iPhoneX, AR & Local: How Do All the Pieces Fit?

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There are lots of ways that augmented reality (AR) is a natural fit for local commerce. We and others have examined it closely. But questions remain: How will AR will materialize in local? How long it will take? And how do these factors signal local startups and media companies where to place their chips?

One place these signals were frustratingly absent was Apple’s iPhoneX unveiling last week. After months of telling people that AR is the future of local discovery, and “just wait until Apple’s September event,” I watched in disbelief as AR’s future was characterized by… better selfie masks.

I quickly realized that downplaying AR in the iPhone X was calculated and probably smart: Boosted AR-capability in the device would mean an ARkit developer platform that’s fractured between device tiers. ARkit’s edge is conversely its compatibility with 380 million existing iPhones (read: scale).

That reach is precisely what will bring AR to market sooner. It will play out like this: A sizable installed base of compatible iPhones will incentivize developers to build AR apps, especially local ones. That scale plus Apple’s halo effect will put AR into lots of people’s hands (literally), and fast.

If you want more quantitative evidence, Google’s corresponding AR development kit ARCore will achieve even greater scale. Its device compatibility is limited to a few smartphones today, but will fill out Android’s two-billion global installed base over the next replacement cycle (2.5 years).

ARCore also carries Google’s DNA in a road map that emphasizes web-based AR, delivered through the Chrome browser. The jury is still out on the best packaging for mobile AR, and there are many including myself that believe Apple’s app-centric paradigm has too much friction (a la app fatigue).

This will be an important factor to watch for anyone plotting AR strategies now or in the near future. Picking a horse in terms of ARkit vs. ARcore (or both) will be important. It will also notably parallel the last decade’s Android vs. iOS mobile “platform wars,” which forced the same decision.

Regardless of the platform that AR-interested developers, publishers and local startups choose, the competition — though it fragments the market a bit — will ultimately be good everyone. It will drive innovation on both ends as well as downward price pressure for consumer apps and devices.

But more than anything, the lesson is that it will happen quickly. And because of AR’s natural fit in local commerce and discovery, an early mover advantage can be gained by those who get a head start. That means play with ARkit to figure out ways it enhances your product model, or inspires new ones.

This urgency is key because companies in the local commerce sector have famously and woefully missed several successive waves. That has led to years of playing catch up. We’re talking traditional media’s latent adoption of the desktop web and then the smartphone. You know who you are.

It’s also important to note that the pace is accelerating. Innovation cycles were faster with the smartphone (i.e app development) than the desktop (building websites), which were faster than print. With each passing revolution, response time diminishes while opportunity cost grows.

Size matters too: with AR, local startups will be more agile and experimental than larger media companies. The latter will get tripped up in cultural inertia and innovator’s dilemma. One way around this is to build innovation labs that aren’t saddled by things like cannibalization concerns.

Lastly, my recent rant on “native VR” applies to AR too. Shoehorning legacy formats into immersive media will fail. We’ve seen this movie before, including with smartphones. Put another way, whoever places banner ads in AR apps will be the first major fail of the next mobile local advertising wave.

Mike Boland is Street Fight’s analyst-in-residence and author of the Road Map column. He covers AR & VR as chief analyst of ARtillry, and SF President of the VR/AR Association. He has been an analyst in the local space since 2005, covering mobile, social and emerging technologies.

A Street fight report is currently in production that will go deeper into augmented reality’s opportunity and dynamics in local commerce.


Mike Boland has been a tech & media analyst for the past two decades, specifically covering mobile, local, and emerging technologies. He has written for Street Fight since 2011. More can be seen at Localogy.com