augmented Reality in the Ba`lefield 2012 – 2016. July 2012 `p://www.mindcommerce.com/Publica<ons/AR_Ba`efield_2012-‐2016.php Gary Hayes. Augmented Reality: Widespread AdopOon and Barriers to Entry. July 2010. h`p://www.slideshare.net/hayesg31/augmented-‐reality-‐barriers-‐drivers-‐for-‐widespread-‐adop<on David Stein. Trend Assessment – Augmented Reality. April 2012. h`p://www.slideshare.net/MrDavidStein/trend-‐assessment-‐augmented-‐reality SIIA Report. U.S. EducaOon Technology Industry Market: PreK-‐12. 2011. h`p://www.siia.net/index.php?op<on=com_docman&task=doc_view&gid=3886&Itemid=318 IBIS World. Museums Market Research Report. July 2013.h`p://www.ibisworld.com/industry/default.aspx?indid=1640 Haydn Shaughnessy. Why Google Glass Will Not Be Another iPhone. June 2013. h`p://www.forbes.com/sites/haydnshaughnessy/2013/06/25/why-‐google-‐glass-‐will-‐not-‐be-‐another-‐iphone Ping Jintao. Vuzix Smart Glasses vs Google Glass. March 2013. h`p://www.smartglassesnews.org/vuzix-‐m100-‐smart-‐glasses-‐vs-‐google-‐glass/ Note: for some market size figures, both a prudence approach and actual es<ma<on analysis have been performed to scale back what I consider to be too aggressive es<mates from the referenced sources. These numbers are indicated with * in the slides