The four waves of augmented reality (that Apple owns)

We’ve been saying for the last couple of years that augmented/virtual reality is the fourth wave of consumer technology, and that AR could become much bigger than VR. But AR itself is not one giant wave, it’s a set of four big ones: mobile AR software, mobile AR hardware, tethered smartglasses and standalone smartglasses. These four waves could drive AR from tens of millions of users and $1.2 billion last year, to more than a billion users and $83 billion by 2021. Surf’s Consumer technology waves are not all the same. Some are ripples, others start small and swell to great heights and there’s an occasional tsunami. So what is each AR wave? Let’s start by defining them:

Mobile AR software: AR software that works on standard smartphones/tablets, like Apple ARKit for iOS and Facebook’s Camera Effects Platform.
Mobile AR hardware: dedicated smartphone/tablet AR hardware and software, like Google Tango phones.
Tethered smartglasses: AR smartglasses requiring a smartphone/tablet or PC host, like Meta smartglasses.
Standalone smartglasses: Self-contained AR smartglasses with no host, like Microsoft HoloLens (which they call mixed reality).

Mobile AR software
Mobile AR software is the tsunami that came out of nowhere, with Pokémon GO downloaded 750 million times in its first year. But where Pikachu gave consumers their first taste of mobile AR, Facebook’s AR platform and Apple’s ARKit for iOS democratize mobile AR software at scale as true consumer platforms.

Apple’s ARKit for iOS requires at least an iPhone 6s, iPhone SE, 2017 iPad or iPad Pro, with 300 to 400 million ARKit-compatible devices today. Eighty-six percent of iOS users installed iOS 10 a year after launch, so assuming iOS 11 follows a similar path and iPhones/iPads keep selling, ARKit could have an installed base of up to 400 million devices by the end of 2018.

Facebook’s Camera Effects Platform is being rolled out to Facebook Messenger’s 1.2 billion MAU, WhatsApp’s 1.2 billion MAU and Instagram’s 700 million MAU (with significant overlap). Facebook migrated 15 percent of WhatsApp users to Status 10 weeks after launch, 29 percent of Instagram users to Stories less than a year after launch and 54 percent of Instagram users to Direct four years after launch. A similar growth curve could deliver around 400 million installed base for Facebook’s Camera Effects Platform by the end of 2018 too.

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