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Augmented Reality and 5G

Podcast episode 48

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The age of Augmented Reality is getting closer, but before the explosion in demand for devices, services, and software, there must be a catalyst. Catherine Henry, SVP of Growth at MediaMonks tells our @hainsworthtv that 2 billion people will be using #AR within the next year. Will 5G be the “killer app”?

Below is a transcript of this conversation. Some parts have been edited for clarity.

Michael Hainsworth:The age of augmented reality is getting closer, but before we have an explosion in demand for devices, services, and software, there has to be a catalyst. Will it be a cheap headset that resembles our sunglasses from a popular consumer electronics company? Or will it be that must have killer app that drives us to buy those specs in the first place? For insight into the future of AR I spoke with Catherine Henry, the senior vice president of growth at Media Monks. She tells me 120 million people used AR last year, every month. And by 2022, that will be closer to two billion. They all can't be playing Pokemon Go, can they?

CH: No, in fact, it's not Pokemon Go. There are multiple different uses. And what people don't realize is how heavily it's being used today in industry. So there are a lot of different places where people aren't seeing the use cases for augmented reality, but if you think along the entire value chain of manufacturing, not only when standing still and installing say the doors on a vehicle that is done with great precision. And so a lot of people are wearing headsets to do those kinds of roles, but they're also using it in maintenance, facilities maintenance, and monitoring. And they're also using it for drafting new products and concepts and prototypes. And so we're seeing a lot of virtual and augmented reality being used in industry. We're also seeing it in education and healthcare. And so it's only small steps that really add up to a much bigger movement.

MH: Back in 2018, AR researcher and artist, Galit Ariel had told Futurithmic that within two years, we'd all be using AR every day. It's now three years after that. And it sounds to me like while consumer is a critical component to the growth of augmented reality, virtual reality and mixed reality, this really is an industry 4.0 conversation.

CH: I absolutely agree. I couldn't agree more. I think that this is the thing that people don't realize is that they're actually using augmented reality on a regular basis. So for example, every time people open up the Snap application, and I use a lot, and I can tell you, I used to often, even for my video events, because frankly I don't have a full professional lighting equipment system. And so it just really helps moderate the lighting. And it's a wonderful feature, but of course there are lots of other really fun features on the Snap camera application or the Snap app. And so what people don't realize is that's all augmented reality.

So it's not necessarily about gaming. People are using it today for when they want to envision furniture in their homes. We saw a real boom in the furniture industry market during the pandemic and people were using those apps pretty regularly, as well as the QR code to have a look at menus. So we're seeing these little increments in the consumer side, but absolutely it's happening in industry. And the main theme here is how 5G is unleashing the power for technology to talk and to communicate between different machines. And that's pretty exciting. The internet of things is now being afforded by this new technology. And so all of these things come together. It's like a concert that's when everyone's testing their instruments at the very beginning, and then the concert begins. And that's where we are right now.

MH:You also talk about the internet of imagination. What is that?

CH: Well, yes, I did write a rather thorough industry report on its now intelligence report on wearables. And it's all about the XR wearables that are the very newest ones in market today. And then the ones that we're expecting over the next year or two. And so I'm saying that it's a combination between 5G, XR, and the Internet of imagination, because we already have things. We have lots of things, but what I'm saying is once these things come together, what does that combination, that X factor that's then going to evolve the next use case? It's like the iPhone, once we had the iPhone, we had apps, but nobody envisioned that one day a stranger would come to your house, pick you up and take you to the airport without exchanging money. And somebody you barely know. Now who would ever imagine have imagined that. And it took a couple of years for us to have applications like that. And now many more. And I'm saying that now it's the Internet of imagination because we really don't know where this combination of technology and timing is going to bring us in three to five years. It's a very exciting time.

MH: Right, we build these tools and then we put them out into the world and we watch what people build with them.

CH: Exactly.

MH: You mentioned that the uptake that we've already seen in the augmented, virtual and mixed reality world, I wonder how much of that is the Oculus Quest 2, it's being cited as the first commercially successful virtual reality headset. What does that tell you about the future demand for VR, AR, or XR?

CH: Well, we're all very excited about the future demand for virtual reality. And I think that there was a very significant conversion during the pandemic. What I can say is that virtual and augmented reality are two different things. One could be said, virtual reality could be said is as a way to escape the existing world and to sort of immerse yourself in a story book world or in a game. And that's a really fun thing. Augmented reality is a way of enhancing your existing world and personalizing it to the things that you want to see and experience. And so these are two different ways of engaging with the world that we've never really had that opportunity to really leverage before and Facebook and companies like that are investing very heavily into bringing us into this new reality. In fact, just the other day, we saw the WWDC conference by Apple and they brought up one of their new initiatives was not only 3D mapping so that you can actually see where you're going as if you're walking through the space in real life.

And that's the beginning of the kinds of assets we're going to need for wearables, for glasses, augmented reality glasses. But we're also seeing a prototype with Project Aria. Facebook has already gotten beta, and that they're hoping to get out. If not later this year, then early next year, Facebook has already dominated the headset market for virtual reality and commands some 58 almost, well, 58.6% of the user market on Steam, which is the platform where everybody downloads a lot of their content. So, I mean, Facebook is really, really convinced that this is the next stage of social media, but also e-commerce, I call it v-commerce, virtual commerce, because so much of commerce and exchange is happening in real life, on these platforms and it's real money. So it's a very interesting space to watch.

MH: So then how do we resolve the chicken and egg problem and how do we get to that critical mass? Sure. A $300 headset for VR is a great entry point for the general public, but does the hardware come first or do we need to get a killer app first that leads everybody to jump onboard the bandwagon?

CH: It's funny, I'm not so sure about the killer app I've been watching really the signals from and trying to distinguish the signals from the noise. That's always my theme. I have training both as an economist and I have a masters in marketing, so these two separate disciplines, always thinking about trends and how these things start off with, again, building the use cases. Apple is building the use case where they're creating this beautiful rich ecosystem in which you're able to use your voice commands and same thing with Facebook, voice commands. And then also, so being able to navigate this space and then building the space and then suddenly you find it, then the hardware arrives in everything's all set up and that's kind of where we are. I'm not sure it's going to be a killer app or killer moment. It's going to be probably the introduction of something. And then we get to build the rest. I don't know that we're going to see it this year. I think realistically, it's going to be one or two years before it starts to be a more commonplace part of our lives. So having some sort of glass that connects with your phone or with your watch that is useful. I think we're looking at least a year, two years out.

MH: You've brought up a very interesting point about the headsets that we will be using in the not too distant future. So much of the computing power to be able to make augmented reality possible can't be put on frames of your headset. They're going to have to offload the heavy lifting of figuring out three dimensions, being able to occlude objects so that they appear behind you instead of hovering in front of you when they're supposed to, all of that's going to have to happen in the cloud. And it strikes me that 5G wireless is a critical component to overcoming that technical limitation of the eyeglasses.

CH: Exactly, exactly. And I think, again, we're getting lost sometimes in the consumer applications for virtual and augmented reality when actually it's a much bigger story, right? It's not a technological upgrade. That's not what we're talking about. I mean, 5G is, is essentially delivering a much bigger service for users. And so we need to offer those use cases that really demonstrate how that works. That it's much more than faster 4G. And so we really need to think about this as a network that is a platform that connects customers to the services that they need. And so, when we think about 5G, we need to think about if I think about telecoms and I think about network slicing. And I think about how those partnerships can be created for private instances, whether it's a big stadium or it's a big factory that's operating in a non-metro core area.

We need to think about how those types of places can be facilitated with 5G. And I think that's really important because these are the areas, as I said, manufacturing plants use VR and AR extensively in their operations and same thing with smart city, smart ports. And so there, we need to think about unleashing the Internet of things. And with this high broadband connectivity and the low latency, it really ignites the possibilities of all these things. It's like turning on the lights, suddenly everything can happen. So we're kind of waiting for that to happen. And there's a huge opportunity for the people who... The CSPs, who create those partnerships early.

MH: It's not just about being able to pump a ton of data at a high rate of speed. It's about that low latency that gives us the ability to process what the individual is looking at and then send back to them the necessary information to put it in front of their eyes at a speed and a latency level that is real time to them going from what 300 milliseconds down to one is a huge deal.

CH: Exactly. So, I mean, I always tell people that when we think about what you're talking about is effectively SLAM technology. And so that's a simultaneous localization and mapping, and it's a mouthful. Most people just call it SLAM. And you think about when you call an Uber for example, and you're standing there and you're going, where is it? Where is it? And the guy pulls up across the street and you can see him at a distance and you're waving at each other and thinking, how did that person not find me? Well, that's the challenge that we're facing now with glasses is that, not only does it have to find you, the signal has to find you, but it has to find you as you're moving through space. And at the same time, it has to offer you information that is somewhere near you that can be useful to you, whether it's a restaurant or a Starbucks, or, a parking space.

And so you can imagine how much more complicated that is if they want to deliver that in automotive, which is really kind of the holy grail right now. That's the big, I guess it could be one of the killer apps that you could do this simultaneously on your windshield. So interactive windshields is a big thing because that's going to open up an entire new market of people who aren't necessarily using Snap filters to understand the beauty and power of augmented reality. So it's glasses, it's interactive windshields, but again, getting that system, the SLAM, right, is really important. And that takes a lot of time. On the other hand, I'd also say the content is important. So uploading all this real world data into these headsets is going to take time. So there's a use case obviously for world mapping in virtual reality, but there's also one for the way in which we navigate in a real world as well.

MH:So then how can CSPs help mixed reality developers build their AR experiences while at the same time CSPs are building out their networks?

CH: That's a really good question because building up a network for CSP is a very expensive enterprise. And so for 5G monetization really requires strategies, business models, tactics, and partnerships to be put in place so that they can earn revenues from these infrastructure investments. The 5G infrastructure is obviously very expensive. And so what is the monetization strategy? Again, I would say that it's about, offering much more than faster 4G and thinking about how to partner with companies, with cities, with ports, et cetera, that are going to be able to use this in the short term. So really thinking more strategically because once those partnerships are in place, they're going to be long-term partnerships. And then after that, it's going to be very hard to provide a better service or to get anybody to switch over.

MH: This has been a recurring theme and Futurithmic, as we look at the rollout of 5G wireless globally, partnerships, the reality is CSPs were never built that way. In the beginning, they were these monolithic telecommunications companies that had exclusive control over their communities. And they were the ones who were making all the decisions that is a wholesale change. That's going to be required to be able to build 5G in a fashion that provides not only the infrastructure necessary to create the next killer app and all of that, but also the relationships that have to be built, that those kinds of apps can be built in the first place.

CH: I totally agree. I mean, listen, it's all about network as a service. I would also say VR is a service, gaming as a service. Gaming and of course, an interactive immersive content is very, very lucrative. I think gaming, especially and e-sports are growing, there's lots of evidence it's growing exponentially, so that's an area, but I would say if I were a CSP, I wouldn't focus necessarily on the shiny stuff. Of course, it's really a lot of fun to show connectivity in the stadium or maybe in a holographic concert. Now, that's super exciting. And I think that's something we definitely want to cover because that kind of content is what people are expecting to download onto their mobile. So the opportunity to partner say with some of the big content providers is certainly a very lucrative, but also to look at some of the hardcore industrial use cases, I would definitely explore all of those.

MH: So, let's come back full circle to the point that while 5G wireless will be a contributing factor to the rise of augmented reality, the real killer app will likely take place within industry 4.0, as opposed to the consumer base. Let's talk a little bit more about some of those opportunities. You've mentioned multiple times ports, and we know that Nokia, for example, has a relationship with the port of Hamburg, where they've been actively working to try to roll out, not just 5G in an augmented reality world, but also 5G generally for all of their business practices, but what would be some of the augmented reality type of scenarios that would play out in that port environment? It's fascinating to me, the idea that you could put a pair of goggles or glasses on a dock worker who's trying to find one particular crate within an entire ship's worth and could easily be guided from point A to point B to get to that exact location, using those glasses in a way finding fashion, very similar to what we're accustomed to on our phones when we use GPS to get to grandma's house.

CH: Robotics is really a space where AR and AI combine to create greatness, I would say. And people often think about robotics. They think of some sort of end game where the robots take over, but actually the robots can be tremendously helpful to us in our daily lives in taking away a lot of the grunt work that we don't necessarily need to put human labor on. We can use them more to help control the volume of content that's being shipped from A to B rather than lifting and hauling it. And I think that's a good thing. I mean, there are a lot of great things to be said about the evolution of the way, the future of work with augmented reality and virtual reality and 5G unleashing this Internet of things. I'd like to think of these again, as a concert where suddenly everything comes together and the music starts and there's this at first it might be when they're testing their instruments, you think, "How is this ever going to come together?" But when they do it creates something magnificent.

MH: You mentioned a little earlier about an augmented reality windshield for a driver. And I think that brings up a very valid point that when we talk about augmented reality, the natural assumption is to talk about goggles, something you put on your head, or maybe it's your smartphone, and you're using the camera to point at the world and augment the real world, but there are so many more different means by which we can augment our reality. Samsung has patented an augmented reality contact lens. How soon before we start incorporating this kind of technology into our bodies instead of onto them?

CH: How soon before we can load up... Listen, I have always wanted to be able to load up a new language within five minutes, like they do in the Matrix and how cool would that be? Unlimited powers? And I think that's these are the kind of blue sky thinking that we absolutely should be thinking about how can we use these to enhance our capabilities as humans? All too often, we focus on the doomsday scenarios, but there are tremendous strides being made in say, simultaneous translation. That's my thing. I want to be able to talk to somebody in Mandarin without having to study for 30 years. So I just don't have the time, but wouldn't that be wonderful to be able to, to have this simultaneous translation in my ears, as I look at somebody with my glasses on, or my contact lenses. So there are a lot of applications that I think we'll get a lot closer to once we have these wearables that are kind of integrated in onto our bodies. Now, does that mean I want to chip planted, maybe not. I think I'll wait for that.

MH: Not a fan of the singularity are you?

CH: Well, I'm good with wearables maybe, maybe eventually the contact lenses we'll see.


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