The road ahead for augmented reality

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Technology Forecast: Augmented reality
Issue 1, 2016
The road ahead for
augmented reality
By Vinod Baya and
Erik Sherman
While existing smartglasses are adequate for many
uses in enterprises, future advancements in optical
performance, 3-D capabilities, authoring capabilities,
and new interaction methods will define their success
and the expansion of the market.
Augmented reality (AR) is quickly
becoming an important technology in
the enterprise, bridging the digital world
and the physical world. In a recent pilot
project, DHL equipped warehouse
workers with AR-enabled smartglasses
that guided them through item picking
for order fulfillment. The result: fewer
errors and a 25 percent increase
in efficiency.1
Increased
digitization means
the information
demands of
workers in the
field are rising
and starting to
match those of
deskbound
workers.
Improving logistics like this is
important—logistics represented 8.3
percent of US gross domestic product
(GDP) in 20142—but delivering needed
information to any workers under any
circumstances is increasingly essential
to maintaining a competitive edge. AR
offers potential benefits to field service,
maintenance, marketing, customer
support, and other functions.
Increased digitization means the
information demands of workers in the
field are rising and starting to match
those of deskbound workers. “The
deskless workers need access to rich
information, schematics, videos,
pictures, flows, lists, instructions,
charts, and so on,” says Ketan Joshi, vice
president of marketing for Atheer,
maker of smartglasses and an AR
platform. To meet such challenges,
an equipment manufacturer can
avoid sending experts to distant mine
sites, for example, by outfitting field
technicians with AR-enabled
smartglasses that allow the experts to
guide the field workers in diagnosing
problems and repairing equipment.
Until recently, PCs and mobile devices
were the common AR platforms, but
smartglasses are becoming the big
driver of AR adoption. “One problem is
that you can’t hold a PC or a tablet with
one hand or two hands while you’re
trying to do something else in the
physical world,” says Christine Perey,
executive director of the Augmented
Reality for Enterprise Alliance (AREA),
whose members are from construction,
oil and gas, and other mature industries.
AR-enabled smartglasses offer a
significant opportunity in enterprise
computing through hands-free
access to contextual information
optimized for workers engaged with the
physical world.
The technology represents the next step
in the coming together of the physical
and digital worlds that is shaping
human experience. (See Figure 1.)
However, there are hurdles to adoption.
AR is limited by a highly fragmented
ecosystem of hardware platforms and
operating systems; a lack of standards
for sharing data and supporting
interactions; and technical barriers in
optics, 3-D capabilities, authoring tools,
and interaction methods.
This issue of the PwC Technology
Forecast will analyze emerging
technologies that are shaping AR. This
first article introduces the various
technologies. Future articles will delve
deeper into the trends and implications
of optics, 3-D capabilities, and other
key technologies.
……………………………………………
1
“DHL successfully tests Augmented Reality
application in warehouse,” news release, January 26,
2015,
http://www.dhl.com/en/press/releases/releases_2015/l
ogistics/dhl_successfully_tests_augmented_reality_ap
plication_in_warehouse.html, accessed January 11,
2016.
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2
Mark Solomon and Toby Gooley, “‘State of Logistics
Report’: U.S. business logistics costs hit $1.45 trillion
in 2014, up 3.1 percent from 2013,” CSCMP’s Supply
Chain Quarterly, June 24, 2015,
http://www.supplychainquarterly.com/news/20150624state-of-logistics-report-us-business-logistics-costs-hit145-trillion-in-2014-up-31-percent-from-2013/,
accessed January 11, 2016.
The road ahead for augmented reality
Figure 1: For a long time, the human experience of using technology has been siloed
across the digital world and the physical world, moving back and forth between
them. Now, many emerging technologies are setting the stage for the silos to break.
In particular, AR is driving the fusion of the human experience across the digital and
physical worlds by overlaying digital information on top of the physical world.
The physical and digital
reality landscape
AR is part of a broader landscape of
emerging trends and approaches that
bridge the physical and digital
experiences. This landscape, as shown in
Table 1, includes:

Augmented reality (AR): Devices
or wearable displays provide
information tailored to the context
and space in which a user works. The
information appears as visual or
audio supplements that help a worker
more efficiently undertake a task.
PCs, mobile phones, and tablets all
are active platforms for AR, but
smartglasses, and their hands-free
use, will drive the next wave for AR.

Mixed reality (MR): A superset of
AR, MR adds digital objects to
physical ones, anchoring them to
points in the real world. Users can
then perceive physical and digital
objects in the same space.

Virtual reality (VR): Users
enter and interact with an immersive
digital world. Enterprises have used
VR in niche training and learning
applications for years, but the
difficulty and cost of developing and
deploying content have been largely
prohibitive. Some National Football
League (NFL) teams3 and high
……………………………………………
3
John Gaudiosi, “Here’s why NFL teams are training in
virtual reality,” Fortune, August 10, 2015,
3
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http://fortune.com/2015/08/10/strivr-virtual-reality-nfl/,
accessed January 11, 2016.
The road ahead for augmented reality
schools and colleges4 use VR to train
athletes and to analyze plays.
Mainstream VR use is still years away
and might materialize when AR and
VR ultimately converge in five to
ten years.

Extended reality (ER): Humans
direct devices through separate
physical spaces in real time. Those
devices could be flying drones,
remote undersea exploration craft,
or surgical robots. Although in
common use and related to the other
technologies, ER is often overlooked
as a separate category.
Table 1: The key characteristics of the various emerging technologies that blend the
physical and digital worlds
Feature
Augmented
reality (AR)
Mixed reality
(MR)
Virtual
reality (VR)
Extended
reality (ER)
Presence: The user is at
the location of the
experience
Yes
Yes
No
No
Real time: The user is
interacting in real time
with the environment
Yes
Yes
Yes and No
Yes
See-through capability
Yes
Yes
No
No
Movement: The user can
physically move in the
environment
Yes
Yes
No
No
Time horizon of
enterprise adoption
2 to 4 years
3 to 7 years
2 to 4 years
Already in
use
Among all these trends, AR offers the
most opportunities that are accessible to
enterprises today. “Our analysis has
found that there are more than 110
million deskless workers in the world,”
says Joshi of Atheer. Deskless workers are
engaged with the physical world, and
hands-free solutions can provide a lot of
value by bringing rich information to
workers to make them more efficient and
effective. Although AR solutions today
have some limitations, they are evolving
quickly.
Smartglasses: A force
driving augmented reality
AR has been around for a few decades. Its
evolution started with the invention of the
head-mounted display by Ivan
Sutherland and Danny Cohen as an
academic research project in 1968.5 After
many efforts to expand the concept of VR,
the idea of AR was suggested in 1990. By
1992, Louis Rosenberg at the US Air
Force’s Armstrong Laboratory (later
merged into the Air Force Research
Laboratory) developed the first
immersive AR system, using digital
……………………………………………
4
John Gaudiosi, “How this company is using virtual
reality to teach football,” Fortune, May 22, 2015,
http://fortune.com/2015/05/22/eon-sports-vr-football/,
accessed January 11, 2016.
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5
Ivan E. Sutherland, “A head-mounted three
dimensional display,” Fall Joint Computer Conference,
1968, http://design.osu.edu/carlson/history/PDFs/p757sutherland.pdf, accessed January 11, 2016.
The road ahead for augmented reality
overlays to guide people through physical
tasks.6
Today, AR has smartphone and tablet
implementations that offer enterprise
value. One billion smartphones in use
have sensors and graphics acceleration to
allow AR, but less than a tenth of users
actually employ such applications.7
At Boeing, factory trainees assembling a
mock airplane wing were 30 percent
faster and 90 percent more accurate
using AR-animated instructions on
tablets than trainees using instructions in
PDF documents.8 Boeing is also
experimenting with smartglasses, which
likely will be the dominant AR platform.
Smartglasses for hands-free use cases will
increasingly define the enterprise AR
market. Available in the eyeglass form
factor, smartglasses are wearable
computers fully capable of running AR
apps that present digital information
layered on top of or integrated with the
physical world and that enable a user’s
interaction with the information.
Most industry analysts are generally
positive about enterprise adoption of
smartglasses during the next five years,
projecting robust growth in the size of the
overall AR market. Improving and
increasing the capabilities of the devices
and a drop in their prices likely will fuel
this growth.
However, today the smartglasses market
is highly fragmented, which is indicative
of its early days. There are diverse
hardware form factors, different
operating systems, different data formats,
and wide-ranging capabilities. Over time,
platforms should emerge that can operate
across the diversity of devices and
connect to the existing back ends that
most enterprises have.
Today, no such platform is dominant.
Emergence of a dominant platform would
likely signal the inflection point where
adoption accelerates.
Vendors of smartglasses include Atheer,
castAR, Daqri, Epson, IMMY, Meta,
Sulon Technologies, and Vuzix. Microsoft
entered the market when it announced
HoloLens9 in January 2015, and Google
has been active with Google Glass and its
investment in startup Magic Leap.10
Challenges to adoption
While many solutions are on the market
and innovation is significant, many
barriers limit enterprise adoption. (See
Table 2.) “Most people have not had their
aha moment with AR,” says the AREA’s
Perey. “Getting them to that moment
without creating hype or expectations
that the technology cannot meet is a
serious issue that the AREA is working to
address.”
……………………………………………
6
Louis B. Rosenberg, “Virtual fixtures as tools to
enhance operator performance in telepresence
environments,” Proc. SPIE 2057, Telemanipulator
Technology and Space Telerobotics, 10 (December 21,
1993), doi:10.1117/12.164901,
http://dx.doi.org/10.1117/12.164901.
7
Status Update on AR Market and Open & Interoperable
Augmented Reality, AR Community, September 17,
2015,
http://www.perey.com/ARStandards/AR_Community_Sta
tus_Sept_17_2015.pdf, accessed January 11, 2016.
8
Eric Johnson, “Boeing Says Augmented Reality Can
Make Workers Better, Faster,” Re/code, June 8, 2015,
http://recode.net/2015/06/08/boeing-says-augmented-
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reality-can-make-workers-better-faster/, accessed
January 11, 2016.
9
Vlad Savov, “Microsoft announces windows
holographic with HoloLens headset,” The Verge,
January 21, 2015.
http://www.theverge.com/2015/1/21/7867593/microsoftannounces-windows-holographic, accessed on January
11, 2016.
10
David Gelles and Michael J. de la Merced, “Google
Invests Heavily in Magic Leap’s Effort to Blend Illusion
and Reality,” New York Times, October 21, 2014,
http://dealbook.nytimes.com/2014/10/21/google-investsin-magic-leap-an-augmented-reality-firm/, accessed
January 11, 2016.
The road ahead for augmented reality
Table 2: Key barriers to enterprise adoption of augmented reality
The following barriers limit the expansion and growth of AR solutions based on the
smartglasses platform:
1.
2.
3.
The largest
barriers are
technical and
encompass the
performance of
the smartglasses,
their size,
weight, power
requirements,
and so on.
4.
5.
6.
Fragmentation in the ecosystem: Many variations in hardware, many operating
systems, and many interaction methods
Lack of standards: Standards to describe information, share data, support interactions,
integrate systems, and swap components or algorithms
Technical barriers: Improving performance across areas such as optics; 3-D tracking,
orientation, and display; interaction; and AR content authoring
Financial barriers: The cost of procuring devices, methods to measure business
impact, cost of ownership, and return on investment
Cultural barriers: Social, privacy, and intellectual property implications of introducing
devices that are always on, that continuously track, and that are able to record the
environment
Operational risks: Challenge of introducing new hardware and process change,
securing data and the device, and repair and maintenance of the device
As the examples in this article suggest,
early adopters gain benefits such as
reduced errors, improved efficiency, and
better use of labor. However, success in
one area is difficult to replicate in other
situations, each of which has custom
requirements. “All AR experience
authoring is basically handcrafted, which
is not scalable,” Perey observes. As
standards emerge across hardware,
operating systems, data exchange, and
interaction methods, then adapting
solutions to a multitude of use cases will
become easier.
The largest barriers are technical and
encompass the performance of the
smartglasses, their size, weight, power
requirements, and so on. Therefore,
technological advances will be the main
driver of AR adoption.
Key technologies that will
shape AR’s future
AR capabilities will evolve through the
loosely coordinated development of four
technology areas, as Figure 2 illustrates.
These are:

Optics: The optical performance of
most smartglasses has a long runway
for improvement. While digital
imaging and video capture ability are
highly sophisticated and useful in AR,
the real challenge in optics is the
display of information. For instance,
field of view today is typically only 25
to 40 degrees horizontal and vertical,
compared to the 190 degrees
horizontal and 120 degrees vertical
for normal human vision.11 Limited
optical capabilities reduce the variety
of use cases and the potential of AR.
The weight, size, and power
requirements of optical components
can be expected to continue to
improve.
……………………………………………
11
Bettina L. Beard, Willa A. Hisle, and Albert J.
Ahumada, Jr., Occupational Vision Standards: A
Review, NASA, 2002.
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The road ahead for augmented reality


3-D capabilities: AR pushes the
computing paradigm into three
dimensions. Sensing, tracking,
orientation, interaction, modeling,
and display all must happen in
three dimensions. Desktop
computers already can provide
powerful 3-D capabilities in real
time, but they have more
processing power than AR displays.
While today’s 3-D capabilities are
substantial, progress is needed
across tracking, processing, and
display to ensure the virtual world
and the physical world match
precisely and change in real time
according to user movement, so the
virtual content seems anchored to
the real world without jitters and
delays. Progress is also needed in
the accurate integration of 3-D
audio, charts, images, and video in
the display so they are intuitive,
seamless, and responsive to
user actions.
Authoring: Compelling AR
solutions will be built using
compelling content tailored to the
environment, to the work context,
and to the user. Authoring methods
today are complex, fragmented
across media types, and not well
integrated. Look for new solutions
that reduce complexity while taking
advantage of content that already
exists. The emergence of these tools
is essential to make AR technology
accessible to more developers.

Interaction: AR solutions are
pushing human-computer interaction
beyond keyboard, mouse, and touchscreen methods. Advances are under
way to use gestures, speech, eye
tracking, motion tracking, and other
new methods to enable interaction
with information in 3-D space. Most
solutions will use a combination of
several methods to accommodate
varying environmental conditions,
such as noise and brightness.
Future PwC Technology Forecast articles
will explore developments and trends in
these areas in more depth.
Figure 2: Four technology areas that will shape the future of augmented reality
Is AR ready for takeoff?
The value proposition of AR solutions
seems to be real. The appetite for
contextual and pertinent information at
the point of action in a hands-free
manner is real. The benefits of higher
efficiency, reduced errors, and optimal
use of labor are also real—as early
adopters are learning. But is AR
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technology really ready for broader
enterprise adoption?
The key challenge is to make the
solutions so easily plug and play that the
industry gets past the early adopters and
expands the depth and breadth of use
cases the technology can support.
The road ahead for augmented reality
But many more enterprises are piloting
the technology. The AREA’s Perey notes
that her organization’s members are all
large, traditional enterprises heavily
invested in the physical world, and they
are motivated to try anything to make
their workers more effective. That’s
where the digital world comes in. “For
these members,” she says, “AR further
augments the capabilities of the human
resources to be more effective in their
work.”
To have a deeper conversation about augmented reality, please
contact:
Gerard Verweij
Principal and US Technology
Consulting Leader
+1 (617) 530 7015
[email protected]
Vinod Baya
Director, Center for Technology
and Innovation
+1 (408) 817 5714
[email protected]
Chris Curran
Chief Technologist
+1 (214) 754 5055
[email protected]
These are early days and the market is
still fragmented. The devices are good,
but they must get better to attract more
enterprises and more use cases. Many
areas of technological progress,
particularly optics, 3-D capabilities,
authoring, and interaction, will shape
AR’s future. Over the next two to three
years, look for substantial innovation
that significantly improves the
performance and cost of smartglasses.
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The road ahead for augmented reality