AR/VR investments declined during 2019

Each year seems to be the year for virtual and augmented reality, but analyst firm Digi-Capital is now reporting investments have declined below the levels reported in 2017 and 2018.

Although it is still too early for the VR and AR neigh sayers to strut around too pompously, it is not the most encouraging of signs. The issue seems to be investments made in the continuously embryonic segment made in the final three months of the year.

The levels of investment in 2019 were still the third largest annual sum to date, though it was 35% lower compared to 2018, down to $4.1 billion. Digi-Capital has been measuring the success of the segment in terms of deal volume (number of deals) and deal value (dollars invested).

“While there could be an uptick in AR/VR M&A activity if a market inflection point happens in coming years, there isn’t an obvious catalyst for large-scale M&A in the short term,” the firm said in a blog post.

The prospects of virtual and augmented reality are worth keeping an eye on, as there is always a chance of a revolutionary impact on areas such as gaming, entertainment, training or video conferencing, but once again the segment is failing to live up to the promise. Q4 was the problem period for the segment, a single quarter, which does offer a glimmer of hope.

The biggest deal attributed to this sector over the course of 2019 was attributed to Snap, with the firm aiming to raise $1 billion in convertible senior notes. The funds were lined up to be used for working capital, operating expenses and capital expenditures, as well as potentially repurchasing common stock and for acquisitions.

Interestingly enough, a slow-down in the investment category of this segment could see a dramatic shift in the way it functions. Should investments continue to drop, start-ups might need to focus on revenue generation and managing burn rates. Without seed money and continued investments, the quality of products might suffer as firms are forced into go-to market strategies sooner than anticipated.

However, you have to remember this is only a short period of time and not necessarily a death sentence to the segment. Perhaps this is a bit of credibility for those who have been less than enthused by VR and AR for some time, you correspondent being one of them.

China Telecom celebrates the state surveillance potential of 5G

A new ad campaign by Chinese operator China Telecom promotes the enhanced spying and informing capabilities that 5G will bring.

The ad was spotted by Abacus, which notes the ad circulating on WeChat makes a virtue of how much easier it will be to spy and inform on people with 5G. Abacus asked China Telecom about the spying app featured in the ad, but was told it isn’t real and that there are no plans to develop such an app. The sole purpose of the ad was to illustrate a novel 5G use-case, they were told.

At the core of the ad are three elderly people sitting around having a chat when they spot a couple of shifty looking young men. They view them through some kind of augmented reality app on their phones, which instantly identifies them as criminals. It’s then just a matter of one click on their phone screens to report said baddies to the police.

Our Beijing correspondent reports that the final screen on the ad reads as follows: “5G, connecting all things, beating the Chaoyang Masses hands down. One-click reporting to the police.” The Chaoyang Masses are a well-known community security volunteer group based in the upmarket Chaoyang district of Beijing. They have apparently been instrumental in some fairly high-profile arrests.

Facial recognition is a big deal in China, with Beijing being at the forefront of a social credit system that promises 1984-style constant surveillance coupled with a system of incentives and punishments apparently designed to control almost every aspect of a person’s life. While there are presumably millions of CCTV cameras around the country to support this initiatives, there are many more smartphone cameras.

It’s perfectly conceivable that the social credit system will reward smartphone owners who inform on their fellow citizens, which in turn would massively increase the reach and efficiency of the surveillance state. No doubt the speed and low latency of 5G will augment this whole process, but it seems unwise for any individual telecoms company to align itself so closely to such a dystopian scheme.

Facebook sets out to create its own OS

Facebook has reportedly hired ex-Microsoft employee Mark Lucovsky to oversee the development of its own operating system to reduce the dependence on Google’s Android.

While many have tried and failed to muscle in on the Android dominance in the OS world, Facebook has largely sat back to benefit from the success of Google. That said, according to The Information, in hiring the man who co-authored the Windows NT operating system Facebook is attempting to break-free of the Android shackles.

Although there is no official confirmation from the social media giant, it does make sense. Facebook is not going to be fighting Android for a share of the mobile OS segment, though it allegedly wants more control of its own fate when it comes to the Portal and Oculus portfolios.

“We really want to make sure the next generation has space for us,” Facebook’s Head of Hardware Andrew Bosworth said during the interview.

“We don’t think we can trust the marketplace or competitors to ensure that’s the case. And so we’re gonna do it ourselves.”

With the Portal smart home devices, VR head Oculus and AR glasses codenamed Orion, Facebook is creeping more and more into the physical world. It might not be the traditional stomping group for Zucks and co. though these are emerging environments where the rules have not been written yet.

What is worth noting is this is not the first time Facebook has attempted to create an OS. In 2013, Facebook launched an OS which ran on some HTC phones, but it should not be under-emphasised how much of a disaster this way. It was a catastrophic failure.

However, the playing field is slightly different now. This is not an OS which is trying to replicate the Android experience on mobile, Facebook is attempting to define its own experience on these devices and dictate its own product development cycle.

Verizon and Snap ink 5G AR deal

Verizon has announced a tie-up with Snap to deliver augmented reality (AR) features and experiences in the 5G labs.

As part of the agreement, the duo will work in Verizon’s 5G labs to create AR experiences for live experiences and marketing initiatives. The deal will also see the Snapchat app preinstalled on some Verizon 5G devices, while the telco will also receive marketing placements within Snap Originals video series.

“5G will change the way people live, work and play and we’re partnering with leading companies like Snap Inc. to create unique experiences and new offerings,” said Frank Boulben, VEP of Marketing & Products at Verizon. “Our strategy is to partner with the best brands to ensure our customers have exclusive access to cutting edge technology and services.”

“Major advances in high-bandwidth experiences are fueling the future of augmented reality,” said Jared Grusd, Chief Strategy Officer of Snap. “We are thrilled to partner with Verizon to move the industry forward through the development of creative and innovative 5G experiences on Snapchat.”

While many in the industry have been focusing on enterprise customers to drive genuine innovation in a 5G era, the consumer-orientated telcos in the US are attempting to squeeze out benefits for the general public. AR, alongside virtual reality, is a usecase which has long been touted as a game-changer in the 5G world, though reservations still persist.

For Snap, this is a deal which lives up to the promise made in recent earnings calls.

“We have a significant lead in augmented reality due to the camera-first nature of Snapchat and the frequent usage of our camera, and we believe that smartphone-based augmented reality will be an important driver of our business over the coming years,” said Snap CEO Evan Spiegel last month.

“We have been investing heavily in tools like Lens Studio to help creators build augmented reality experiences and evolving the ways that we distribute Lenses to our community through products like Scan and our AR Bar. Even though augmented reality is a relatively new technology, it provides real utility for our community and real results for our advertisers, making it a natural growth opportunity for Snap.”

Although some of the older generations might be confused by Snapchat as an application, it is started to gather momentum. It is now one of the most popular social media apps worldwide, while the revenues are started to build-up. During the last quarter, revenue increased 50% year-over-year to $446 million, still someway off its rivals but growth is still growth.

Telefónica demos surgery with a bit of help from 5G

Some surgeries were performed in Spain with real-time assistance from Japan thanks to the low latency of 5G.

This is still far from the remote surgery that has for so long been used as an illustration of the utopian potential of 5G, but is nonetheless a dramatic illustration of the kind of things it could unlock. A surgeon performed some operations in Malaga and had real-time assistance from another doctor who was dialling in from Tokyo. That assistance would have been far less useful if there had been a lag on the line.

The demo was part of the Advanced Digestive Endoscopy Conference and featured some degree of augmented reality. It claims also to be the first in medical congress in which the training sessions have been broadcast live with almost no latency, thus enabling attendees to interact thanks to 5G and AR.

“The operations organised at this conference are just an example of the numerous practical applications that 5G can have in healthcare,” said Mercedes Fernández, Innovation Manager at Telefónica. “Thanks to two key features of this technology – the low latency that allows transmission without delays and the ability to handle large video streams at high speed – it was possible to perform this intervention with the added value of doing so live and in real time with the interaction of doctors and attendees to provide solutions and ask questions about the clinical case that was undertaken.”

“The experience of previous years in organising innovative training courses in digestive endoscopy allows us this year to provide a global training course thanks to 5G technology, something that might seem science fiction but that we are making reality today” said Dr Pedro Rosón the surgeon who performed the operations.

“The use of 5G and augmented reality is, without doubt, what stands out in comparison with our previous editions and with any other standard medical workshops. We are therefore proud to keep and to continue offering an innovative training space with the live conducting of cases by specialists from Spain and abroad, with an emphasis on theory and reviewing the latest advances in interventional endoscopy.”

Remote assistance via 5G that makes use of AR may well be one of the primary use-cases used to sell 5G to industry. The potential it offers for providing training in the field is clear and it could transform the way training and mentoring is conducted. These are still early days, but each demo such as this one likely makes mainstream acceptance of this kind of technology more likely.

Verizon buys into alternative realities

Verizon has announced the acquisition of Jaunt XR, adding augmented and virtual reality smarts to its media division.

While few details about the deal have been unveiled, the deal will add an extra element to a division which has been under considerable pressure in recent months. The Verizon diversification efforts have proven to be less than fruitful to date, though this appears to be another example of throwing money at a disastrous situation.

“We are thrilled with Verizon’s acquisition of Jaunt’s technology,” said Mitzi Reaugh, CEO of Jaunt XR. “The Jaunt team has built leading-edge software and we are excited for its next chapter with Verizon.”

Jaunt XR will join the troubled media division of Verizon which has been under strain in recent months. The ambition was to create a competitor to Google and Facebook to secure a slice of the billions of dollars spent on digital advertising. On the surface it is a reasonable strategy, but like so many good ideas, the execution was somewhat wanting.

Since the acquisition of Yahoo, Verizon has had to deal with the after-effects of a monumental data breach, write off $4.6 billion of the money it spent on the transaction, spend big to secure a distribution deal with the NFL and cut 7% of its staff. The first few years of living the digital advertising dream has been nothing short of a nightmare.

Looking at the financials, during the last quarter the media division reported $1.8 billion in revenues. This was down 2.9% from the previous year and accounted for only 2% of the total revenues brought in across the group.

With Jaunt XR brought into the media family, new elements could be introduced to the portfolio. Details have not been offered just yet, though with VR, and more recently, AR expertise, there is an opportunity to create immersive, engaging content for the mobile-orientated aspects of the business.

This transaction will certainly add variety and depth to the services and products in the media portfolio, but soon enough you have to question whether Verizon is throwing good money after bad. This has not been a fruitful venture for the team thus far.

IBC 2019: Interactive takes centre stage as VR shuffles to side lines

Every couple of years there seems to be a massive resurgence for the promise of virtual reality before it is cast to the shadows. This year, interactive content took the limelight from VR.

This is not to say VR and augmented reality wasn’t present at IBC in Amsterdam. Throughout the exhibition halls you could see plenty of headsets and software to build the immersive environment, but on the conference stage it was barely mentioned.

The main stage is the business-end of almost every conference; it a technology or company isn’t a headliner, the ‘also-ran’ category list has gotten a bit longer. This is the conundrum which VR and AR has found itself in; there are some interesting technologies and discussions going on, but the most important people are talking about something else.

AR is progressing very quickly from the pale imitation which captured the imagination through the Pokémon Go app, but the illusive business case continues to frustrate. That said, an important trend which was evident through several sessions was interactive content.

This is an area which looks genuinely exciting. Everything from ‘Bandersnatch’ on Netflix, through to personalisation of sports content (selecting a commentator or parallel content) or Celebrity Big Brother, where users can select the camera they want to view and create their own viewing experience and story to follow. This is the next stage of content, and it is immediately more realistic than some of the blue-sky thinking ideas which are scattered throughout the exhibition halls.

Of course, this should not really be that much of a surprise. The idea of interactive or supplementary content being built into platforms is just one step along from how many younger generations consume content today. It isn’t a single point of consumption, its multiple screens, complimentary experiences and a variety of simultaneous touch-points.

Research from YuMe and Nielsen suggests the trend for adults who use their smartphone or laptop while watching TV content is increasing each year. For 2018, 187.3 million US adults admitted to using multiple screens simultaneously, up 6.4% from the year before. Users want more ways to engage with content and building interactive opportunities into content platforms is certainly one way to apply this trend in the real-world.

HTC taps Orange for new CEO

Struggling Taiwanese device maker HTC has finally found a full-time CEO by tapping into the European telecoms scene.

Former Orange exec Yves Maitre (pictured, no relation) takes over as CEO with immediate effect. He replaces owner and Chairwoman Cher Wang, who stepped in as CEO more than four years ago after deciding to throw in the towel on smartphones.  Wang has spent that time pivoting HTC towards virtual reality and the Vive headset, as well as some other connected devices.

Maitre was most recently EVP of Consumer Equipment and Partnerships at Orange was well as being a member of Orange’s innovation technology group, with a focus developing disruptive revenue opportunities, so his appointment is consistent with HTC’s new direction. Wang and the HTC board have clearly committed the company’s future to emerging mobile devices.

“When I took over as CEO four years ago, I set out to reinvent HTC as a complete ecosystem company and lay the foundations for the company to flourish across 5G and XR,” said Wang. “So, now is the perfect time to hand over the stewardship of HTC to a strong leader to guide us on the next stage of our journey.

“I am truly delighted that Yves is taking the reins; he has a long association with our company, and he shares our passion for innovation. I firmly believe Yves is the right leader to continue to lead HTC to its full potential.”

“HTC has long been a bellwether for new technology innovation and I’m honoured to be selected by the Board of Directors to lead the next phase of HTC,” said Maitre. “Across the world, HTC is recognized for its firsts across the mobile and XR space. I am incredibly energized to grow the future of both 5G and XR alongside HTC employees, customers and investors.  We will set out immediately to continue the transition from building the worlds’ best consumer hardware to also building complete services around them to make them easy to manage and deploy.”

XR refers to mixed reality, which covers all forms immersive digital experience, including augmented reality. The advent of 5G is a potential boon for this kind of tech, especially when the low-latency stuff starts to kick in, as it will enable wireless VR without the kind of lag that makes people throw up. Recruiting someone from the operator side appears to be an acknowledgement of that.

HTC was arguably the most successful Android smartphone maker initially, establishing close ties to Google and shipping in impressive volumes a decade ago. But then much bigger players like Samsung and Huawei got their acts together and HTC simply couldn’t compete with their deep pockets and economies of scale. It will attempt to replicate that feat with XR and hopefully will have a better strategy for fending off the big guys next time.

Hello Kitty guided to the AR gaming world by Google Maps

Hello Kitty is the latest product of a by-gone era to be given a digital face-lift as developer Bublar promises the launch of another location-based, augmented reality (AR) smartphone game.

Like Pokémon Go and Harry Potter: Wizards Unite, this title is seemingly targeting the consumers sense of nostalgia to grab a slice of the increasingly profitable smartphone gaming segment.

Powered by Google Maps, ‘Hello Kitty AR Kawaii World’ will bring take the iconic character Hello Kitty, first debuted in 1974, into the digital content arena with the promise of AR. Pre-registration for the game will begin at Hello Kitty´s 45th anniversary in November, with Swedish developer Bublar hoping to launch the title in early 2020.

“Our mission is to merge the real and imaginary worlds together in a fun way, connecting Augmented Reality and digital content to real-world locations,” said Wictor Hattenbach, Game Studio Director at Bublar.

“Our collaboration with Google Maps Platform gives us access to the most prominent mapping service in the world. Buildings, roads and parks will in the game be transformed into a Kawaii world for Hello Kitty and her friends based on Google Maps Platform.”

Although the marriage of augmented reality and mapping technologies does look to be a promising one in the smartphone gaming segment, this is only a tentative step. For the location-based gaming concept to be fully validated, there will be have to be a game which stands on its own two-feet, attracting interest on its own merit. Leaning on the concept of nostalgia is an effective strategy, but there are only so many horses to back in that competition.

So far, we have seen some successful ventures into the world of nostalgia. Pokémon Go was of course a rip-roaring success, and while there is promise for the Harry Potter franchise, the early signs have not been anywhere near as bountiful. That is not to say it won’t make money, but such was the profit-machine Pokémon Go was and is, it has set the bar very high.

The interesting element of the Harry Potter and Hello Kitty games is relevance today. Pokémon Go’s success was partly down to nostalgia, though it will begin to tail off as there is not an engaged audience today. The games are not played as much, and the TV series is no-where near as popular. Harry Potter and Hello Kitty have retained audiences which are constantly engaged through various different mediums.

Of course, what you have to bear in mind is that a large percentage of the audience will not be old enough to have credit cards, parents will have to authorise payments. This is where Pokémon Go perhaps can attribute a notable proportion of its success. That said, there is an element of longevity with these two titles which might not be present for Pokémon Go in the coming years, unless of course the brand can be refreshed through supporting channels.

As mentioned before, nostalgia is not a bad thing however. It will normalise the idea of location-based gaming in the eyes of the consumer, and once it has been normalised, a more varied ecosystem can be developed with a broader range of titles. The nostalgia effect will build market confidence that this is an area in the app economy which can be profitable.

It will be interesting to see how many more titles emerge over the coming months and years as location-based gaming becomes more popular. ‘Otherword Heroes’ is one which Bublar currently has in development.

This is another game which marries AR and location-based technologies to build a new type of smartphone experience, but it is a new story; it isn’t using nostalgia to drive downloads or popularity. Currently in public beta mode, using Bublar’s MMO-platform (massive multiplayer online) where real-time users create and interact with data linked to real-world locations.

The team intend to launch ‘Otherword Heroes’ towards the end of 2019, using the ‘freemium’ model. Users can download the app for free but will be able to enrich the in-game experience through in-app purchases, while advertising revenue can be realised through rewarded ads in-game to unlock or speed-up certain game content. It’s a common-enough model, though it does rely on scale.

The online gaming segment, especially content designed for smartphones, is growing rapidly across the world. This growth is not only being realised in the revenue columns of the spreadsheets, but also the number and variety of users. Smartphone games are increasing the accessibility of online gaming, bringing in users who would never have considered spending hundreds on consoles. The format is opening-up the segment massively.

Location-based gaming looks to be somewhat of a fad, driven by nostalgia, currently but soon enough stand-alone, novel concepts and content will emerge. We are really exciting about the prospect of location-based gaming and can’t wait to see what creative/crazy ideas emerge when the idea is normalised, encouraging more developers

The number of commercial 5G devices almost tripled in Q2 – GSA

The latest data from the Global mobile Suppliers Association show the number of 5G devices being launched worldwide is accelerating rapidly.

If you take at look at the GSA data from the end of March only 19 vendors had announced forthcoming 5G devices, with 33 models officially confirmed. These numbers have now significantly increased, with the latest data showing 39 vendors have now announced upcoming devices and the number of officially confirmed devices has now nearly tripled, standing around 90.

Looking in depth at the recent data also provided by GSA, 28% of the 90 officially confirmed devices are phones (the number standing at 25). On top of that GSA found 23 CPR devices, 23 modules, seven hotspots with assorted dongles, routers and drones comprising the chasing pack. The devices contained 5G chipsets from just four vendors – Qualcomm, Mediatek, Samsung and Huawei, with Intel no longer in the game.

As expected, smartphone vendors have jumped on 5G for various marketing campaigns. The most conspicuous of these is Samsung, which released  the Galaxy S10 5G first in Korea on earlier this year and then in the UK on June the 7th . The S10, due to its 5G compatibility, has a wider array of VR and AR functions than other 4G phones. This new way to experience VR and AR is critical as it will reach further out towards the younger generations who enjoy mobile gaming or more specifically games like Pokémon GO and the more recent Harry Potter: Wizards Unite that heavily rely on the use of AR.

This latest batch of data from the GSA indicates the device ecosystem is fully ramping up its 5G output. How much of this is purely speculative rather than responding to specific demand is still unclear, but we should get the first lots of 5G device sales data before long, which will clarify things.