The Battle of Augmented Reality Platforms

We finally know what Google’s plan is to support augmented reality more broadly within the Android ecosystem. A few days ago, Google posted this blog post outlining how their new toolkits, name ARCore, will function. Several of the video demonstrations coming from early developers testing the development tools look promising. The main issue, of course, will be a number of Android devices supported with ARCore. Google hinted at not just Pixel’s but the Galaxy S8 line but went further to say they hope to support around 100 million devices by the end of the year.

Apple, on the other hand, will have around 500 million devices in the market that support ARKit. However, a number of devices is only part of the equation as developers look at where to spend their energy. Developers want to make money, and that has always been the iOS app stores greatest promise. To put a little more context on this consider the number of active devices in each ecosystem it took for their app stores revenue to reach $1 billion.

• The Apple app store revenue reached $1 billion annually only once the user base exceeded 100 million.
• The Google Play store revenue only reached $1 billion annually after cumulative shipments reached 1 billion which happened in 2013. Estimates at that time were the Android installed base was around 800-900 million.

Looking at this from that perspective shows us how with significantly fewer users, iOS can generate dramatically more revenue for developers. iOS app store remains steady at 2x the developer payout to Android on an annual basis and that the gap could grow larger with augmented reality apps.

The economics of iOS is the easiest case to make that Apple’s AR tools will get utilized more deeply by developers and we will see significant adoption of AR by Apple’s customer base.

I do want to go back to Google’s ambition to support ~100m Android devices by the end of the year. I’m not sure they will hit this number, but I do think they will be close. Without giving out too many details, Google’s tools suggest there is a degree of server side processing they are doing with ARCore which is a smart tactic to offset some of the hardware limitations they will face with device CPU, GPU, and camera sensors with mid and low-end Android devices. Facebook’s AR approach is similar in that they are doing more on the server side than the device side so they can bring AR to more customers who don’t have the latest and greatest technology in their smartphones.

There will be tradeoffs in this approach as both increased broadband like 5G as well as better, more specific, cloud computing architectures will be necessary. This is why Google will undoubtedly continue to emphasize the hardware specs around ARCore to stay competitive.

Besides the types of apps, we will see built around iOS and Android, I’m mostly interested to see how consumers react to these platforms from an AR standpoint. It seems clear as of now, we will see more apps and a greater AR ecosystem on iOS, and I’m curious if this accelerates interest to iOS over Android for consumers looking to upgrade their smartphone. You can make a case that if there are many compelling AR experiences on iOS, and lots of people visibly using and benefitting from them, that it could convince more folks to switch from Android to iOS. Knowing the camera will play a huge role in quality AR experiences, we note from research that the iPhone camera alone just for photography is a major factor in driving switching. Following that logic could suggest AR and the camera tech needed to pull it off could help drive switching.

Many years ago, I wrote about how we would start to see iOS and Android grow the gap between them from a technology and SDK/API standpoint. AR could be one of those things that pushes this gap larger. It all really rests in the hands of developers which will make watching what happens this next year extremly important for both platforms.