A Snapshot of the Competitive Landscape of Augmented Reality

Augmented Reality has the potential to change how we communicate with one another.  Our physical and digital worlds have always been separated by a distinct line, but AR has the power to merge these two worlds together.  Suddenly the distinction between digital and analog disappears because anything analog can have a digital experience attached to it, and all that matters is how our future “smart glasses” interpret the world.

This new industry presents an interesting subject for strategic analysis.  Looking from a distance, there are a few big competitors in the industry.  These mostly include the BigTech companies such as Apple, Snap, Google, Microsoft, and Facebook.  At the same time, there are many smaller startups developing both competing and adjacent technologies that will be used to power AR experiences.  In addition, many other companies are incorporating AR into existing apps and could later transition these apps into an AR equivalent.

Since the industry is in its infancy, a potential entrant could argue that it is ripe with opportunity.  At the same time, there are high capital costs associated with the development of the new technology.  One strategy might be to take a “wait and see” approach.  Let the BigTech companies develop the technology and, in the meantime, learn more about these companies’ software frameworks and platforms.  That way a new entrant could be well positioned to be the Instagram or Snapchat of the next generation and develop the killer app for AR.  Another strategy might be to compete directly with these incumbents by building “best of breed” AR hardware.  If done well, the new company could have a greater influence on the development of AR technology.  This approach would likely need significant investment.  Either way, Augmented Reality will change the way we see the world.