Augmented reality mobile apps to generate $300m revenue in 2013: Report

by Derata, 8th November 2012

Augmented reality (AR) is an increasingly popular technology for smartphone apps. They will generate $300 million in revenues globally in 2013. But there are still many problems.


Augmented reality is a technology that has been around a few years now. It differs from the better known virtual reality in that it does not attempt to replace or simulate reality, but rather enhances it by adding information ? such as displaying prices when you look at a product, or spatial information in mobile situations.

AR is increasingly being deployed in prototype wearable devices, with Google Glass the most high-profile innovation. It is a technology ideally suited to smartphone apps. A new report from Juniper Research says retailers increasingly keen to deploy AR capabilities within their apps and marketing materials.

The report says many retailers now perceive AR as a key means of increasing engagement with consumers, both as a means of providing additional product information or in the form of branded virtual games and activities. But there are many barriers to growth.

Lack of consumer awareness of the technology remains a key hurdle, as are the technological limitations of AR-enablers such as the phone camera, GPS, digital compasses. These limitations mean that in many case the AR experience is failing to live up to consumer expectations.

The report says that even some higher-end smartphone cameras lack sufficient sensitivity to trigger an AR experience unless light conditions were optimal. Furthermore, the need to recalibrate digital compasses ? allied to poor GPS functionality, particularly indoors ? means that under certain circumstances the level of location accuracy is not be sufficient for many potential corporate applications. As a result, the report states that enterprise adoption would be limited in the medium term.

The traditional pay-per-download payment model will continue to account for the largest share of AR revenues in the medium term, says Juniper, but the scale of retailer engagement means that AR advertising expenditure will increase substantially in the next few years.

The report says that more than 2.5 billion AR apps will be downloaded to smartphones and tablets each year to 2017, with games accounting for the largest share of downloads.

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