February 15, 2016

Virtual and Augmented Reality Opportunities are Rising and Very Real in Asia

If you haven’t been paying close attention, virtual and augmented reality in the Asia Pacific region might appear to represent niche markets – demanded by hard-core gamers with impressive looking gadgets covering their faces.

The reality for these ‘realities’ is very different. The market for virtual reality might be largely gaming-focused for now, but the overall opportunity is massive, and the markets for augmented reality are many. What makes the augmented reality market particularly interesting, especially in Asia, is that many of us already carry in our pockets the technology we need to take advantage of the medium.

It’s called a smartphone, and Asia is the world’s biggest market for smartphones. According Forrester Research, the number of smartphones in Asia passed the one billion market in 2014 and is on track to reach two billion by 2019. By that time only one country in the entire contintent, Pakistan, will have a smartphone penetration below 70 percent, Forrester estimates.[subscribe_reminder]

Augmented reality involves overlaying information onto images of the real world. With the rapidly growing population of smartphones in Asia there is great potential for using mobile apps to add supplementary information to real world images captured by a phone’s camera and displayed on its screen.

So, its hardly surprising that the analyst community is bullish about the prospects for augmented reality, especially in the Asia region. A report from Research and Markets expects the global market for augmented reality to grow at a compound annual growth rate (CAGR) of 79.6 percent from 2015 to 2020, with Asia being the fasted growing region.


The Many Applications for AR


Applications are widespread, spanning 3D visualization, disease detection, retail, e-commerce, architecture, and even the auto industry. However the standout growth market in the Asian region, will be the use of AR for marketing and advertising via smartphones. It is projecting this market to grow at a CAGR of 135% over the next five years.

Augmented reality is a distinct technology from virtual reality.  With VR, users are presented with representations of worlds that are entirely computer generated. The great majority of computer games rely entirely on computer-generated realities, and represent a massive market. The applications for AR are considered by many to be more varied and therefore carry the potential for both greater growth and more opportunities for entrepreneurs.

According to a report from gaming industry research company, Superdata, the worldwide market for VR gaming will reach $5.1 billion in revenue in 2016, with an installed base of 38.9 million consumers. Superdata sees Asian smartphone users as major contributors to this growth.

“Mobile in Asia is the first step toward virtual reality’s $12.3b 2018 industry,” it says. “Asia will account for more than half of worldwide mobile VR users next year, helping it quickly gain a quarter of the global market.”

There are many applications for AR that, while hardly niche are directed to specific groups. The application likely to have the widest appeal and rapid take up, because of the potential return and competitive pressures, is marketing.

The cause is championed by one Asian blogger who argues that marketers can make far bigger, speedier gains if they focus on augmented reality, since: “Almost every consumer in Asia’s developed markets, however, already owns augmented reality applications — also known as a smartphone or tablet.”


Expo Promotes AR in Asia


A sure sign that AR is gathering momentum in Asia was the staging last September of Augmented World Expo (AWE) 2015 in Xi’An China by augmentedreality.org.  The organization has been staging similar events in Silicon Valley for the past six years. It was, according to Wired magazine, the largest event of its kind in Asia, and attracted over 1600 attendees and 60 exhibitors.

At the event, AugmentedReality.org announced the establishment of an augmented reality community in China through the Augmented Reality China Alliance (ARCA) and a web site, AugmentedReality.org.cn to support this.

AWE, however was not the first AR event to be held in Asia. That honor goes to Jakarta based Augmented Reality & Co, a member of the WIR Group, which claims to be Asia’s largest AR company.

It staged its first event in 2012 at Jakarta’s Bina Nusantara University, reportedly drawing an audience of 1500 people. The event has been held every year since, most recently as part of the massive IndocomTech Asia show in October 2015.

Not that Asia has been slow to embrace the potential of AR. Five years ago, in April 2011, PrintMediaCentr was able to report on its blog “Five Cool Augmented Reality Case Studies in Asia…[shouldn’t]…really come as a surprise. Asia does have quite a bit of AR case studies.”

Tourism Malaysia has been particularly quick off the mark in exploiting AR. Back in 2014 it organized what was claimed to be South East Asia’s largest augmented reality hunt in Penang. Clues were hidden around Penang that could only be found with the use of a mobile app.


Asia Tourism Ripe for AR


Getting early into AR is a smart move for any tourism focused organization. Travelers crave information. In the pre-internet era their needs were catered for by generations of travel guides, from Baedeker to Lonely Planet. These have been replaced by their online versions and the Internet in general. Overlaying useful information on images of the real world on head gear or glasses represents the next generation of traveler information.

Given that Asia is a major global destination – with the Financial Times reporting in June 2015 that Asian cities accounted for half the top 10 most popular overnight visitor destinations worldwide -- tourism in Asia that could be one of the key industries to drive AR/VR development and adoption.  In so doing the region could be a cradle of innovation for one of the most exciting areas of economic growth between now and the end of the decade.













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