Despite the fact that it was not a smart glass product, Apple was ranked as the third most important smart glass platform after Microsoft HoloLens and Magic Leap in a recent survey by the AR / VR industry's insiders of Digi-Capital and AWE. While this highlights Apple's natural benefits and industry support, how does a company that didn't even suggest a product rank than industry veterans like Google?
(Sources: Digi-Capital / AWE AR / VR Global Industrial Survey May 2019. See more details in Digi-Capital AR / VR Analytics Platform and Augmented / Virtual Reality Report Note: The percentages are not cumulative Investigation by AR / VR Adviser Digi-Capital and Extended World Expo ("AWE") by AR / VR CEO, C-Suite execs, corporate VP and AWE community members, not consumers. Statistics are merely industry perspective Methodology described in report
Smartglasses 5 Challenges
There are five challenges for the consumer's smartglasses to scale: heroism (ie, an Apple quality device, either made by Apple or someone else) , battery life all day, mobile connection, app ecosystem and price. While the heroine gets the most attention (we come back to it), two of the other challenges are not trivial.
Until a major breakthrough in battery technology, a lightweight pair of stand-alone AR smart glasses makes heavy duty AR hard to connect all day without battery pack or heat exchangeable batteries (fine for the business, a harder sale for consumers). And, as history has shown, there is a great risk for developers to invest in building plans for new platforms to installed base when scale. This is the chicken-and-egg problem in all new technology platforms.
Analyzing the Five Challenges of Apple's Roadmap, Digi-Capital assumes that Apple first launched smartphone tapes at the end of 2020 more than three years ago. But while Apple remains sphinx, only Tim Cook and his inner circle know and when it can happen and how it can look.
If Apple smartglasses start as a premium smartphone peripheral, not everyone is happy to pay for or carry two devices (eg Apple Watch). Apple can still sell dozens of millions of "Apple Glasses" to consumers in early adopters by 2023, which can also drive drive-your-own-device enterprise demand.
Microsoft HoloLens and Magic Leap
Smartglasses have been largely business focused, with short-term installed bases in the tens of thousands (eg Vuzix, Google Glass Enterprise Edition) for hundreds of thousands (Microsoft HoloLens 2 with its 100,000 unit US Army contract ). Digi-Capital forecasts enterprise smart-glass scaling to millions of users by 2023, powered by Microsoft, Google and a number of startups. Magic Leap is the creator / developer (and company) focused today, with the consumer playing a medium perspective.
In this context, it is not surprising that Microsoft HoloLens and Magic Leap are seen by the industry as the most important smartglass platform today. However, despite no Apple product in sight, the survey shows that the company can be a serious competitor if it chooses to enter. If you see a potential Apple launch through the lens with smartglass five challenges, it will be easier to see why.
Apple of my eye
If anyone is to launch Apple quality classes, it's Apple. Despite a story that the company is more evolutionary than revolutionary in recent years, Apple's design track is still a standout.
Unless Apple has a secret battery technology under cover, smartphone-plugged smartglass can be a practical solution to the battery's current technology problem. Physical sealing of smartglasses by wire may be better for battery life (two batteries across the iPhone and Apple Glasses, plus no wireless commands between devices), but are not in compliance with Apple's peripheral guidance (eg, Watch, AirPods). Apple could go down the wired path with the quick coupler, but wirelessly could see it favor form over function.
Mobile connectivity is a no-problem if there is a tethered iPhone in the mix, unlike Wi-Fi-based HoloLens and Magic Leap. The impact of 5G on the AR Cloud (a real-world 3D data layer) can be another factor.
ARKit installed base is set to approach three-quarters of a billion units this year and top 800 million by 2020 (Note: mobile AR-installed base is compatible / configured units, not active users – a lower number). But the challenge for mobile AR is critical usage cases, to change the user experience in a way that users care about, and it cannot be done in any other way. Pokémon Go, message filters and Google Maps are a start, but several critical usage cases are needed.
Although usage cases should continue to evolve, Apple Glasses can be supported by the launch of a three year ARKit developer developer system by late 2020. In some ways, this explains Tim Cook and Apple's relentless focus on ARKit since 2017. Digi-Capital analysis also shows ARKit average revenue per user (ARPU) is over twice Google's ARCore ARPU, and ARCore has a smaller 400 million installed base today (not expected to pass ARKit to 2021). Along with Apple's integrated ecosystem, this can reduce the developer's concerns about investing in a new Apple peripheral platform after the relatively slow burning of Apple Watch.
Apple has many years of price experience with iPhone peripherals, so Apple Glasses can start as the most expensive Apple periphery to date (ie, more than Watch, less than iPhone). This can limit sales to innovators and early adopters for 12-18 months after launch. Apple follows the typical price guide to attract consumers in the early majority when the market develops.
Another benefit of a smartphone-approximate approach, if that's how Apple rolls, is to reduce material costs over all-in-one solutions (e.g., HoloLens) or breakout boxes (e.g. Magic Leap) by sharing the computing power with the iPhone. This is another of Apple's natural benefits to non-smartphone players, and allows the company to move on pricing. This advantage can also be shared by competitors from smartphones (eg Samsung) if they launch similar products.
Who wins smartglasses?
Although it's too early to tell the consumer's smartglass, enterprise smartglasses are already running ROI for companies like Lockheed Martin. While this is encouraging for Microsoft, Magic Leap and other smartglass players, another survey survey may give them a break to think.
Digi-Capital and AWE's survey cover all major AR / VR platforms, not just smartglasses. The latest survey in Q3 2018 was before Facebook announced premium standalone VR Oculus Quest, at a time when only the Oculus Santa Cruz prototype that preceded it had been revealed. The previous prototype recorded 41% industry support in the 2018 survey, which increased 1.5 times to 61% support for the Oculus Quest launch product this year.
Apple has already attracted 43% industry support for a smartglass product that it has said and revealed nothing. So it is not unreasonable to speculate on a greater relative abolition that supports Apple Glasses if and when it starts. While HoloL's inventor Alex Kipman and Magic Leap, CEO Rony Abovitz, should be happy with their industry support today, Apple could get a lot of love from the industry if it chose to take them on.
(For more details see Digi-Capital AR / VR Analytics Platform and Augmented / Virtual Reality Report)
Tim Merel is CEO and Isabelle Hierholtz is User Strategy Director of Silicon Valley AR / VR adviser Digi-Capital. Merel will present more details in her lead role in the world's largest AR / VR conference and exhibition AWE 2019 in Santa Clara on May 29.