The augmented reality (AR) market is expected to reach over $97bn by 2028, bringing with it a dizzying change in the way we interact with the world and tech.
Unlike virtual reality, which creates a completely artificial environment, augmented reality refers to an interactive experience that combines the real world and computer-generated content.
“In terms of potential, augmented reality is the next version of the internet,” Richard Godfrey, CEO of software company Rocketmakers, tells Sifted. “Everybody that has a website or an app today will be involved in some kind of immersive experience in the future.”
In terms of potential, augmented reality is the next version of the internet
Sectors such as entertainment, healthcare and retail are predicted to integrate the technology the quickest. But challenges such as consumer adoption, technical skill and ethical concerns remain.
Sifted dug into the data on augmented reality and spoke to the experts to see how AR is revolutionising the tech ecosystem and startups — and the exciting places it could be going next.
1/ There will be an estimated 1.73bn active AR user devices by 2024
There will be an estimated 1.73bn active devices (smartphone apps and other devices) using AR by 2024.
While phones are the key to augmented reality in the immediate future, creating headsets which are light, cost-effective and unobtrusive is essential for widespread consumer adoption. By next year, Statista anticipates that global AR headset shipments will reach over 30m units — over twelve times the number shipped in 2020.
“The great thing about augmented reality is there's already over a billion smartphones in people's hands that can be used to navigate these 3D extended experiences,” Godfrey says.
“But unfortunately, that’s not always a natural ergonomic way of engaging with an environment — a little window into another world isn’t really compelling enough.”
The great thing about augmented reality is there's already over a billion smartphones in people's hands that can be used to navigate these 3D extended experiences
Kathleen Cohen, an extended reality strategist at XR development consultancy (AR/VR/MR) The Collaboratorium, agrees, adding the most transformative tech is yet to come.
“The promise that Apple is going to come out with regular glasses where you can see the real world with an ultra high resolution digital infrastructure laid over it, that’s what everyone’s banking on,” says Cohen.
2/ 71% of consumers say they would shop more often if they used AR
Augmented reality in retail is forecasted to be worth $6.7bn by 2028, with innovations ranging from virtual fitting rooms to customers using 3D representations of products to see how they would fit in their homes.
But only 1% of retailers say they are using augmented reality right now in their buying experience — and 52% are not prepared to start using the new technology.
The key could be companies that bridge the gap. Beam, a technology incubated inside Rocketmakers which will soon spin off into its own company, creates user-friendly augmented reality experiences.
“In the olden days, if you wanted to create a website you’d have to have HTML and CSS skills, but now you can drag and drop some templates and you’ve got yourself a really nice looking website,” Godfrey says. “The idea with Beam is that it’s like Squarespace for the metaverse.”
Beam also provides analytics such as logging how long users look at an object and interact with it in an immersive environment, so that companies can see their return on investment.
3/ Augmented and virtual reality in healthcare is predicted to reach $19.6bn by 2030
Though gaming is the birthplace of commercial augmented reality, the healthcare sector is now driving innovation in a very different way.
“Some tech progression will come from gaming,” says Richard Carter, VP of engineering at Proximie, which uses augmented reality to allow surgeons to advise remotely on operations in areas with poor connectivity.
“But we’ve got a health system under increasing pressure to find efficiencies, with increased demand from an ageing population and rising expectations, and because of that we’re going to see the health system drive the development of very specific solutions.”
One of the counterintuitive things about augmented reality is that the bandwidth requirements go down, not up
Proximie uses augmented reality to overlay patient scans and X-rays into live surgery, and to allow surgeons to remotely show hand positioning via webcam. Using computer vision, Proximie removes the background of the image and leaves only the hand position, which puts less strain on the internet connection.
“One of the counterintuitive things about augmented reality is that the bandwidth requirements go down, not up,” Carter says. “We actually end up sending less information.”
The next step for Proximie is using computer vision to render a 3D hand using the coordinates of a person’s joints, rather than sending an image of a surgeon’s hand position, to use the bandwidth even more efficiently.
4/ Augmented reality in entertainment could hit nearly $4.5bn by 2030
Augmented reality in entertainment is expected to boom — from games to virtual concerts and sports matches — but this sector also raises some of the biggest ethical concerns. How companies navigate these concerns will be critical.
“I'm not sure we’ll quite get to the situation of everybody sitting in their basement being fed by tubes while they're in a virtual world with goggles on,” Godfrey says. “But I had an experience not that long ago where I was in a virtual gaming world for long enough that coming out of that virtual world was a jarring experience.”
While creators want to keep users engaged, spending too much time in the virtual world has been linked to detrimental mental health impacts, which may impede growth.
“One of the things that we've done to try and combat that with Beam is to create some models which do the opposite, so they take people dramatically out of that experience,” Godfrey says.
Rather than seeing similar things it shows you something quite different, so we give creators the opportunity to break people out of that reinforcing bubble
“Rather than seeing similar things it shows you something quite different, so we give creators the opportunity to break people out of that reinforcing bubble.”
Cohen, a tech humanist — or person who believes in using immersive technology to nurture intellectual and creative potential while centring the vulnerability in us all — thinks that augmented reality developers could learn from theme park experience design.
“Experience designers at The Walt Disney Company know that when you are building a world, you have to build a sanctuary for people,” she says. “You have to build in rest, you have to build in a space where people can breathe for a second.”