Analysis of present and future trends for AR (Augmented Reality), with emphasis on impact on markets and society. Presentation held during ASP Winter School.

1. Winter School
2017
Daniela Nossa Díaz
Nicolò Bonacina
Mahsa Bohlooli Zamani
Edoardo Marcandelli
Daniele Ramirez
Davide Renda
Martina Rontini
Marina Berardi (Leader)
Marco Boretto
Stefano Gabetti
Melissa Latella
THEIA

2. Is a merging of virtual world with real environment that
provides users with completely new technological
experiences
TITOLO
AUGMENTED
REALITY

3. REALITY
AUGMENTED
A Universe of Opportunities

4. HOW DID WE
GET TO AR?
TITOLO

5. PAST
THEIA
1886
Augmented Reality in literature
(i.e., Eva Futura of Villiers de
l’Isle-Adam)
1968
Sutherland built the first head-mounted
three dimensional display

6. WHERE ARE
WE NOW?
TITOLO

7. PRESENT
THEIA
2016
The Pokemon-Go phenomenon
2009
First use for advertisement (i.e.,Toyota,
Lego) and development of first apps
for smartphone

8. THEIA
Who are the main actors?
How are they involved in the innovation process?
Basic Research
Potential
Market
Distribute
and
market
Redesign
and
produce
Detailed
design
and test
Invent
and
produce
analytic
design
Scientific Knowledge
Universities
Public research centers
Incumbent enterprises
Start-ups
APPLIED RESEARCH PRODUCT DEVELOPMENT
Chain-link model
Stephen J. Kline, 1985

9. BASIC RESEARCH
THEIA
Sensorial InterfaceVirtual Object Real Environment
Both to generate virtual inputs and to
process information from the environment
(e.g.: pose estimation algorithms) in
real-time.
Produce accurate sensors
(microphones, gyroscopes,
accelerometers, cameras) and
displays
Understand how the brain works in
order to provide the most immersive
experience
COMPUTER SCIENCE HW DEVELOPMENT NEUROSCIENCE
Basic Research
Potential
Market
Distribute
and
market
Redesign
and
produce
Detailed
design
and test
Invent
and
produce
analytic
design
Scientific Knowledge

10. LEADING ACTORS
THEIA
Research field: AR systems in presence of spatial uncertainty
Research field: 3D-objects tracking, pose estimation
Research field: Medical application (AR training SW,
Augmented imaging systems)
Research field: Hybrid inertial and vision tracking for AR
Basic Research
Potential
Market
Distribute
and
market
Redesign
and
produce
Detailed
design
and test
Invent
and
produce
analytic
design
Scientific Knowledge

11. SCIENTIFIC
KNOWLEDGETHEIA
Private
Enterprises Universities
R&D Centers
Government
Public
Companies
INTELLECTUAL
PROPERTY
It plays a key role in connecting the main actors in the innovation process.
Basic Research
Potential
Market
Distribute
and
market
Redesign
and
produce
Detailed
design
and test
Invent
and
produce
analytic
design
Scientific Knowledge

12. INTELLECTUAL PROPERTY PROTECTION
THEIA
APPROACHES WHY?
Industrial secrecy No dominant model yet
No main competitor yet
Collaborative community
“The better everyone does, the
better everyone does”
Knowledge Learning Curve
Lock-in of customers High cost in shifting to AR
technology during the early
phase
New inventions
Distinctive identification of
Software
Original creative Software
PatentsIntellectual
Property Rights
Trade marks
Copyright
No dominant design yetRegistered Design Currently used

13. APPLIED RESEARCH
THEIA
MIT's New Media Lab, USA
Hololens in collaboration with
Microsoft
University of Canterbury,
New Zealand
Holoplanets
University of Tokyo, Japan
Telexistence enabling virtual human
ubiquity
UNIVERSITIES
Basic Research
Potential
Market
Distribute
and
market
Redesign
and
produce
Detailed
design
and test
Invent
and
produce
analytic
design
Scientific Knowledge

14. APPLIED RESEARCH
THEIA
Basic Research
Potential
Market
Distribute
and
market
Redesign
and
produce
Detailed
design
and test
Invent
and
produce
analytic
design
Scientific Knowledge
and
Google glasses
3D hand tracking, 6 DOF head
position tracking and monitoring.
Smart glasses for industrial
applications
SDKs, cloud services and coding
support for AG applications.
IT software integration for
companies in the AG field.
ENTERPRISES

15. VOICEOFCOSTUMEREXPLOITATION
ARuserevaluationthroughuser-basedexperiments(GabbardandSwan)THEIA
_VirtualEnvironmentjournalsandconferences
i.e.,IEEEconferencessuchas2017willbeheldinLos
Angeles,CaliforniaonMarch18-22,2017
_Human Factors in Computing Systems (CHI, computer human interation)
conference
i.e.,WorkshoponAmplificationandAugmentationofHuman
PerceptionandSIGGRAPH
_CommentsmadebyusersofspecificobservedARsystems
i.e.,WorldWideWebsearchesforAR
_ExperiencesusingARsystems
i.e.,PokémonGo,Virtualtryon,etc.

16. PRODUCT
DEVELOPMENTTHEIA
Educational and
Entertainment
User Friendly Network information Portable/wearable Real Interaction
Wearable
Virtual try on
Real time information
Social interaction Accessable data
Simple training
Geolocalization
Geolocalization
Reliable data
Real time information
Fast flow of information
Real time information
Accessible modelling
design
CUSTOMERS’ REQUIREMENTS
E-Commerce Scientific
Research
Army
Applications
Industrial
Applications
Basic Research
Potential
Market
Distribute
and
market
Redesign
and
produce
Detailed
design
and test
Invent
and
produce
analytic
design
Scientific Knowledge

17. THEIA
RESPONSES TO
CUSTOMER NEEDS
Eyeglasses
Contactlenses
Opticalprojectionsystems
Touchandspeechrecognition
Softwaredevelopmentkits(SDK)
ARMarkupLanguage(ARML)
SpatialAR
GPS
View of historic sites (i.e. High Street Stories App)
View of not yet existing sights (i.e. large scale construction in-situ projects)
Head-mounted displays for digitalization of real movements in a virtual
space (i.e. Microsoft console “kinect”)
Use of smartglasses for training doctors
Cancer surgeon using a virtual reality camera (2016, Royal London Hospital)
Heads-up-on-the-move technology (mapping of soldier’s field of vision, ARC4)
Manteinance and customer service activities (i.e. Mitsubishi electric’s meView)
Virtual fitting rooms to make virtual try-on (BY TryLive brand, Acep TryLive)
Phonebook catalogues for mobile strategies (IKEA’s AR app)

18. THEIA
APPLICATIONINCOMMERCE:IKEA’sARApp
Phonebookcatalogueasmobilestrategy
Value for the CUSTOMERS
Enjoying the in-store shopping
Convenience of the online environment
Value for the BUSINESS
Stock cost savings
Employees’ time savings
Reduced risk of products being damaged

19. AUGMENTED REALITY IMPACTS
References
THEIA Positive impacts Negative impacts
_ Less cell phone, get our hands back
_ Improve the quality of life
_ Communication will be challenging and rewarding, more
effective, productive, and enjoyable
_ Improvement and expanding the educational system
_ Experience a reality that is based on personal needs and
desires
_ Expand the abilities of retailers
_ Explosion of the marketing and advertising
_ Navigate without taking their eyes off the road
_ Huge impact is the medical field (Reducing the chances of
medical problems arising after surgery is performed)
_ Allows to go beyond physical boundaries (more than tradi-
tional social media)
_ Potential in socials skills training for people with autistic
spectrum disorders
_ Find a common ground across differences in age, culture,
and linguistic orientation
_ Malware attack by cyber criminals that are looking to capitalize
on new technology
_ Development of scams that will victimize the innocent users
_ Psychological impact (virtual vs reality)
_ We’ll be annoyed by constant advertisement
_ Provoke laziness and decrease the interpersonal relationships
which is inescapable aspect of social life in the formation and
maintenance of real life (Biocca and Levy 1995)
_ Privacy easily Breached
_ Huge impact on the young minds of teenagers who are already
susceptible to rapid changes in behavior and beliefs
_ Effects that augmented reality can cause on the brain as well as
physical effects; especially in teens and children, whose brains are
still developing
_ Separates more the haves from the have-nots
_ Could lead to low self-esteem, feelings of worthlessness and in-
significance, even self-destructive acts (Cartwright 1994)

20. MAIN PROBLEMS TO OVERCOME
THEIA
FRAGMENTATION OF THE ECOSYSTEM:
Many variation in hardware, operating system and coding
LACK OF STANDARDS:
Standards in the data transmission, connection and algo-
rithms and modularity in components
TECHNICAL BARRIERS:
Large field of view lenses, advance 3D real time rendering,
tracking and -display and user-objetcs interaction
FINANCIAL BARRIERS:
Cost of device and computer hardware
CULTURAL BARRIERS:
Social and privacy issues related to tracking a always-on
mass device
OPERATIONAL RISKS:
Challenge of introducing new hardware in a not mature
market and securing data on the devices.

21. IMPACTS ON EMPLOYMENT
THEIA
Creating a more linked
work environment
(cooperation between workers and
workers-employers)
Changes in the employer-employee relationship Changes in the need of employees
Test candidates
Faster and cheaper
training
Trying new equipments
without risks
Training to emergency
situation protocol

22. LEGAL ISSUES
THEIA
Laws are not clear about AR legal issues
Technology move faster than legislative processes
Commerce of personal data
Privacy
i.e., placing a virtual characters
in a private propriety
Private property
Difficulty in deciding who
is the owner of an idea
Intellectual property rights
Consequences of using
wrong data sets
Data quality and
reliability of technologies i.e., unfair competition
Improper

23. NEW MARKET
GROWTH
TITOLO

24. AR GRANTED PATENTS in 2016
THEIA
Analysis based on a field of 1229 patents
Data extracted from www.patentinspiration.com
Northern America
497
Europe
138
Israel
4
China, Hong Kong, Taiwan
353
Japan, South Korea
220
Australia
17

25. LEADINGCOMPANIES
THEIA

26. AR SOFTWARE PATENTS OVER TIME
Patent inspiration analisys
THEIA
40
35
30
25
20
15
10
5
0
1999
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2001
Growing trend of the acquirement from 2012 until now
OVERALL

27. AR SOFTWARE PATENTS OVER TIME
THEIA BY APPLICATION CATEGORIES
Two dominant patented products: Manipulating 3D models for
computer graphics and input arrangements for transferring data.
15
10
5

28. Performance/costs
Sales
Number of firms
Role of innovation
t
t
t
t
Abernathy-Utterback Model
High rate of innovation and large range of technical solutions
i.e. Support of depth-sensing cameras
Markerless AR
Thermal touch
Sensor fusion
2017
Immature technology, high costs and prices
i.e. Google Glasses - 1.800 $
SDK Basic - 3.000 $
SDK Pro - 5.500 $
Current sales releted only to innovators
AR worldwide revenues in 2016: 5.200.000.000 $
AR worldwide revenue forecasts for 2020: 162.000.000.000 $
(International Data Corporation)
High and keeps growing number of firms
NOT A DOMINANT
DESIGN YET!
FLUID PHASE
THEIA

29. Performance / costs
t
2017
In the current scenario
incumbent companies may
be overcome by incoming
ones in a few years.
Incoming companies in AR
The definition of a new
technological paradigm
disruptes traditional
technologies like computers
and mobile devices that have
reached their saturation
phase.
Incumbent companies
in mobile devices
DAVID vs GOLIATH
THEIA

30. CASE STUDY: Metaio
THEIA
2003
Foundation of Metaio in Munich,
Germany, grown out of an internal
project within Volkswagen
2014
Thermal Touch: infrared
technology to turn any surface into
an interactive experience
2005
Release of the first end-consumer AR
application called KPS Click & Design
2015
Acquired by Apple for 30
millions Euros
2010 to 2012
Presentation of the first commercial
2-D Markerless Feature tracking
application for print and television on
a consumer mobile device

31. STATE OF ART: Nowadays technology
THEIA
3D-Object Tracking
algorithm
Digitally rendered
object
Metaio Suite
iOS
application
RealEnvironment
V
irtualworld
Motion
Recognition
SDK
Metaio Creator
MEMS Sensors
Cloud Storage

32. FUTURE TREND: Improvements
THEIA
3D Object Tracking
algorithm
Digital Object
Motion
Recognition
Virtual Reality goggles
In-depth cameras
MEMS sensors
VirtualWorld
RealEnvironment
Metaio suites directly mounted
on portable devices

33. EMERGING STANDARDS
THEIA
D'fusion Studio:
Supported on Microsoft Windows, Mac OS X, Linux, Android and iOS. Markerless
recognition of 2D images and tracking of 3D objects. Supported on smartphones
and smart glasses.
Vuforia Augmented Reality SDK:
Supported on Android and iOS. Recognition of planar images, markers or 3D objects. API in
C++, Java, Objective-C and .NET languages and code can be written using XCode, Android
Studio and Unity. Supported on many VR Viewers and smart glasses.
Metaio:
Originally developed for iOS and Android. Markerless tracking. Supported on
smartphones.
Wikitude:
Developed for iOS and Android. Markerless and location-based tracking, HTML
augmentations. Plug-ins in C++, Java or Objective-C and can communicate with
JavaScript API. Supported on smartphones and smart glasses.

34. Performance / costs
t
20172015
Apple mobile technology
«Augmented reality is that big as the smartphone (...) the smartphone is for everyone. (...) AR is not a product
per se. (...) is a key software component that would enhance hardware rather than a device or product (...)»
Tim Cook
In 2015:
iPhone users 700.000.000
iPhone market share 37%
Metaio users 150.000
Bonding the new AR technology to its
established role in the market of smart
devices, Apple is likely going to
define the future technological
paradigm.
Based on the data from www.statista.com

35. WHERE CAN
WE GO?

36. THE FUTURE OF AR
THEIA
Combining AR to IoT, Big Data and wearable technologies
establishing a trustful relationship with our devices
providing only the informations we’re willing to give
it’s possible to create a new enriched experience of our reality.
«It’s not about being lost in our devices; it’s about technology receding into the background so that
we can engage in human moments»
Dr. Helen Papagiannis, AR Stories

37. CASE STUDY: Vuzix
THEIA
The company is engaged in the design, manufacture, marketing and sale of wearable display de-
vices. These devices are worn like eyeglasses, they are mainly: our wearable display products
are known commercially as Smart Glasses, Video iWear (Eyewear), head mounted displays or
HMDs. They are designed to work with mobile electronic devices, including cell phones, laptop
computers, tablets, and portable media players and gaming systems.
Vuzix’s aim is primarily the consumer markets for gaming and mobile video while many products
are also sold in the consumer, industrial, commercial, academic and medical markets.
SDK and software providers Customer enterprises

38. STRENGHTS
_49 patents and 43 additional patents pending and numerous IP
licenses in the Video Eyewear field;
_Competences in wireless technology innovation awards;
_Collaboration with Intel Corporation to accelerate the introduc-
tion of the next generation of Vuzix fashion-based wearable dis-
play products for the consumer marketplace;
_Key technologies including ultra-thin waveguide optics
co-developed under license with Nokia, which will form
the basis for many of our future products.
WEAKNESSES
_Negative Net Profit (in general due to low sales and high R&D);
_Difficulties in financing activities because of the negative Net
Profit.
OPPORTUNITIES
_Significant Market Opportunity Across Multiple
Enterprise Applications (i.e., Industrial Warehousing,
Utilities & Power Pharma / Life);
_Chance to substitute mobile devices;
_Ecosystem of companies through the world;
_Growing demand;
_Growing economy.
THREATS
_Competitive market;
_Emergent different standards;
_Lack of complementary assets (computing power).
THEIA
CASE STUDY: Vuzix SWOT Analysis

39. THEIA
CASE STUDY: Vuzix conclusion (I)
Analyzing Vuzix revenues from 2011 to 2016 it is noticeable that
they decrease by 56%. Moreover, the Net Profit of the company is
characterized by a negative value and fluctuating trend. Indeed,
the average loss is about $9 million with a peak value of $19 mi-
llion in 2016. However, R&D investments register an exponential
increasing trend. As a consequence, the Return On Investments is
declining over the five years of the analysis. Despite these trends,
Intel has been investing in Vuzix from several years considering
the high intellectual value of the company due to numerous pa-
tents.
Based on the data from www.vuzix.com

40. THEIA
CASE STUDY: Vuzix conclusion (II)
In addition, Juniper Research predicts that the market for wearable computing and personal display
hardware will exceed $53 billion in 3 years. Assuming that Vuzix captures just 2% of this market, it would
mean more than $1 billion in sales (2% share is not much for a market leader with all the patents).
Nonetheless, a standard valuation for a tech stock would be 3x sales, which implies a $3 billion valuation, a
$150+ share price, and a +1875% return.
Based on the data from NASDAQ

41. THEIA
BUSINESS MODEL CANVAS - Current

42. BUSINESS MODEL CANVAS - Future
THEIA

43. THEIA
SOFTWAREHOUSEvsDEVICEPRODUCER
_Medium-low starting capital
_High availability of skilled software developers
_Growing market
_Higher flexibility thanks to sharing of the same
know-how among VR and AR
_Unaffected by standard wars due to ease of
adaptation of the product
Less risky in terms of investment but medium to
low net returns.
_High starting capital
_Low availability of skilled workforce caused by
the unexplored nature of the market
_Growing market
_Low flexibility of manufacturing and expensive
tooling machinery
_Risky due to standard wars and the possibility
of failure in the case of the emergence of a
different prominent product (i.e. Google
glasses)
More risky in terms of investment, however,
higher net returns in case of success (results
based on future market prediction study).

44. REFERENCES
THEIA
Dhiraj Amin, Sharvari Govilkar, “Comparative study of augmented reality SDK’s” - Department of Computer
Engineering, University of Mumbai, PIIT, New Panvel, India
Ronald Azuma, et al. "Recent advances in augmented reality" Computer Graphics and Applications, IEEE
21.6 (2001): 34-47
Mark Billinghurst, Andreas Dünser, Raphaël Grasset, "A Survey of Evaluation Techniques Used in
Augmented Reality Studies" - University of Canterbury, 2008
Marco Cantamessa, Francesca Montagna, “Management of innovation and product development:
integrating business and technological perspective” - Springer-Verlag London LDD, 2016
Stefan Hen, Ann-Kathrin Hörster, Alexander Karollus "Augmented reality Specialised applications are the
key to this fast-growing market for Germany "- Detusche Banck Research Management
Ivan E. Sutherland, “A head-mounted three dimensional display”- University of Utah
https://app.patentinspiration.com
http://augmentedtomorrow.com/
http://www.marxentlabs.com/blog/
http://thearea.org/area-blog/
http://www.govtech.com/
http://www.indexarsolutions.com
http://www.ptc-italia.com
http://www.metaio.com/