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Mobile augmented reality apps to top $2 billion by 2015

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Augmented reality has the potential to change how people interact and experience their surrounding environment. By combining the technology with the mobility and computing power of sophisticated smartphones, augmented reality will impact almost every industry, particularly retail, entertainment, travel and advertising. In a recently published report, research firm ARCchart forecasts that revenues generated from mobile phone augmented reality applications will reach US $2.2 billion by 2015.

Augmented reality is the experience created when content from the virtual world is overlaid on top of the live video feed of the surrounding environment, captured by the phone's camera. The technology leverages the handset's location and inertia sensors (GPS, compass, accelerometer etc.) to determine the device's position and marries this with relevant virtual content supplied by backend information servers in conjunction with search, advertising and image recognition engines.

However, there is a word of caution. Before full augmented reality can be achieved, several technical hurdles must be overcome. "The availability of standardised visual content will be a significant hurdle in providing robust AR experiences" explains Peter Crocker, the report's lead analyst. "Computer vision, which involves object recognition and the accurate anchoring of content, must also be improved to support real time processing."

While the value of the augmented reality application market is presently small, ARCchart expects it to grow quickly, becoming a billion dollar market within the next four years. ­Revenues generated from mobile phone augmented reality apps are forecast to reach $2.2 billion by 2015. As the market matures, many categories of mobile applications will incorporate augmented reality features, particularly travel, retail and points of interest applications. Other applications will emerge which implement AR as a core function, such as augmented reality games.

The number of these devices capable of supporting an augmented reality experience will ramp significantly over the coming years, spurred on by the aggressive competition amongst smartphone OEMs which is forcing components such as gyroscopes and powerful CPUs to become increasingly standard features on these devices. By 2015, ARCchart expect a total installed base of over 1.6 billion AR- enabled phones will be present in the market.

Currently, the augmented reality market is dominated by small start-ups with talented developer teams who are driving innovation. As the market picks-up, ARCchart expects the established industry players to increase their involvement. We have identified five service areas - search, advertising, image recognition, mapping and 3-D world views - which are essential for a complete AR solution and where large players can exert a stronghold. Companies active in several of these areas, like Google, Microsoft and Nokia, who also control their own smartphone platform and developer tools, will be well-positioned to dominate the space.

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