Augmented Reality (AR) is witnessing rapid adoption due to the shift in consumer preferences and business needs. Almost every major sector including consumer, healthcare, retail, gaming, entertainment, construction and tourism are using the technology to interact between the real world and 3D virtual objects in real time.
Given the upbeat scenario, we believe the AR market has immense prospects which are attracting tech giants like Alphabet GOOGL, Facebook FB, Microsoft MSFT, and Apple AAPL.
These companies are making every effort to rapidly penetrate into the booming AR market, which is as per a report from Mordor Intelligence, is expected to witness a CAGR of 151.9% between 2019 and 2024.
Further, a Zion Market Research report shows that the global market for AR/VR is anticipated to reach $814.7 billion by 2025 at a CAGR of 63.01% over a period of 2019-2025.
Investment on AR Applications on the Rise
Growing proliferation of AR-based applications globally is inducing tech giants to invest in the space. Per the Mordor Intelligence report AR technology user base is anticipated to surpass 1 billion by 2020.
Additionally, Google, Microsoft and Snapchat-parent Snap are benefiting from rising demand for AR-based hardware devices such as AR glasses. We note that shipment of AR glasses is expected to reach 22.8 million by 2020.
Data from CitiBank displays that AR based hardware, commerce, communications and commercial/enterprise applications are anticipated to witness growth of 68%, 78%, 66% and 43%, respectively, over a period of 2020-2025.
Let’s delve deep on what the tech giants are up to in this booming space.
Alphabet’s launch of an advanced version of Google Glass called Google Glass Enterprise Edition 2 is noteworthy.
Notably, the glass, which is especially designed for businesses, runs on Android and is equipped with improved camera performance for first-person video streaming and collaboration. The new Google Glass is capable of aiding businesses in improving work efficiency by allowing them to provide employees with hands-free access to visual information.
Apart from the AR glass, the search giant is reportedly testing five AR effects within the camera of its messaging app. Further, Google is striving to enhance search results with new AR features which enable users to view and interact with 3D objects right from Search and place them directly into their own space.
Currently, Google parent Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alphabet Inc. Revenue (TTM)
Alphabet Inc. revenue-ttm | Alphabet Inc. Quote
Microsoft is also gaining steam in the market with the expanding portfolio of AR glasses which comprises HoloLens and HoloLens 2.
Notably, HoloLens 2, which is based on mixed-reality (MR), was launched in the beginning of this year with special focus on enterprise use. The company is winning clientele on the back of both the AR glasses. Recently, Airbus deployed the HoloLens devices and is working with Microsoft to create HoloLens 2 applications.
Further, Microsoft, which carries a Zacks Rank #2 (Buy), has secured contract from the U.S. Army and the U.S. Department of Defense for its AR capabilities.
Microsoft Corporation Revenue (TTM)
Microsoft Corporation revenue-ttm | Microsoft Corporation Quote
Facebook is benefiting from its AR initiatives on Messenger and Instagram applications. AR camera effects on Messenger helps brands to gain traction across customers by enabling them to “try on” merchandise and check on new products.
Further, its AR Studio on Instagram enables users to create new face masks and AR world effects. Additionally, AR-based ads on Facebook’s platform are driving the ad revenues. The stock has a Zacks Rank #3.
Facebook, Inc. Revenue (TTM)
Facebook, Inc. revenue-ttm | Facebook, Inc. Quote
Apple is also leaving no stone unturned to reap benefits from the potential AR market. This Zacks Rank #3 stock recently introduced a collection of AR tools comprised of ARKit 3, RealityKit, and Reality Composer.
Notably, ARKit 3 features automatic real-time occlusion of people viewed by the host device’s camera and real-time motion capture with camera. The other two tools aid in blending and building virtual objects and interactive scenes with the real world environment.
Apart from this, the iPhone maker is also gearing up to launch its own AR glasses.
Apple Inc. Revenue (TTM)
Apple Inc. revenue-ttm | Apple Inc. Quote
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