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AR Business World #3: Apple AR on Fire

 

(NOTE: This is my third newsletter on the business of Augmented and Virtual Reality. It focuses on news that is relevant to business thinkers in retail, real estate, marketing, education and training, healthcare, enterprise and other business categories outside of gaming. I plan to write 40 per year. To receive it by email, please enter your email in the subscription box below.)

Why ARKit will Transform Branding and Soon

Brilliant, diverse and widespread  ARKit applications have begun to appear online, where thousands of developers are showing examples of their earliest products built on the new developer kit.  Much of what I have seen so far dazzles me, and their applicability to consumer brands, healthcare, real estate, marketing, non-gamer entertainment such as pro sports, the enterprise, education and training and more seems clear to me.

I can't wait to see the software products that come out in September when Apple's new operating system goes live and the spiffy, new iPhone 8 becomes available.  

Talk about transformative, between iPhone owners expected to upgrade their phones to the new iOS 11.0 and the early adopters expected to queue up all night to get the new iPhone, most observers forecast that somewhere around a quarter billion people will be walking into your stores, stadiums, medical facilities, hotels and restaurants with AR-enabled devices in their pockets, purses and hands.

The big question is what will brands be doing about it and when. Soon, customers will want AR experiences, the same way they wanted to have mobile experiences or online conversations a few years back. The brands that responded fastest generally flourished, while those that resisted tech-driven changes to customer and employee cultures either died or became less viable.

Even Rush Limbaugh sees what we see.  This week he declared on the air to his millions of consumers that Apple AR is "awesome and not just for gamers." In fact, he sounded more than a little like Robert Scoble in his gushing enthusiasm. How often in history have Limbaugh and Scoble ever agreed on anything?

Trigger Point

We see Apple AR as a trigger point, in the same way the launch of the first iPhone was a trigger point. When you look back on how The Fourth Transformation reached business, you will look at what Apple did here and now. When we wonder how AR and VR finally burst out beyond the world of affluent gamers, the launch of Apple AR will be that time. 

Until now, most business decision makers we talk with have curiosity about AR and VR, but no sense of urgency. These are times of uncomfortable changes in many sectors. There are all sorts of technology changes related to Artificial Intelligence refinements: robots, autonomous cars, Bitcoin, Blockchain and brickless banks, digital conversational devices, and more. 

Until now, AR/VR has just been a beguiling member of this pack. We have been told by many decision makers, that they will wait-and-see. And we have understood. The promise of these Mixed Reality technologies has not been realized. The nascent AR/VR market has remained leaderless and fragmented--until now. Developers have been confused on what hardware to support--until now. Brand thinkers had very small expectations that shoppers would soon arrive looking for experience enhanced by AR--until now. There hasn't even been much incentive to spend time and limited budget on experimental AR brand pilot programs--until now.

A U-Turn for Developers

This fragmentation and leaderless state has also covered a passionate, growing and talented development community in something of a wet blanket. Until now, there was very little to do but build VR games. Some showed unique brilliance such as Job Simulator from Owlchemy (now part of Google), but mostly game developers have provided an abundance of ways to zap aliens. In that light, there has been an abundance of technical talent, who are now, I would assume, available and eager to use the same talents to enhance your customer experiences--and if it is not you looking for that talent, chances are your competitors will recruit them.

I say all this because just a few days after Apple announced ARKit, research came out announcing that AR/VR developers are planning to move from mobile games and entertainment into higher end platforms such as Hololens and HTC Vive over the next year. I am betting that many developers are now taking an abrupt U-turn back into mobile, specifically Apple mobile.

And the evidence is clear that they have done precisely that.  Just look at some of the jaw-dropping Apple AR apps that Robert and I have posted on our new Apple AR World Facebook Group that we started last week. Even better, go over to Twitter and check out @madeinARKit which  attracted over 22,000 followers in its first week. This is the best place we know to see what is being done in a very short period by some very talented people. We also like The Road to VR, because once Apple AR was announced, it turned off the VR road and jumped onto the Apple AR bandwagon. 

This past week we also saw one of the best mobile retail AR apps come out. Houzz, the mobile home design community, introduced an AR mode. We are certain it will have an Apple AR version on Day #1 of the iOS 11 release.

Opportunities expand soon and significantly for the AR creative studios that have been expanding like popcorn in a microwave in West Los Angeles and elsewhere. So far, these studios have been creating brilliant content for Hollywood movie makers who have not yet figured out how to use VR and AR with large audiences watching movies in neighborhood theaters. The same goes for marketers. creative agencies such as our partners Groove Jones who have created activation for such major brands as McDonald's, Nestle´ and Kaiser Permanente. Now the opportunities for brands turning to studios such as Groove Jones expand enormously as forward-thinking branding executives think of innovative ways to reach as many as 250 million new customers.

To be honest, this is not how we thought AR for business would explode. We had envisioned headsets that would be more affordable, mobile, fashionable and capable of letting people move things around in headsets with their eyes, allowing the hands to do something else. We still believe this is coming. We would not be surprised if Apple didn't release a headset of its own in the fall, probably one designed for inserting iPhones. 

But what ARKit does, in our view, is extend the life of the handset and delays the inevitable ascent of headsets. For now, we are sticking with our prediction from The Fourth Transformation that headsets will replace handsets at the center of our digital lives. Why? because once they become inexpensive and lightweight and attractive, people will want to use them because hands-free interfaces have clear advantages and because the eye moves faster than the hand. We enjoyed that CNBC this week joined Transformation Group in seeing the same future--just eight months later. I am not gloating so much as pointing out that the concept of glasses replacing phones is now reaching mainstream media like MSNBC.

But for the immediate future, the familiar handset, similar to the one that is currently at the center of digital life for most people, will drive the great migration into our Fourth Transformation: And for at least the next year, the primary driving force will be Apple.

Gunfire, Makeup and Tattoos

While this week, Robert and I continued our journey toward AR and away from VR. One reason was obviously ARKit, but it is also because so much of VR remains in games--an area that is not central to Robert and me. Like I said--there are just so many ways to zap an alien. Still, we continue to see nice VR apps that business readers may find useful, interesting and notable for their diversity.

For example, this week I learned that  New Jersey first responders were using VR to train for gunfire situations. I think that this is one of the great VR apps in a world where real life can be more dangerous than fictional aliens. This app seems very much to me like VR being used to train oil rig workers before they go out to sea, as we reported in our book. VR also increased its role in the hotly competitive consumer category of cosmetics. While Robert and I have written a few times about Sephora's Virtual Makeup Artist. This week they were joined by a similar approach to VR-generated makeup sampling in a Virtual Room at L'Oreal's new flagship store. Personally, I like the Sephora approach to letting shoppers at home see themselves in virtual makeup while staring at themselves on their mobile phones. 

Essentially we are on the side of the customer, so when two brands compete in VR for shopper attention, we love it. The competition will accelerate innovation and the innovation accelerates adoption creating what I call a Cycle of Win that is likely to spread to new apps in related consumer categories including clothing and accessories, or even tattoo fanciers who might want to see how an image will appear in some anatomical location before it becomes embedded there. 

VR in the Enterprise

VR and AR headsets continued to make headway in the enterprise this week. There are a few good reasons for this. First, unlike consumer products where the look, cost and capability of headsets is extremely important, an enterprise AR or VR headset can cost thousands of dollars, lack the six degrees of free movement and still be of vital importance when industrial VR/AR applications can save dozens of lives and millions of dollars.

For example, Business Insider had a useful report on how Lockheed Martin is using VR and AR to significantly decrease the error rate of integrating radar systems for navy ships. While, Boeing plans to cut engineer training time by 75% by using the Microsoft HoloLens to train engineers in recognizing and combining different pieces of equipment. This stuff is far less exciting than a good alien zapping, but saves time and money, two areas where I could stand some improvements myself

CastAR shuts down

Amid a week of bullish news for AR evangelists, I was sorry to see that CastAR, a headset-maker that used a magic wand to cast spells on users as their marketers might say, has shut down. The hardware maker started with some fanfare and favorable product reviews. I think it simply failed to carve a niche for itself in a crowded field of many big players. It also seemed to be slow to delivering products to market.

Magic Wallpaper

I see lots of products on some weeks and I have to admit that the features of them sometimes blur together. This week I found Magic Wallpaper, a product I absolutely love. It takes icons on AR wallpaper and brings them to live in a child's bedroom. It is a new and entirely charming way to tell bedtimes stories to a child using an AR app to bring parent and child closer together. Just click through and watch this video to understand.

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