Innovative new applications using virtual reality headsets are seemingly popping up everywhere these days, especially in the gaming, education, and entertainment arenas. While we will likely look back at 2016 as the year of VR, many industry observers believe augmented reality (AR) glasses may actually rule the day in a few short years.

According to a recent report from AR/VR M&A adviser Digi-Capital, the combined AR/VR market is projected to reach $120 billion in total revenue by 2020. However, the firm believes AR will grab the lion’s share of the market at $90 billion compared to VR’s $30 billion.

Why the huge projected revenue chasm between the two technologies? How will AR eventually dominate the category?

This wide discrepancy in adoption over the coming years is likely due to the fundamental difference between VR and AR. Virtual reality offers a closed, stationary and fully immersive experience, shutting the user off from the outside world by submerging them in a virtual 3D world. The power of VR isn’t easily portable — most VR devices are connected to a high-powered PC to run their graphic-intensive realities. And, of course, VR experiences are, by definition limited to controlled environments; they don’t extend into the real world.


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AR, on the other hand, lets users view 3D imagery superimposed onto their real-world environment, offering contextual data and graphics in their field of vision. The user is generally not tethered to a computer, with the processing power stored either in the glasses or a small controller. The key takeaway is that AR systems can be productively used anywhere.

This basic distinction suggests that, in the long-term, there will be far more use-cases for AR than VR.

What might those applications be? Currently, adoption of AR technology is primarily taking place in the enterprise. AR headsets and glasses are appearing in manufacturing, logistics, remote service, retail, medical, education, and a variety of other fields. One popular AR application from Atheer is providing ‘see-what- I-see’ functionality, enabling off-site specialists to provide real-time guidance and expertise to troubleshoot an issue [disclosure: Atheer partners with Epson, where I work]. Augmented reality displays are also being used to train technicians in common routines, or provide surgical guidelines and pertinent information to doctors in the operating room.

AR glasses can also feed employees real-time data layered over the real world to show, for example, security clearances of people, status of machinery in a factory, and more. With the ever-rising Internet of Things, one can envision a world where, via AR, data turns into decision-making much more quickly than it does today.

Consumer adoption of AR glasses will follow enterprise in the coming years, though the pace of adoption is dependent on continuing enhancements in comfort, price, form factor, and usability. And while the AR industry is still defining valuable applications and use-cases, a few are already gaining a foothold, such as first-person views (FPV) for safely piloting quadcopters.

It’s safe to say that the majority of consumers will have their first introduction to an AR device at a museum, sports venue, or amusement park. Movie theaters will also expose consumers to AR glasses, providing translations and subtitling as well as enabling the visually impaired to see the picture better.

In the near future AR glasses will also be easily converted to VR with a simple cover for the device for stationary viewing of 3D worlds. This will become possible as the field of view, or digital display area, of AR glasses increases to match that of VR devices.

Those manufacturers already ahead in the AR industry will find their devices much easier to modify for VR than vice versa. AR technology requires designers to focus much more on user wearability, comfort, and moving around safely than their VR cousins. From a content creation perspective, the larger numbers of VR developers currently designing 360-degree, 3D content will ensure they have the skills and tools necessary to build optimized AR experiences as the adoption rate for AR glasses continues to climb.

Because of its ability to enhance, rather than disrupt the user’s real world, and the hardware’s ability to be powered via battery, AR is a true mobile technology. Many believe AR glasses may even become an alternative to today’s smartphones and tablets, with millions of users employing the technology to augment their daily lives, whether at work or at home.

The main hurdle for mass market adoption will be social acceptance. We’ll overcome this hurdle when 1) the hardware is indistinguishable from normal glasses 2) the public understands the utility of the device (real-time translation, vision improvement/enhancement, etc).

Eric Mizufuka is a Product Manager in the New Markets group at Epson America. Over the past several years, he has helped launch three generations of the Epson Moverio smart glasses while working with developers to build apps for the platform. He previously worked at Deloitte Consulting. You can follow him on Twitter @wteric.

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