ARKit and ARCore are leaving VR in the rearview mirror

AR/VR has become a two speed market, with mobile AR set to have over twice the number of users at launch in 2017 than the entire AR/VR headset market by 2021. Apple ARKit, Google ARCore, and Facebook’s Camera Effects Platform could have 900 million users by the end of 2018, with their launch changing the trajectory of the whole market. Digi-Capital has fundamentally revised the AR/VR market thesis, analysis and forecasts in its Augmented/Virtual Reality Report, Augmented Reality Report and Virtual Reality Report:

1. Mobile AR dominates AR/VR for the foreseeable future;
2. Smartglasses remain the long-term future of AR/VR, but could take into the next decade to become a mass-consumer market;
3. VR’s market potential has been diminished by the emergence of mobile AR as a rival platform;
4. Premium VR might not accelerate until second-generation standalone (neither PC nor mobile tethered) VR headsets emerge in 2019/2020; and
5. Mobile VR’s potential has been reduced due to phone makers and developers pivoting towards mobile AR.

The combined impact is a significant upgrade for AR and a material downgrade for VR. This completely replaces all previous forecasts.