Facebook Pushes Further Into AR

In an interview with Recode following Facebook’s F8 conference, Mark Zuckerberg laid out his rationale for Facebook’s big bet on augmented reality:

“Think about how many of the things you use [that] don’t actually need to be physical. You want to play a board game? You snap your fingers, and here’s the board game. You want to watch TV? You don’t need a physical hardware TV, you buy a one-dollar app ‘TV’ and put it on the wall.” – Mark Zuckerberg

To push towards this future – and in an attempt to own the underlying technology – Facebook launched its “Camera Effects Platform,” an open platform for developers to build AR-features and lenses for the Facebook in-app camera. Zuckerberg also confirmed to Recode that Facebook is building “AR hardware” and shared his thoughts on the future of AR and VR; among them:

  • There will be demand for separate VR and AR products in the future.
  • The technology doesn’t yet exist to create the AR glasses that industry leaders are envisioning.
  • Building VR products today will help build the AR products of the future.
  • AR will be a bigger business than VR.

Our take: AR will enhance the smartphone, then replace it. It’s consensus that AR will be bigger than VR over at least the next 10 years — and we agree. AR will enhance the smartphone, then replace it in that time frame. But if you look out further than that, perhaps 30+ years, the immersiveness of VR has the potential to be so good that it rivals base reality. This will require advances in both artificial intelligence and neuroscience, not just digital enhancement. If VR can create alternate worlds as rich as the real one, we think the opportunity would surpass anything humans have created to date.

Facebook gets it, and they are investing accordingly. In fact, the biggest players in the space will collectively spend over $51B on R&D in 2017, of which we estimate $4B will be AR-related spend.

From Google’s work on Glass (2013) and Tango (2014) to Microsoft’s investment in Hololens to Apple’s uncharacteristically vocal pursuit of AR as a core technology, the biggest players are determined not to miss out on the next dominant computing platform and the AR technology underneath it. In fact, in our assessment, Facebook lags behind other incumbents including Google, Apple and Microsoft. But they’ve got a foothold in social and, today, AR is expanding through social – the most forward-thinking AR application is Snapchat. Everyone else is following fast and F8 is a clear indicator that Facebook is doubling down on AR in the race to own the OS of the future.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Apple’s Glucose Monitor Better Delivered via AirPods Than the Watch

Media reports suggest Apple is aggressively pursuing the creation of a non-invasive blood glucose monitor. The most obvious device to leverage this monitor may seem to be the Apple Watch; however, as we wrote two weeks ago, we think that, long term, AirPods are a more important product for Apple than the Apple Watch, because biological data available in the ear is much richer than the data available from the wrist. This makes AirPods a better candidate to be Apple’s glucose monitoring solution in the future.

Source: Apple

A recent study on wrist-worn heart rate monitors, including the Apple Watch, suggests that they offer spotty accuracy at best. The study showed that the Polar M7 chest-worn monitor has a 99% correlation coefficient to an electrocardiogram when measuring heart rate, the industry standard.  The Apple Watch had the next highest coefficient at 91%, with the study noting that the accuracy decreased as exercise levels increased. While 91% accuracy may be acceptable for recreational heart rate monitoring, it’s not acceptable for blood glucose monitoring.

In a separate study, scientists tested the use of an ear-based sensor to calculate VO2 max during exercise. The study showed that the ear-based sensor had a 98% correlation coefficient to an electrocardiogram when measuring heart rate, nearly the same as the Polar M7 monitor. We believe that movement of the wrist during activity is a key factor in reducing accurate biological readings, a problem that impacts ear-based wearables significantly less. We also believe that the ear offers the possibility to collect better data, which the aforementioned study seems to confirm, and richer data, because of the semi-internal nature of the ear canal, proximity to the brain, and greater blood flow in the area.

If Apple does use AirPods to monitor glucose via the ear, they wouldn’t be the first company to try it. Integrity Applications sells a product called GlucoTrack, which uses an ear-clip device to monitor ultrasonic, electromagnetic, and thermal data to produce a blood glucose reading. Apple may be able to incorporate similar functionality into AirPods, creating a multifunction device.

Transforming medicine has long been a focus at Apple, particularly under Tim Cook. The company pioneered ResearchKit to drive forward medical research through rich patient data. Apple also created CareKit to enable developers to create better applications that help users manage their health. Developing solutions for a condition like diabetes, which affects millions of people around the world, is a next logical step. We think that step happens at the ear, not the wrist.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Don’t Miss the Importance of Diminished Reality

Written by guest author Lindsay Boyajian, CMO at Augment 

Pairing augmented reality with diminished reality provides a superior visual experience and could help grow the AR market.

Augmented reality, virtual reality and mixed reality are three realities that exist on the reality-virtuality continuum—and they are probably the three terms you have heard again and again.  However, there is a fourth reality you probably haven’t heard of—diminished reality.

Diminished reality can be thought of as the opposite of augmented reality. Augmented reality (AR) enhances our reality by overlaying digital elements like 3D models on the physical world.  Contrary to that, diminished reality (DR) diminishes parts of the physical world. It removes unwanted objects in our view.
Karen E. Hamilton (CC BY-NC-SA 3.0)

How does diminished reality enhance augmented reality?

Although DR doesn’t lie on the virtuality continuum, it can be used in combination with AR for a greater visual impact.

Let’s take the example of interior design. AR lends itself well to interior design because it allows us to try different pieces of furniture in our homes. Thanks to AR, we can see exactly how a new chair would fit and complement our existing space.

However, often the space we are trying to redesign is already crowded with old furniture. Placing the new chair in AR on top of the old chair doesn’t serve much value. You can’t appreciate it. If you first use DR to hide the old chair from view, then use AR to place the chair in the seemingly empty space, the visual experience is much improved and valuable for the end user.

 

This combination of augmented and diminished reality is referred to as mediated reality. The term mediated reality is attributed to MIT researcher Steven Mann in 1994. Mediated reality alters our perception of reality by adding and removing information through a device such as a headset or smartphone in real time.

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Don’t Write Microsoft Off

Typically, when we talk about the future of AR and VR, the first companies that come to mind are Apple, Google, Facebook, and Snapchat; however, Microsoft does not receive enough credit for the strong positioning it has already built.

As shown in our Jump Ball for the Next OS chart, Microsoft sits in third place behind Google and Apple in terms of elements necessary for a complete AR OS.

In the past week, Microsoft has made three important announcements that show the advances it’s making in order to better position itself as a key platform for VR and AR the future.

Project Scorpio. Last week, Microsoft unveiled its final Xbox Project Scorpio specifications through Digital Foundry. Project Scorpio is a mid-generation console with 4K output and VR gaming capabilities. Gaming is one of the first areas where VR will have a big impact, and Microsoft is poised to benefit from it.

Of all of the companies vying to own VR and AR platforms of the future, Microsoft is the only one to have a gaming console. In January, Microsoft shared that it had reached 55 million monthly active users on its Xbox Live platform, up 15% from the previous year. The Project Scorpio console, set to be released this fall, is powerful enough to display VR content. Microsoft’s main competition in console gaming is Sony, who released an early VR system in November of 2016. Sony has since announced that Playstation VR has sold over 915,000 units as of late February. We view Playstation VR as a step behind the HTC Vive and Oculus Rift, but ahead of smartphone-powered experiences.

While Microsoft doesn’t produce any VR hardware, it sells the Oculus Rift headset in its stores and has included the Xbox controller in Oculus Rift bundles. Oculus seems like the logical choice for a VR headset partner for Project Scorpio, but Microsoft shared that the next console will also support the Mixed Reality Headsets from Microsoft in 2018, which include headsets manufactured by Lenovo, Dell, Acer, and HP.

Mixed Reality OS Support. Microsoft recently announced that its latest Windows 10 update, the Creator’s Update, will start rolling out to users beginning on April 11th. This update will include support for Mixed Reality (MR) headsets. While this doesn’t mean much to consumers now since MR headsets won’t be available until the holiday season, developers that are soon to receive their MR development kits will be able to work on creating content and applications now. Providing developers with this early window should lead to high-quality MR content being available on day one of the MR headset releases.

It’s also important to remember that Microsoft is leading the way when it comes to MR hardware, with the Hololens. While there are improvements that can be made, Microsoft has a commanding lead in the category. Its updates to Windows 10 will further benefit Hololens developers as well. We continue to view mixed reality as true augmented reality.

Sprinkles. Microsoft has also released a photo application for iOS called Sprinkles, which is a foray into AR on a mobile platform. Sprinkles gives users photo editing tools, allowing them to add filters, stickers, and emojis. In addition, it utilizes facial recognition to position stickers and recommend celebrity look-a-likes. This app is similar to Apple’s recently released Clips.

While Microsoft clearly missed an opportunity in the shift to the mobile computing paradigm, it seems heavily invested in positioning itself as a strong company in the future computing paradigm based on its investments in AR and VR.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Feedback Loup: Clips

Yesterday Apple released Clips, a new app for iPhone users. Apple describes Clips as, “A new iOS app for making and sharing fun videos with text, effects, graphics, and more.” And Clips is fun, but it doesn’t show us the kind of augmented reality lenses and layers that we were hoping to see from Apple.

We’ve written a lot about how AR will change the way we interact with computers. Over the next several years, the smartphone will increasingly become a window through which users can see an augmented world. Players like Apple and Google are well-positioned to win the jump ball to own the dominant operating systems in that new paradigm. Google’s leadership in core disciplines like maps, data, and content make it an important incumbent. Apple’s leadership among app developers and payments will be important, but we think design is Apple’s trump card in AR. But Clips is more filters and effects than lenses and layers. There is an interesting real-time transcription capability, but unfortunately Clips is short on true AR.

In about 5 min. I was able to put together a short video with text, effects, filters, and music. Clips uses fairly rudimentary real-time computer imaging, but this could be the beginning of the underlying technology that will one day direct you to your seat in a stadium, overlay talking points during a presentation, or provide instructions as you assemble new furniture.

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