In TBR’s recently published report Digital Transformation: Emerging Technologies: AR/VR, we discussed the AR, mixed reality (MR) and VR ecosystem and various applications of the technologies across industries such as automotive, healthcare and consumer. The report outlined key solutions being deployed today across the device spectrum, covering augmented, mixed and virtual reality headsets, which are characterized by how they manipulate or transfix virtual images on a physical environment, in addition to smartphone, tablet and heads-up displays in automobiles. This report’s focus will center around the Head Mounted Device Spectrum and the leading use cases that are being deployed within operational and industrial environments.
In the above graphic, as you move from AR to VR, the level of immersion a device provides to its user increases. For instance, monocular and binocular AR devices are typically providing a fixed image over the physical environment, while MR and VR devices are capable of superimposing images on the physical environment and allow the user to manipulate those images. While MR and VR devices offer similar capabilities in regard to layering virtual information on the real world, a VR device closes the user off from the physical environment, providing a completely immersive experience for the user.
MR devices, such as Microsoft’s (Nasdaq: MSFT) HoloLens 2, rely on a digital field of view to place virtual images over the actual physical environment, providing users with a better field of vision compared to their VR counterparts. Further, leading VR devices in the market today, such as the HTC VIVE, require a tether to a high-powered PC as they do not contain onboard computing like the HoloLens 2 does, increasing their cost over device counterparts and limiting their appeal among customers.
TBR believes these form-factor constraints limit the addressable market of VR headsets to consumer industries, such as gaming and entertainment, as they create significant challenges regarding user safety within industrial environments such as aerospace as well as in operational use cases such as field servicing. While VR devices will find traction in enterprise and industrial settings for use cases such as training or productivity, this report will focus on AR and MR devices supporting operational use cases in industrial environments today, and the market dynamics that are keeping the technology from reaching mainstream adoption.
Understanding industrial use cases
AR technologies have been tested in industrial settings for years, with the majority of these early trials centered on monocular AR devices. For instance, dating back to 2016, the AR device specialist Vuzix (Nasdaq: VUZI) has worked with clients such as Airbus, General Electric (NYSE: GE), ExxonMobil (NYSE: XOM) and Merck (NYSE: MRK) around deployments of its M100 Monocular device. These early pilots largely focused on low-complexity use cases such as remote support and component assembly. The top challenges cited in these pilots largely centered on the immaturity of device form factors, with basic aspects such as device comfort, battery life or overheating limiting their appeal to customers.
Further, early devices contributed to the market perception that AR devices were highly futuristic yet unrealistic. For example, Google Glass, which was largely targeted at consumers, was piloted unsuccessfully by industrial customers due to form-factor challenges. While these early pilots did not reach mainstream adoption, they provided customers with a glimpse into the technology’s potential as they offered tangible ROI metrics, including error reductions during the assembly process and an increase in units produced, but would require significant maturation to the underlying device hardware for organizations to successfully deploy the technology.
It is easy to get lost in all of the marketing hype related to AR and mixed reality (MR) devices and solutions. In this report, TBR explores the leading use cases that characterize the near-term opportunities within industrial environments today, while also taking a closer look at the market challenges that technology suppliers and industrial customers are grappling with. Though end-user intrigue around AR and MR in industrial settings is high, the market has yet to develop and may require greater involvement from IT services vendors to push the technologies out of niche deployments and toward mainstream adoption.