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TECH GIANTS TACKLE AR
DEEP DIVE ON THE BIG 5
MIKE BOLAND
CHIEF ANALYST
ARTILLERY INTELLIGENCE
© ARtillery Intelligence, 2019
• ARtillery Intelligence Founder & Chief Analyst
• AR Insider Editor In Chief
• 15-year industry analyst covering mobile tech
• Past 3.5 years covering AR & VR
• SF Chapter President, VR/AR Association.
• Frequent contributor to TechCrunch, VentureBeat,
Forbes, Huffpo and other tier-1 publications.
• Quoted in A-list publications like the New York
Times, Wall Street Journal & the New Yorker.
About Me
More can be seen at
http://www.mikebo.land/
© ARtillery Intelligence, 2019
• FOUNDED 2016
• GROWING TEAM OF ANALYSTS AND
RESEARCHERS.
• BUILT ON PRINCIPLES OF BEST PRACTICES IN
MARKET ANALYSIS & RESEARCH.
• 15-YEAR TENURE IN INDUSTRY ANALYST WORK
• FOCUSED ON THOUGHT LEADERSHIP AND DEEP
STRATEGIC KNOWLEDGE OF THE BUSINESS OF
SPATIAL COMPUTING.
• KNOWLEDGE POSITION IS REINFORCED
THROUGH AR INSIDER (DAILY PUBLICATION).
• KNOWLEDGE POSITION MANIFESTS IN THE
ARTILLERY PRO INTELLIGENCE SUBSCRIPTION
ARtillery Intelligence
© ARtillery Intelligence, 2019
$671 $1,133 $1,787
$6,033
$15,332
$28,546
$462 $1,249 $3,300
$5,892
$9,413
$16,508
$332 $490
$809
$1,407
$2,074
$2,790
$2,371 $2,736
$3,468
$4,421
$6,245
$8,591
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E)
Enterprise AR Consumer AR Enterprise VR Consumer VR
U.S.$Millions
AR = Smart glasses, software (games, apps, etc.), advertising
VR = Headsets, software, advertising, LBVR admissions
$3,836
$5,608
$9,365
$17,753
$33,063
$56,435
(DETAILED VIEW)
U.S. $Millions 2020-2021: XR revenues
hit an inflection point.
Apple launches
consumer smart
glasses. Enterprise
dominates AR, but its
share will begin to
diminishes as consumer
AR glasses penetrate.
2018 – 2019: XR growth picks
up, led by enterprise AR and
consumer VR. Enterprise
adoption approaches a
tipping point in late 2019 due
to measurable ROI gains.
Consumers acclimate to VR,
driven by price competition
and standalone hardware like
Oculus Go and Quest.
2022: VR has a place
in the enterprise but
is a greater
consumer play.
Enterprise and
consumer AR widen
their lead in XR
revenue share.
Global XR Revenue Overview
2017: Consumer adoption
lags. VR leads in revenue
share but ARCore and
ARkit lay a foundation for
AR growth, given sizeable
installed hardware bases.
In-app purchases show
signs of being the
predominant mobile AR
pricing model, but still no
killer apps.
© ARtillery Intelligence, 2019
$671 $1,133 $1,787
$6,033
$15,332
$28,546
$462 $1,249 $3,300
$5,892
$9,413
$16,508
$332 $490
$809
$1,407
$2,074
$2,790
$2,371 $2,736
$3,468
$4,421
$6,245
$8,591
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E)
Enterprise AR Consumer AR Enterprise VR Consumer VR
U.S.$Millions
AR = Smart glasses, software (games, apps, etc.), advertising
VR = Headsets, software, advertising, LBVR admissions
$3,836
$5,608
$9,365
$17,753
$33,063
$56,435
(DETAILED VIEW)
U.S. $Millions 2020-2021: XR revenues
hit an inflection point.
Apple launches
consumer smart
glasses. Enterprise
dominates AR, but its
share will begin to
diminishes as consumer
AR glasses penetrate.
2018 – 2019: XR growth picks
up, led by enterprise AR and
consumer VR. Enterprise
adoption approaches a
tipping point in late 2019 due
to measurable ROI gains.
Consumers acclimate to VR,
driven by price competition
and standalone hardware like
Oculus Go and Quest.
2022: VR has a place
in the enterprise but
is a greater
consumer play.
Enterprise and
consumer AR widen
their lead in XR
revenue share.
2017: Consumer adoption
lags. VR leads in revenue
share but ARCore and
ARkit lay a foundation for
AR growth, given sizeable
installed hardware bases.
In-app purchases show
signs of being the
predominant mobile AR
pricing model, but still no
killer apps.
Global XR Revenue Overview
© ARtillery Intelligence, 2019
$225 $306 $414 $2,475
$6,035
$10,540
$280 $409 $612 $2,393
$7,593
$15,543
$69 $134 $224 $746
$1,790
$6,590
$392 $1,115 $3,076 $5,146
$7,623
$9,918
$167 $418 $761 $1,166
$1,704
$2,463
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E)
Enterprise AR Hardware Enterprise AR Software Consumer AR Hardware Consumer AR Software Advertising
U.S.$Millions
U.S. $Millions
(DETAILED VIEW)
$1,133
$2,382
$5,087
$11,925
$24,744
$45,054
AR Hardware, Software & Advertising Revenues
Excludes mobile network data & hardware revenue (smartphone shipments)
2017: Mobile AR
revenues dip as
Pokémon Go
engagement wanes.
ArKit and ARCore plant
the stake for mobile
AR’s future.
2018 - 2019: Mobile AR
revenues rebound
through app and in-app
purchases. Niantic’s
Harry Potter-themed
follow-up game will
drive app revenues, as
will its platform strategy
to enable third party AR
apps. In-app purchase
models and native AR
standards also develop
and drive revenue.
2020-2021: Apple
launches consumer
smart glasses, and
Magic Leap One enters
its third year.
Hardware revenues
begin to ramp in 2021.
Software remains the
dominant revenue
source, due to
continued mobile AR
Penetration.
2022: Enterprise AR
adoption accelerates,
while software pulls
ahead as a leading
revenue stream, built on
the installed base of
hardware adopted in
preceding years. Saas
models facilitate rapid
refresh cycles and
recurring revenue.
Global AR Revenue Overview
“The answer to all
of your questions
is Money”
-- Tony Kornheiser, ESPN
© ARtillery Intelligence, 2019
Follow the money
© ARtillery Intelligence, 2019
We Did Just That
Apple
Near Term
Two Jobs
Make
iPhone
Great
Again
Groom the
iPhone’s
Successor
Long Term
Two Jobs
The
iPhone
is Dead
Long
Live the
iPhone
Long, Long Term
Wearables Suite
Planting Seeds
Medium Term
Planting Seeds
Medium Term
Facebook
Near Term
Keep Us
in the
Walled
Garden
Monetize
Directly
Two Jobs
Faces & Spaces
Immersive Demos
© ARtillery Intelligence, 2019
It’s
already
working
Full-funnel Advertising
Reach + Response
Mike Boland (ARtillery Intelligence): Where will the Big Five Take Spatial Computing?
1 Billion Served
AR Sleeping Giant
Instagram
© ARtillery Intelligence, 2019
$10 $80 $284
$710
$167
$418
$752
$1,086
$1,419
$1,753
0
500
1,000
1,500
2,000
2,500
3,000
2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E)
Visual-Search Ad Revenue AR Display Ad Revenue
$Millions
$US Millions
GLOBAL AR ADVERTISING BY FORMAT
Global AR ad revenues: search versus display
$167
$418
$761
$1,166
$1,704
$2,463
(DETAILED VIEW)
Spatial
Web
“Identity
Layer”
Advancing
VR
Long Term
Google “Think of the things that
are core to Google, like
search and maps. These
are core things we are
monetizing today and
see added ways that we
can use [AR]. All the
ways we monetize today
will be ways we think
about monetizing AR.”
-- Aaron Luber. Google
XR Partnership Lead
The Internet of
Places
A search index
for the physical
world
Visual Search
“The camera is not
just answering
questions, but
putting the
answers right
where the
questions are,”
-- Aparna Chennapragada, VP of
Product, VR & AR, Google
Mike Boland (ARtillery Intelligence): Where will the Big Five Take Spatial Computing?
Mike Boland (ARtillery Intelligence): Where will the Big Five Take Spatial Computing?
V
P
S
Isual
ositioning
service
“GPS can get you
to the door, and
then VPS can get
you to the exact
item, you’re
looking for.”
--Clay Bavor, Google Product Lead, VR/AR
Google’s Last Mile
© ARtillery Intelligence, 2019
$3.70
$1.70
$0.97
$0.30
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
U.S.Trillions
U.S. $ Trillions
U.S. CONSUMER SPENDING
AR’S ADDRESSABLE MARKET WILL MAP TO WHERE THE MONEY IS BEING SPENT
Source: Deloitte Digital
Total Retail Sales
Digitally-
Influenced
Offline Sales
Mobile-Influenced
Offline Sales
eCommerce
© ARtillery Intelligence, 2019
$3.70
$1.70
$0.97
$0.30
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
U.S.Trillions
U.S. $ Trillions
U.S. CONSUMER SPENDING
AR’S ADDRESSABLE MARKET WILL MAP TO WHERE THE MONEY IS BEING SPENT
Source: Deloitte Digital
Total Retail Sales
Digitally-
Influenced
Offline Sales
Mobile-Influenced
Offline Sales
eCommerce
© ARtillery Intelligence, 2019
2% 15%
24% 24% 25%
37%
82%
Other Utilities (AR tape
measure)
Educational
(Monster Park,
Night Sky)
Visual Search
(using smartphone
camera to identify
items)
Furniture or car
visualization (Ikea
Place, BMW
iVisualizer)
Social (Snapchat
selfie masks)
Games (Pokemon
go, NBA AR)
Mobile AR CategoriesWhat types of mobile AR experiences have you used?
Base = 3,118 US online adults (18+).
Mundane
utilities will win
Amazon
Does it Fit?
<3% Return Rates
The Commerce
Layer
Next: Visual
Search
Amazon Sumerian
Driving AWS
Microsoft
The Comeback
Kid
Enterprise AR
Cloud
Owning the Stack
© ARtillery Intelligence, 2019
Native AR Giants?
?
© ARtillery Intelligence, 2019
Further Reading
© ARtillery Intelligence, 2019
Thank You
Here’s a gift...
Use Code AWEtillery for 20% off
ARtillery PRO subscription
https://artillry.co/pro

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Mike Boland (ARtillery Intelligence): Where will the Big Five Take Spatial Computing?

  • 1. TECH GIANTS TACKLE AR DEEP DIVE ON THE BIG 5 MIKE BOLAND CHIEF ANALYST ARTILLERY INTELLIGENCE
  • 2. © ARtillery Intelligence, 2019 • ARtillery Intelligence Founder & Chief Analyst • AR Insider Editor In Chief • 15-year industry analyst covering mobile tech • Past 3.5 years covering AR & VR • SF Chapter President, VR/AR Association. • Frequent contributor to TechCrunch, VentureBeat, Forbes, Huffpo and other tier-1 publications. • Quoted in A-list publications like the New York Times, Wall Street Journal & the New Yorker. About Me More can be seen at http://www.mikebo.land/
  • 3. © ARtillery Intelligence, 2019 • FOUNDED 2016 • GROWING TEAM OF ANALYSTS AND RESEARCHERS. • BUILT ON PRINCIPLES OF BEST PRACTICES IN MARKET ANALYSIS & RESEARCH. • 15-YEAR TENURE IN INDUSTRY ANALYST WORK • FOCUSED ON THOUGHT LEADERSHIP AND DEEP STRATEGIC KNOWLEDGE OF THE BUSINESS OF SPATIAL COMPUTING. • KNOWLEDGE POSITION IS REINFORCED THROUGH AR INSIDER (DAILY PUBLICATION). • KNOWLEDGE POSITION MANIFESTS IN THE ARTILLERY PRO INTELLIGENCE SUBSCRIPTION ARtillery Intelligence
  • 4. © ARtillery Intelligence, 2019 $671 $1,133 $1,787 $6,033 $15,332 $28,546 $462 $1,249 $3,300 $5,892 $9,413 $16,508 $332 $490 $809 $1,407 $2,074 $2,790 $2,371 $2,736 $3,468 $4,421 $6,245 $8,591 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E) Enterprise AR Consumer AR Enterprise VR Consumer VR U.S.$Millions AR = Smart glasses, software (games, apps, etc.), advertising VR = Headsets, software, advertising, LBVR admissions $3,836 $5,608 $9,365 $17,753 $33,063 $56,435 (DETAILED VIEW) U.S. $Millions 2020-2021: XR revenues hit an inflection point. Apple launches consumer smart glasses. Enterprise dominates AR, but its share will begin to diminishes as consumer AR glasses penetrate. 2018 – 2019: XR growth picks up, led by enterprise AR and consumer VR. Enterprise adoption approaches a tipping point in late 2019 due to measurable ROI gains. Consumers acclimate to VR, driven by price competition and standalone hardware like Oculus Go and Quest. 2022: VR has a place in the enterprise but is a greater consumer play. Enterprise and consumer AR widen their lead in XR revenue share. Global XR Revenue Overview 2017: Consumer adoption lags. VR leads in revenue share but ARCore and ARkit lay a foundation for AR growth, given sizeable installed hardware bases. In-app purchases show signs of being the predominant mobile AR pricing model, but still no killer apps.
  • 5. © ARtillery Intelligence, 2019 $671 $1,133 $1,787 $6,033 $15,332 $28,546 $462 $1,249 $3,300 $5,892 $9,413 $16,508 $332 $490 $809 $1,407 $2,074 $2,790 $2,371 $2,736 $3,468 $4,421 $6,245 $8,591 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E) Enterprise AR Consumer AR Enterprise VR Consumer VR U.S.$Millions AR = Smart glasses, software (games, apps, etc.), advertising VR = Headsets, software, advertising, LBVR admissions $3,836 $5,608 $9,365 $17,753 $33,063 $56,435 (DETAILED VIEW) U.S. $Millions 2020-2021: XR revenues hit an inflection point. Apple launches consumer smart glasses. Enterprise dominates AR, but its share will begin to diminishes as consumer AR glasses penetrate. 2018 – 2019: XR growth picks up, led by enterprise AR and consumer VR. Enterprise adoption approaches a tipping point in late 2019 due to measurable ROI gains. Consumers acclimate to VR, driven by price competition and standalone hardware like Oculus Go and Quest. 2022: VR has a place in the enterprise but is a greater consumer play. Enterprise and consumer AR widen their lead in XR revenue share. 2017: Consumer adoption lags. VR leads in revenue share but ARCore and ARkit lay a foundation for AR growth, given sizeable installed hardware bases. In-app purchases show signs of being the predominant mobile AR pricing model, but still no killer apps. Global XR Revenue Overview
  • 6. © ARtillery Intelligence, 2019 $225 $306 $414 $2,475 $6,035 $10,540 $280 $409 $612 $2,393 $7,593 $15,543 $69 $134 $224 $746 $1,790 $6,590 $392 $1,115 $3,076 $5,146 $7,623 $9,918 $167 $418 $761 $1,166 $1,704 $2,463 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E) Enterprise AR Hardware Enterprise AR Software Consumer AR Hardware Consumer AR Software Advertising U.S.$Millions U.S. $Millions (DETAILED VIEW) $1,133 $2,382 $5,087 $11,925 $24,744 $45,054 AR Hardware, Software & Advertising Revenues Excludes mobile network data & hardware revenue (smartphone shipments) 2017: Mobile AR revenues dip as Pokémon Go engagement wanes. ArKit and ARCore plant the stake for mobile AR’s future. 2018 - 2019: Mobile AR revenues rebound through app and in-app purchases. Niantic’s Harry Potter-themed follow-up game will drive app revenues, as will its platform strategy to enable third party AR apps. In-app purchase models and native AR standards also develop and drive revenue. 2020-2021: Apple launches consumer smart glasses, and Magic Leap One enters its third year. Hardware revenues begin to ramp in 2021. Software remains the dominant revenue source, due to continued mobile AR Penetration. 2022: Enterprise AR adoption accelerates, while software pulls ahead as a leading revenue stream, built on the installed base of hardware adopted in preceding years. Saas models facilitate rapid refresh cycles and recurring revenue. Global AR Revenue Overview
  • 7. “The answer to all of your questions is Money” -- Tony Kornheiser, ESPN
  • 8. © ARtillery Intelligence, 2019 Follow the money
  • 9. © ARtillery Intelligence, 2019 We Did Just That
  • 10. Apple
  • 22. © ARtillery Intelligence, 2019 It’s already working
  • 27. © ARtillery Intelligence, 2019 $10 $80 $284 $710 $167 $418 $752 $1,086 $1,419 $1,753 0 500 1,000 1,500 2,000 2,500 3,000 2017 2018 (E) 2019 (E) 2020 (E) 2021 (E) 2022 (E) Visual-Search Ad Revenue AR Display Ad Revenue $Millions $US Millions GLOBAL AR ADVERTISING BY FORMAT Global AR ad revenues: search versus display $167 $418 $761 $1,166 $1,704 $2,463 (DETAILED VIEW)
  • 29. Google “Think of the things that are core to Google, like search and maps. These are core things we are monetizing today and see added ways that we can use [AR]. All the ways we monetize today will be ways we think about monetizing AR.” -- Aaron Luber. Google XR Partnership Lead
  • 30. The Internet of Places A search index for the physical world
  • 31. Visual Search “The camera is not just answering questions, but putting the answers right where the questions are,” -- Aparna Chennapragada, VP of Product, VR & AR, Google
  • 35. “GPS can get you to the door, and then VPS can get you to the exact item, you’re looking for.” --Clay Bavor, Google Product Lead, VR/AR Google’s Last Mile
  • 36. © ARtillery Intelligence, 2019 $3.70 $1.70 $0.97 $0.30 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 U.S.Trillions U.S. $ Trillions U.S. CONSUMER SPENDING AR’S ADDRESSABLE MARKET WILL MAP TO WHERE THE MONEY IS BEING SPENT Source: Deloitte Digital Total Retail Sales Digitally- Influenced Offline Sales Mobile-Influenced Offline Sales eCommerce
  • 37. © ARtillery Intelligence, 2019 $3.70 $1.70 $0.97 $0.30 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 U.S.Trillions U.S. $ Trillions U.S. CONSUMER SPENDING AR’S ADDRESSABLE MARKET WILL MAP TO WHERE THE MONEY IS BEING SPENT Source: Deloitte Digital Total Retail Sales Digitally- Influenced Offline Sales Mobile-Influenced Offline Sales eCommerce
  • 38. © ARtillery Intelligence, 2019 2% 15% 24% 24% 25% 37% 82% Other Utilities (AR tape measure) Educational (Monster Park, Night Sky) Visual Search (using smartphone camera to identify items) Furniture or car visualization (Ikea Place, BMW iVisualizer) Social (Snapchat selfie masks) Games (Pokemon go, NBA AR) Mobile AR CategoriesWhat types of mobile AR experiences have you used? Base = 3,118 US online adults (18+).
  • 41. Does it Fit? <3% Return Rates
  • 47. © ARtillery Intelligence, 2019 Native AR Giants? ?
  • 48. © ARtillery Intelligence, 2019 Further Reading
  • 49. © ARtillery Intelligence, 2019 Thank You Here’s a gift... Use Code AWEtillery for 20% off ARtillery PRO subscription https://artillry.co/pro