AR Glasses Coming Soon To A Face Near You

On business trips, Pete Jameson gets odd looks from fellow airplane passengers when he's in his seat typing on a keyboard with no screen to be seen.

But Jameson is looking at a jumbo-size display, thanks to augmented reality glasses that project images for his eyes only. His headset looks like slightly oversized sunglasses and what he sees is not visible to others.

Jameson is chief operating officer of ODG, one of a host of companies pursuing the emerging market of augmented reality, or AR, glasses.

"I travel all the time and one of the cool-use cases for me personally is the ability to slip on a pair of glasses and wear my tablet," Jameson told Investor's Business Daily. "I can work on a plane with a rollout Bluetooth keyboard and get on Wi-Fi on a plane. Now I have a 100-inch screen that behaves just like my tablet does, that's totally private. Nobody can see what I'm doing."

Today we have information at our fingertips, but tomorrow it could be right at our eyeballs.

That's the promise of augmented reality. Instead of looking back and forth at your smartphone screen for navigation and other situational data, the information would be displayed in your field of vision using AR glasses.

Tech companies big and small are racing to take the lead in this new market, which is poised to be the next generation of mobile computing. Apple (AAPL), Microsoft (MSFT) and Google parent Alphabet (GOOGL) are among the tech heavyweights developing products for this new computing paradigm.

The market for augmented reality glasses currently is focused on niche industrial and enterprise applications. Those applications usually have a compelling return on investment, making the purchase of headsets that cost a few thousand dollars each worthwhile.

AR Glasses: Privacy And Productivity

Commuter privacy and productivity likely will be one of the early consumer uses of AR glasses, said Jameson.

"How many times have you been traveling on a plane and you're trying to hold your mobile phone to see this little thing or you've got a tablet or a laptop and the person next to you looks at what you're doing or watching?" he said.

The nice part about the experience is that the AR glasses wearer is not disconnected from the environment as they would be with virtual reality goggles. With AR headsets, you can still see and hear what's happening around you, he said.

Jameson elicits some raised eyebrows when he's using a wireless keyboard with his AR glasses.

"The looks I get are like, 'Dude, what are you doing?' " he said.

For now though, Apple and Google are taking baby steps in the market by developing AR applications for their mobile operating systems for smartphones and tablets. Instead of overlaying digital information on a person's field of view with glasses, the information is presented over what the smartphone camera sees and is shown on the device's display.

To spur the market, Apple has come out with augmented reality software development tools called ARKit for the iPhone. Google has followed suit with ARCore for Android smartphones.

Adoption Still Low

Still, PricewaterhouseCoopers recently published survey data indicating that AR adoption among enterprises is relatively low at 10%. But 24% of enterprises report interest in investing in AR over the next three years.

By industrial market, automotive shows the most AR interest with 18% reporting investment in the technology today, and 31% planning over the next three years. Health care is another industry interested in AR glasses. Auto industry apps include AR-guided assembly and maintenance, while health care is using AR for graphical overlays in surgery.

Most of the current AR headset makers, including Daqri, Meta, ODG and Vuzix (VUZI), are focused on enterprise markets because the hardware is expensive, as are the software and services, IDC analyst Tom Mainelli said.

"They can see a clear path forward because companies will pay for this," he told IBD.

Augmented reality was a hot topic of discussion at the CES consumer electronics show, which ran Jan. 9-12 in Las Vegas. Companies like Vuzix, ThirdEye Gen, Skully Technologies and Solos Smart Glasses exhibited AR products at the massive trade show.

One company not at CES was closely watched startup Magic Leap. In December, it previewed its long-awaited AR smart glasses, called Magic Leap One. It expects to begin selling the hardware later this year, but hasn't announced pricing or a release date.

Research firm ARtillry Intelligence predicts that the enterprise market for AR will mushroom from $829 million in 2016 to $47.7 billion in 2021. It sees the consumer AR market surging from $975 million in 2016 to $15.8 billion in 2021.

The enterprise AR market will be fueled by headsets capable of all-day use with a quantifiable return on investment, ARtillry analyst Mike Boland said. He adds consumer AR will be driven by smartphone applications in the near term, then the rumored 2020 launch of Apple's smart glasses could shift the story to headsets.

There will be 505 million AR-compatible smartphones by the end of 2017 and 4.2 billion by 2020, ARtillry predicts. AR apps will help seed the market for the eventual introduction of smart glasses.

'Tweener Tech'

Some useful AR apps for smartphones have emerged such as software for visualizing how furniture would look in your room before you buy it, IDC's Mainelli said.

Still, AR on smartphones is a "tweener tech," he said. "It's not optimum, but it will prove the use case."

Apple CEO Tim Cook told a U.K. newspaper in October that he doesn't think the technology for AR glasses is ready yet. For instance, the field of view for the displays isn't big enough or of good enough quality, he said.

By putting AR capabilities into the iPhone, Apple has created a large addressable market for software developers today, Cook says.

"AR is going to change the way we use technology forever," Cook said on a Nov. 3 conference call with Wall Street analysts. "We're already seeing things that will transform the way you work, play, connect and learn."

For example, AR apps for education let students interact with virtual 3D models of the human body and solar system, he said. In addition to field of view, other challenges for consumer AR glasses include styling, battery life and the user interface.

In work settings, people aren't concerned about what AR glasses look like as long as they help them do their job better, Mainelli said. Commercial users also don't mind hooking their headsets up to an external battery pack or even a notebook computer, he said.

"Style is a big issue," Boland told IBD. "When you are asking someone to put something on their face, it's a large barrier to cross. AR glasses aren't there yet in terms of being small enough and sleek enough."

Google's Difficulties

Google experienced significant pushback several years ago when it introduced its Google Glass wearable heads-up display. The complaint was that Google Glass made people look like cyborgs.

Apple probably will spend the most time on the user interface, which could include voice commands, gestures and wireless hand controllers, Mainelli said.

The first iterations of Apple's AR glasses likely would be sold as peripherals to the iPhone. The glasses would offload processing and cellular connectivity to the iPhone to conserve battery life on the glasses and allow for smaller, lighter frames, Mainelli said.

IDC predicts that shipments of AR headsets will reach 24.6 million units in 2021, up from a mere 162,000 units in 2016. In 2021, 83% of AR headsets will be for commercial applications, with the rest for consumer use, it said.

Enterprise customers are interested in devices that can save them time and money, ODG's Jameson said.

The application getting the most traction now is telepresence, he said. In this application, a worker in the field live-streams video from a camera built into the AR glasses to a remote expert who can help identify and solve problems with equipment. The expert can guide the worker verbally and by using visuals put in the worker's field of view.

Another major enterprise application of AR glasses is assistance. A worker with a pair of AR glasses can identify a piece of equipment using a bar code or wireless beacon and call up maintenance checklists and step-by-step repair instructions and videos.

When AR glasses make the leap to the consumer market, it is doubtful that people will wear them all the time, Jameson said.

"What we're likely to see in the consumer market in the beginning are very purposeful use cases," he said. That includes the commuter privacy example as well as cyclists who want hands-free turn-by-turn directions and other information about what's around them, such as coffee shops, restaurants and ATMs, he added.

"Certainly this is going to be a major category in the next three to five years from a consumer perspective," Jameson said.

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