For AR/VR 2.0 to live, AR/VR 1.0 must die
So what’s needed to go from AR/VR 1.0 to 2.0?
A lot of things might need to change to take us from AR/VR 1.0 to 2.0:
High friction to low friction: A large part of AR/VR 1.0 remains high friction in terms of installation, UX and UI. In many ways the market today looks like the MP3 player market before Steve Jobs launched the iPod (keep that analogy in mind). AR/VR 2.0’s lower friction is in the works, but what’s needed here are Apple smartglasses (whether they call them iGlasses or something else), the second generation of premium standalone VR (that comes after Oculus Quest and HTC Vive Focus) and mobile AR developers innovating beyond the lessons learned from Niantic, Houzz and others.
Experiences to use cases: There have been many “experiences” during AR/VR 1.0, with visually stunning apps not delivering meaningful UX. An AR/VR dragon or portal is impressive the first time you see it, but gets old pretty quickly. The next stage of AR/VR must deliver against critical use cases, with features in critical apps that we use all day, every day.
Standalone to features: The industry has largely focused on standalone apps to date, but major features in apps we use every day could see higher usage and prove more commercially successful. Navigation (Google Maps), e-commerce (Amazon, Walmart, Alibaba) and messaging (Facebook Spark AR, Snapchat Lens Studio) are beginning to show how this might happen.
Expensive to good value: Early AR/VR has ranged from $3,000 HoloLens to $200 Oculus Go to free mobile AR. But competing platforms often deliver more for less outside of specific use cases, particularly where we already own them, as with mobile. AR/VR 2.0 needs to become a great value because of what it delivers to users regardless of price point.
Point solutions to ecosystem: Many early AR/VR apps have been entertainment (games, video) or standalone point solutions to specific problems. As we’ve discussed before, AR/VR needs its own reality ecosystem to scale.
Low ROI to high ROI: For consumers, this means apps that give back more than just a “wow,” and for enterprises, applications that deliver real return on investment. This is beginning to happen in enterprise with companies like Lockheed Martin and Bell.
Pilots to production: Enterprise AR/VR 1.0 has seen many pilot projects, but relatively few full production rollouts. This is beginning to change, with companies like Walmart (with STRIVR) beginning to move into full production.
Inside baseball to brands: The AR/VR industry is still debating the merits of using AR, VR, MR, XR or spatial computing to describe itself, as well as spending a lot of time focused on internal plumbing across the stack. But consumers and enterprises outside of early adopters don’t care. They buy brands that deliver against critical use cases rather than just tech, which requires a clearer focus on users and how to market to them to succeed.
Fragmentation to dominance: AR/VR 1.0 remains fragmented across both hardware and software, despite its early stage and relatively small user bases. The industry now appears to have made up its mind on which platforms matter, so natural selection could thin the herd to a few dominant players in each part of the market.
Blue Sky to data driven: Many AR/VR 1.0 companies have been coy about their numbers, with independent data sources hard to come by in the early market. Developments like Digi-Capital’s AR/VR Analytics Platform have made it difficult to hide, with hard data/analytics now available to answer granular questions about roadmaps, country rollouts, investments, valuations and more.
VC-funded to cockroach/money making: Well-funded pioneers began to exit the market last year, with 2019 potentially seeing a major shakeout of companies that aren’t at least breaking even. The U.S. AR/VR investment market began to reverse its decline in Q4 2018 (even as Chinese investment accelerated), but making money and “cockroaching” burn rate could be more important than VC money in AR/VR 2.0.
Everyone else to Apple: If Apple launches smartphone-tethered smartglasses in late 2020, AR/VR 2.0 could have its “iPod moment,” where a major new form factor introduces the starting point for a long-term mass consumer market. It’s worth noting that this might not be the industry’s “iPhone moment,” as even with this catalyst we aren’t looking at a mass consumer market in the next five years.
Denial to acceptance: 2019 isn’t the “Year of AR/VR,” and Mark Zuckerberg’s “1 billion people in VR” might never happen. Mark’s come to terms with it, so hopefully a sense of cautious optimism could prevail during the next stage of the market.
See the full article here: https://techcrunch.com/2019/01/14/for-ar-vr-2-0-to-live-ar-vr-1-0-must-die/