Emerging Tech

Applications of Augmented Reality and Virtual Reality

Augmented reality (AR) and virtual reality (VR) have seen an explosion of interest in recent years, especially in gaming and social media. But their potential stretches much further.

On the conservative end, Goldman Sachs released projections that show the AR/VR market growing to $80 billion in annual revenue – with 445 million users – by 2025.

On the high end, ABI Research and Digi-Capital place the AR/VR market at $100 billion and $120 billion, respectively, by 2020.

Approximately $35 billion of that is expected to come from software applications, which are broken down here…

Chart - Projection of AR and VR Software Market Size by 2025

AR and VR have applications in a wide range of industries, though video games and social media have taken the most prominent roles to date.

For example, when the social media app Snapchat first burst onto the scene, its initial selling point was its unique photo and video filters that incorporated AR.

Even Facebook (Nasdaq: FB) – after failed attempts to acquire Snapchat in 2013 and 2016 – has since replicated those features and ramped up its own AR content across its apps.

But Facebook didn’t stop there. In 2014, it acquired Oculus VR – the developer of the Oculus Rift VR headset – for $2 billion.

At the end of 2018, it released Portal – the company’s first self-branded smart camera device for video chat – which incorporates AR content.

And just a few months ago, Facebook released the Oculus Quest – an all-in-one gaming headset.

All of this is part of Mark Zuckerberg’s publicized goal to get 1 billion VR users.

But the potential for AR and VR extends far beyond the scope of social media and gaming.

In the healthcare arena, AR headsets are being developed to help surgeons see imaging data and patient information in their fields of view to help minimize medical errors.

In both real estate and entertainment, companies are developing high-end cameras for 3D imaging platforms that will enable people to take immersive virtual tours of properties and landscapes, or experience live events such as concerts and sports games from the comfort of their own homes.

AR and VR are still in their early stages. But this fast-growing trend is one we’ll be monitoring closely in the months and years to come.

Good investing,


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