The Benefits of AR for Businesses
AR technology can revolutionize the way we work and live. It enriches the traditional work environment and optimizes business processes while providing significant benefits in terms of safety, efficiency, and productivity.
By allowing virtual objects and real-time information into the physical world, AR can dramatically expand the user’s access to information and performance. In production-driven industries like manufacturing, augmented reality allows us to display every feature of a machine, product, or component, visualize and streamline complex concepts and processes, and provide valuable insight into the operations. Employees can access and apply detailed instructions while they work and make better informed decisions which helps mitigate downtime and reduce errors. This in turn results in overall optimization of processes across the value chain enhancing time and costs efficiencies.
AR helps reduce work-related hazards and improve workplace safety, this is particularly important in the case of industrial organizations that have complex heavy machinery which might be unsafe to operate, or in remote or hard-to-reach locations, where carrying out operations may be time-consuming or dangerous. AR offers the opportunity to identify potential risks in real time or operate remotely.
AR has been shown to be enormously effective in improving the learning curve for the employees. Immersive training is tailored to a particular worker and is more engaging with traditional learning methods leading to increased knowledge retention while reducing training time. European organizations recognize its potential and increasingly allocate a substantial portion of AR-related budget to virtual training. Investments in AR training will grow at a 46.7% CAGR by 2027.
Companies across Europe have long been struggling to find a qualified workforce. The pandemic accelerated digital transformation in organizations which would boost technical progress but would reveal how deepening skills gap creates bottleneck in the transformation.
According to IDC’s Future Enterprise and Resiliency Survey, organizations are seeing delays in digital transformation of more than eight months due to the lack of skills. In the current setting of ageing population and low supply of the talent from universities and professional courses which potentially undermine the technological progress, AR offers a great opportunity for businesses to increase their upskilling and reskilling initiatives from within.
Moreover, augmented reality contributes significantly to enterprises’ efforts towards sustainability. Remote maintenance helps minimize CO2 emissions from travel, contributing to the realization of a low-carbon society and addressing climate change. AR technology allows remote working, helping eliminate inequalities between urban and rural regions, and contribute to the creation of sustainable cities and communities.
Furthermore, remote tools allow employees to achieve higher productivity, contributing to more sustainable economic growth.
Not All Headsets Are Created Equal
Head-mounted displays (HMDs) come in various forms, but all we can divide them between tethered and standalone. Standalone devices are those whose processing is done within the device, usually capable of 3D mapping.
Some examples of standalone devices are Microsoft’s HoloLens 2 and Magic Leap 2. Tethered devices, however, are usually less capable and less expensive. Processing for these devices is done on an external device and most serve simply as an external virtual screen without being capable, by themselves, of 3D mapping. Brands focused in this category include XReal and Rokid.
The AR Market Landscape
The Augmented Reality market has historically been very focused on the commercial segment, with this segment taking approximately 70% of the market, but this is due to change. The dawn of less expensive devices that mainly function as portable screens, as well as new use cases, are bringing this technology to the masses.
If this trend continues, AR HMDs shipments are set to be 45% to consumers by 2027.
Whilst the more consumer focused VR market is still dominated by a couple of brands (with Meta’s share reaching 60-70%), the AR market is much more fragmented, counting 5 dominant brands. Magic Leap, a high end commercial-industrial focused brand, with devices selling for north of $3.000, is the dominant single brand responsible for about 30% of the AR market. Consumer focused brands that offer “portable screen solutions”, such as Xreal and Rokid take a combined 39% share in 3Q23.