Bob Dylan’s famous lyrics for “the times they are a-changin” are more apt today than ever. Not just with innovation and telecoms in general but when looking specifically at augmented reality (AR), which is an open and partly immersive experience that puts virtual things into users’ real worlds, and virtual reality (VR), a closed and fully immersive experience that puts users inside virtual worlds.
Applications for AR and VR are certainly changing the way people gather round and become more connected, wherever they roam, particularly with mobile roaming.
The term “AR” was first coined in the 1990s by Tom Caudell, a researcher for aircraft manufacturer Boeing, to describe a digital display viewed through a headset which guided workers through electrical wires in an aircraft. Since then it has been far more broadly applied to describer digital information overlaid in the physical world.
Social media is helping to boost connectivity and elevate AR’s popularity through social networks, such as Facebook, Instagram and Snapchat, an eMarketer report has found. Facebook and Instagram Stories allow users to add special effects to photos and videos and this AR offering is increasingly popular with consumers.
The market research firm said augmented reality monthly engagement in the US increased by 30% from 2016 to 2017. VR usage, driven by 360-degree videos on social networks, is also growing, but at a slower pace. eMarketer added that, by 2019, the number of augmented reality users is expected to top 54.4 million, or nearly one in five internet users.
5G is the key
AR and VR are pushing connectivity limits and 5G, which is expected to start being rolled out in 2018, is seen my many as the key to unlocking market opportunities. The success of these opportunities will depend on the reliability, low-latency and uniformity of the networks being able to handle the increasing speed and capacity requirements that AR and VR have.
At Mobile World Congress this year, virtual reality and 5G were two of the key themes, with Mark Zuckerberg telling delegates that VR will be one of the killer apps for 5G. Facebook has been leading the charge on making VR an everyday reality. Mark Zuckerberg’s brainchild started by buying Oculus over two years ago.
“The company then quickly moved to working in the background to make the technology sound. Using encoding techniques like pyramid geometry, Facebook has been able to reduce VR and 360-degree video file sizes by up to 80%,” said Mattias Fridström, chief evangelist of Telia Carrier.
Pyramid geometry breaks down the multitude of viewer angles seen from a VR headset and breaks down five different streams. This allows users to experience a fluid 360-degree video. The compression means it takes less space to store video in the cloud and stream to your device. However, compression is only half the battle. Facebook is now working to establish artificial intelligence that can provide the best possible stream for every use case.
VR needs extremely low latency so that the VR image responds immediately as you move your head. How low? One millisecond is the target. That’s also a must-have for autonomous vehicles, simply to ensure they don’t bang into one another or more vulnerable obstacles – such as people.
To support this impact, a capable connectivity backbone may be required. ABI Research recently published a whitepaper highlighting the expectations for AR and VR in the wake of 5G’s rollout, including: higher bandwidth needed to support video technology, particularly 360-degree applications. 5G New Radio will help to increase network speeds to tens of Gbps. Another report, by Digi-Capital, suggests that AR will eventually be worth four times as much as VR.
Digi-Capital believes that AR’s addressable market is similar to the smartphone market. So AR could have hundreds of millions of users, with hardware price points similar to tablets, which may drive large hardware revenues for device makers.
5G could not only help with improving applications, such as real-time VR but it could also help to preserve battery life and help latency issues related to VR headsets.
The worldwide AR and VR headset market is expected to grow at a compound annual rate of 58%, reaching 99.4 million units being shipped in 2021, according to data from the International Data Corporation (IDC) worldwide quarterly augmented and virtual reality headset tracker.
“2016 marked an important step for the AR and VR headset market with product finally arriving in end users’ hands and on their heads,” noted Ramon Llamas, research manager with IDC’s augmented and virtual reality team. “While there was clear demand coming primarily from technology enthusiasts, what became readily apparent were the use cases for enterprise users across multiple verticals and for consumers with gaming and content consumption. This sets the stage for the multiple aspects of the market that device makers, platforms and content providers, and developers will be addressing in the months and years to come.”
The US VR market formed 40% of the global market in Q1 2017, keeping its place as the largest market for VR in terms of volumes shipped worldwide. Sony PlayStation VR dominated the US market with just over 60% share. It capitalised on its installed base of gaming devices, as well as its lower-cost headsets.
Demand in the Japanese VR market meant that a total of 81,000 VR headsets were shipped in Japan. This was largely contributed by Sony, which conquered its home market with 90% market share. As a result, China dropped to third place in terms of volumes of VR units shipped in the first quarter of 2017. HTC continues to lead in China, with 15,000 Vive headsets shipped in Q1 2017, taking up a quarter of the market.
Sony experienced strong demand for its PlayStation VR in Japan, with the company still trying to fill demand gaps by shipping more units across the country. “Gaming and entertainment continue to be the key driver for VR headsets as gamers in Japan are showing strong affinity for VR gaming,” said Canalys research analyst Mo Jia.
A different gaming culture combined with the unwillingness to pay for content, including VR, has limited growth in the China consumer market this quarter. “HTC is trying to discover and promote new verticals as it deepens its relationship with local and governmental establishments,” said Canalys analyst Jason Low. China is poised to be the first country to widely introduce VR into private and public schools.
One of the most prominent aspects of AR for telecoms companies is the combination of live video with computer generated data and virtualisations, particularly for use in advertising.
For augmented reality to work on a mobile device it requires a camera, GPS and digital compass, broadband connectivity and an accelerometer, according to Juniper Research. Due to these limitations, AR only became practical after 2009 with the development of higher end mobile handsets.
With the advent of 5G telecom networks the processing, storage and latency constraints will be eased. Russian operator MTS is presently backing technology from Nokia to help deliver a range of operational improvements. The companies say they are planning to develop new products and services for retail and enterprise clients in the areas of the internet of things (IoT), cloud, digital medicine, e-commerce, AR and VR, and convergent 5G networks.
Valery Shorzhin, vice president of procurement and administration at MTS, said: “Our strategic cooperation with Nokia has reached a new level. I am sure that joint efforts of our companies will accelerate time-to-market for numerous innovative solutions which will be widely used in 5G networks.”
MegaFon has previously unveiled plans to deploy 5G technologies to support a number of use cases, including autonomous vehicles and virtual reality, at next year’s football World Cup.
Nokia is also working closely with KT, which already has a roadmap of 5G applications for the upcoming 2018 PyeongChang Olympic Games, including 360-degree VR, time-sliced video services and a fully automated bus service. The high throughput, low latency of 5G will enhance spectator experiences. There are also trials well underway with Orange and tennis, Verizon and Ericsson working together with motor racing. Ultimately, remote home viewers could transport themselves, via VR headsets, to the heart of the action in sports.
“A realistic virtual reality experience requires freedom of movement. Being connected to an external computer with cables handicaps a user’s natural movement. The future of virtual reality must “cut the VR cord” allowing the user to operate freely, immersed within the experience,” said Achin Bhowmik, vice president and general manager of the perceptual computing group at Intel.
The AR and VR industry represents new frontiers of innovation and is thirsty for the capabilities 5G promises. It is a profound change in the way cellular networks have traditionally been developed. While we expect 5G to enable many and unforeseen use cases, the enhanced capabilities of 5G are required for AR and VR to reach their full potential.