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The Rise of Augmented Reality (AAPL)

seymour_greenz • July 30th 2015 08:32:13 AM

Augmented Reality. What is it? Does it hold promise? Who's involved in it? Is it fun? Is it dangerous? Is it investable? We'll explore the answers to these questions in this article.

What is Augmented Reality?

Augmented Reality is the overlay of digital data onto a real-world perspective. A great example of this is the heads-up display, or HUD, of a F-16 fighter jet. Air speed, altitude, horizon, mach, and telemetry, among other data, is drawn or overlayed onto the pilot's view. There are many reasons why including this data directly in the pilot's view is advantageous. For example, not having to avert the pilot's gaze to check the console for data during critical times. In a warfare situation, increasing focus and shortening reaction time can be the difference between mission success and failure and life and death.

Another example is a similar technology beginning to find its way into automobiles. Vehicle speed, fuel levels, MPG information, speed limits, proximate cars and even mapping details can all appear as if to be projected by magic onto the windshield, saving the driver from glancing from the road or from the old "unfurling of a map and flashlight" trick.

Aside from these "classics" there are many new and innovative entries into the field, ranging from navigational utilities and translation apps to educational activities and arcade-style entertainment.

Does it hold promise?

It's still early in the Augmented Reality game, but there's some real killer-app promise out there.

Perhaps one of the most well known examples is an app called "Word Lens". This ingenious program allows you to aim an equipped smartphone's camera at foreign text and it instantly identifies and translates the text into English (or another language). Furthermore, it does it in a way that graphically tracks the original text and preserves the appearance of the original sign, as if by magic. For example, if the app is aimed at a sign of a restaurant the resulting translation will look like a real sign. Here's a demo:

It should be noted that this app was acquired by Google, folded into the Google Translate app, and is now available for Android and for free.

Of course, Google has another famous Augmented Reality product, Google Glass. Glass ambitiously aims to be an "always there" assistant, literally in the corner of your eye. While I think it's a great idea and can be tremendously useful to "be connected", I think the borg-like nature of the device has had an uphill social acceptance battle.

Where it was not considered socially acceptable to be seen muttering alone, seemingly talking to thin air, or walk around staring into a book just a few decades ago, we now see entire generations embracing these concepts and think very little of it. Transitions take time, but utility and efficiency have a way of winning out over the long run.

Microsoft has a tremendous entry into the field with HoloLens. HoloLens is similar to Google Glass in some ways and completely different in others. Rather than settle as a lightweight, always-on internet connected assistant, Microsoft optimistically envisions a world where the Augmented Reality of HoloLens subsidizes the real world in specific areas such as education, work, personal assistance and entertainment.

The Microsoft HoloLens Headset

For example, HoloLens-equipped medical students gather around a fully animated 3D human body model where the teacher can showcase how the skeletal, circulatory and nervous systems interact, toggling them on and off at will. Students can walk around and peer into the "living" parts in a way never before possible, making the experience feel extremely real to the participants and of great educational value. Multiple co-workers, separated by great distances, can collaborate on a new product design, making iterative changes and improvements to the design together in real-time, as if it they were actually gathered around an real physical product and had a bag of magical modeling tools.

Windows 10 has just been launched and HoloLens is deeply integrated into the new operating system and Microsoft's future plans.

Is it fun?

It's no surprise that a huge area of development for Augmented Reality is entertainment and edutainment. Microsoft acquired Minecraft last September for 2.5 billion dollars and HoloLens is hot on the case. In this scenario, HoloLens provides an exciting glimpse into the future of entertainment where a beloved game and Augmented Reality blend together to become something more. Countless fans of Minecraft all over the world seem eager to dive into this new world. Very clever of Microsoft to connect these dots.

Magic Leap is a Florida-based startup that has been secretively developing a system that has been described as "Google Glass on steroids".

So impressed was Google, Qualcomm and others, that they invested $542 million in Magic Leap last year. If sucessful, however, the landscape of entertainment and edutainment will be forever altered. Offices become vivid virtual battlefields, strewn with menacing enemies and children's books come to life with educational and entertaining 3D characters.

We saw what happened with Word Lens. Could Magic Leap be Google's answer to HoloLens?

Is it dangerous?

Some critics of the Augmented Reality technology claim it is a view obstruction, distracting and downright dangerous. Of course, you should not be fighting virtual aliens in the middle of the street or designing new products in a subway station. When used responsibly and in the right context I think Augmented Reality apps can actually improve awareness and safety. For example, helping to keep eyes up and focus on surroundings rather than glancing down at a map or app, or guiding a safer route to the destination. Exactly the same kind of benefits afforded to the heads-up display of a fighter jet.

Is it investable?

I think the field of Augmented Reality and the companies that are dipping in to the Augmented Reality technology waters show tremendous promise. Rather than a single killer app, there appears to be multiple entries with even more innovation on the way. Optimistically, this field has a chance to explode the way television did in the 60s and video games did in the 80s. I think it's a great area for ambitious and talented start-ups to focus on and it holds equally impressive rewards for the big players like Microsoft and Google that are already involved. In short, I'm very optimistic on Augmented Reality and the companies involved.

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