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AR Business World #2

(NOTE: Welcome to AR Business World. I published the first issue on June 4. While it was warmly received, the name was already taken. AR Business World is actually more suitable. This will be a digest of the most relevant business news related to Mixed Reality technology. Many of the items will be linked to AR/VR news published elsewhere with brief commentary from me on why I think it is useful or interesting.

My goal is to publish at least 40 times annually. You can read it here, or you can subscribe to receive it via email.

I look to you, my currently small crowd, for new leads that you think will be useful or interesting to business readers. I love case studies and trends. I will rarely cover gamer news. While I will pay some attention to enterprise and business-to-business news, my main focus will be on consumer-facing categories, particularly Entertainment, Education & Training, Health & Healthcare, Retail, Real Estate and Communications.

If you are first to send me a link on a topic I write about, I will give you a free PDF or Kindle version of The Fourth Transformation, my book with Robert Scoble, my co-author and business partner. Our book inspired Robert and I to start Transformation Group, and this newsletter --so that we can help big brands understand Mixed Reality technologies and how to use them in go-forward strategies.

Please send me ideas and suggestions as a comment here, in email or at Facebook Messenger where I am shelisrael.)

The Instant New AR World Leader

In the 10 days since my previous newsletter, a good deal has happened related to the business of AR/VR, but the biggest news, without doubt, took place on June 5, at Apple's Worldwide Developer Conference 2017. In fact, the event produced the most important AR news story ever.

While the company made multiple announcements related to immersive technology, the silver bullet was delivered in the form of a development platform called ARKit. Outside the tech community that name may be little noted and soon forgotten, but what most of the world's best app developers will do with it, promises to change all the categories I cover here. In fact, it will cover a whole lot beyond that.

Available in a few months, when  iOS 11 comes out, it will allow sophisticated AR that blends virtual objects into a user's real-world surroundings. This is real, world-changing AR, relegating Pokemon to its rightful place as a puny little runt. It supports all the development engines being used by game and movie makers with motion tracking and 3D scaling. 

But the really big deal is that in the first week that iOS becomes available, hundreds of millions of iPhone and iPad users will have AR capability in their existing devices. I'm sure that there will be an exciting sampling of apps released simultaneously, and that these will whet the AR appetites of many more consumers than is the case today.

In my view, this is huge. It is the event that heralds this new transformation, just like the iPhone is remembered today for starting the previous mobile transformation. There were smartphones before the iPhone, but the world has little noted nor remembered them.

From where I sit, it is a flex point for major brands. As a consultant in this area, I've talked with representatives from many companies you have heard of. They all express interest and enthusiasm for Mixed Reality technologies, but they have no sense of urgency. These are frugal and conservative times for top brand innovators and AR/VR seems far off in the future.

I think they are about to see that the future is sooner than they think. When iOS 11 comes out, younger customers will want AR experiences with brands online and in-stores. Employees will want to use the new software to experiment and innovate. The brands who hesitate will find existing and entrepreneurial competitors heading them off, particularly with younger customers.

By very definition, any disruptive period means that companies that could not get displaced, get displaced, such as JCPenny or Sears. While unknown, but feisty little startups, grow up to become Google, Amazon or Facebook. 

As significant as the Apple's AR foray may be, I can almost hear the ghost of Steve Jobs, echoing what I am told he said when he examined the first iPhone: "Well, it's a start."

ARKit is indeed a very big start. It gives Apple a powerful market position, but it faces fierce competition from many worthy opponents including the other three members of the Fearsome Foursome of personal digital technology. In April, Mark Zuckerberg proclaimed Facebook to be a "social AR platform." I expect that we will be hearing similar proclamations from Google and Microsoft in the coming months, not to mention the swelling pack of global players such as Samsung, Sony, ACUS, Acer, Dell, HP and so on. Then there are new players such as Meta, one of my personal favorites, and Magic Leap, a company that must act soon or be forgotten, from where I sit. 

I believe Apple has just started. I would not be surprised if in September the company also announces a headset that works with the new iPhone 8. Perhaps that headset won't be available until 2018, but in any case the future is sooner than some players in categories such as entertainment, health, training and education, retail, real estate, communications and travel may realize.

Houzz Rules

Elsewhere in the news, there were increasingly bullish predictions for VR or AR, usually with the year 2021 being the ROI year. For example, PwC predicted that VR would grow in the next 3.5 years to a $5 billion industry in just the U.S., growing at a rate of 64 percent annually. It will generate almost half as much movie industry revenue as the box office, which PwC says will grow at a minuscule 1.2 percent in the same period. Using entirely different reference points, CNBC reported on how Disney is leading entertainment giants into both VR and AR calling it "the next big thing in entertainment."

Investors see an even bigger picture. According to Inc. Magazine, money is pouring into AR and VR projects ranging from commercial real estate to science labs.

I found at least 15 new commercial applications since my last newsletter on June 4. Perhaps the biggest comes from Houzz, the online home design site that I spotlighted in my previous book Lethal Generosity because it created a mobile marketplace for cool stuff in the home. Now they have augmented that with View in My Room 3D, a mobile app that allows customers to preview over 300,000 furniture and décor products from the Houzz Shop before deciding to buy. I am certain that this makes Houzz the new world's leader in AR retail offerings--at least for now.

Until, now my retail favorites have been Lowe's, whose Holodeck affords a better way to remodel kitchens and bathrooms, and Ikea, who uses AR to let shoppers see how a new couch might look in their old living rooms. But Houzz beats them both, in my view, because you don't even need to go into the store. Online and in-store merchants are just now starting to embrace Mixed Reality technologies and I see a great more coming in a short period of time.

AR Spinal Surgery

When Robert and I started writing books in 2005, we were disappointed to find absolutely nothing to say about digital technology helping patients in treatments or providers in health administration. This was a time when patients had to carry medical records in manila folders from one office to another, so that doctors could share information. By the time of our most recent book, there was a lot to talk about. We were particularly enamored by Case Western's use of Microsoft Hololens to let anatomy students dissect in AR rather than on corpses from the school freezer. Since then, AR has moved into the operating room where Mashable reported this week on the first AR spinal surgery.

AR continues to modernize and improve many aspects of health. Apple announced the next Apple Watch will have continuous glucose monitoring, a relief to diabetics like me who have to jab their fingers several times daily. VR is being used to take the tedium of home exercise into a new dimension, where you can row, run, stair climb or ski while travelling anywhere on earth and beyond with VR headsets. CNBC reported this week on a guy who lost 50 pounds using VR on an exercise bike.

VR's education and entertainment experiences continue to amaze me. The San Jose Mercury reported on an exhibit at the Tech Museum of Innovation that lets humans feel the wind in their faces as they flap their arms as if they were wings over the rooftops of Manhattan in a VR exhibit that has visitors laying on their bellies.

Getting Into The Act

It comes as little surprise that marketing and advertising is starting to move toward AR and VR in a big way. Groove Jones, a Transformation Group partner that has done  marketing activation for the likes of McDonalds, Comcast and Samsung, is just one of many hot innovation studios. Venice, California is enjoying a Renaissance, spurred in part by entertainment industry creatives opening AR/VR studios. Even Horizon Media, a Manhattan-based media service agency, has launched a new AR/VR unit.

It's like Jimmy Durante, the bulb-nosed comedian of the 1950s used to say: "Everybody's Gettin' into the Act!"

San Francisco-headquartered Blippar, another early player covered in The Fourth Transformation, announced this week AR Banner ads that they promise will deepen customer engagement.

The Seedy Side

AR is of course playing a role in the seedier side of business, although often it is for the good of society. For example, the UK Daily Mail reported on police using VR headsets to assess the dangers to society that individual sex offenders pose prior to their release. Oracle this week demonstrated how slot machines could be repaired faster using Oracle Cloud and AR headsets.

Pokemon on Trial

File this last update in the It-Had-to-Happen Department. A Wisconsin judge will be asked to decide if Milwaukee can charge the makers of Pokemon Go a license fee for allowing the augmented object to appear in public parks.  

Shel IsraelComment