M&A Activity Reflect AR’s Bright Enterprise Future

on July 24, 2020

While consumer-focused augmented reality continues to be a bit of a slow burn in terms of interest and adoption, on the enterprise side of things, the technology continues to ramp at a faster pace. In fact, the pandemic—and many companies’ suddenly urgent need for remote assistance and “see what I see” capabilities—has driven a spike in interest and usage of the technology, primarily on smartphones and tablets. Enterprise AR on both mobile devices and head-worn products will be a huge market. And while it is still early days, we’re already seeing some interesting mergers and acquisitions happening in the space, including the recent acquisitions of two key players: Focal and Ubimax.

Google Buys North
In late June, Google announced it was acquiring smart glass vendor North, which had been shipping version one of its Focal products and was gearing up to ship version two. Google’s Rick Osterloh, senior vice president of devices and services, said in a statement that “North’s technical expertise will help as we continue to invest in our hardware efforts and ambient computing future.”

I had included North in an IDC Innovators writeup in 2019, noting that the company—founded way back in 2012 as Thalmic Labs—had brought to market a unique product that looked more like a regular pair of glasses than most AR headsets. I had a chance to use Focals 1.0. I was impressed by the technology, which focused less on dazzling visuals and more on simply delivering information to the wearer in a useful, unobtrusive manner. However, because the company required a personalized fitting for each pair of glasses and focused on selling to consumers versus enterprise, I had concerns about its ability to scale over time.

I did not have the opportunity to test Focals 2.0 but had heard good things. Google obviously felt the same way and moved to make the acquisition. Unfortunately, the company has opted to shelve that new product and refund the purchase price to those who had preordered them. It is not clear yet if Focals 2.0 will eventually make its way to market as Google-branded glasses, or if the company will instead leverage the technology in a future version of its own product line.

While many remember Google Glass as a failed early attempt at consumer AR, Goggle pivoted that product toward enterprise use where it has enjoyed a long and successful tenure in a wide range of vertical use cases. It shipped the first version for many, many years, and in 2019 it rolled out Glass Enterprise Edition 2 with improvements such as a better camera and Qualcomm’s Snapdragon XR1.

Google’s history of hardware acquisitions is mixed at best, so it will be interesting to see how it moves forward with North. I am hopeful that good things will come from this acquisition, and that North’s great technology makes its way into new products sooner rather than later.

TeamViewer Buys Ubimax
On July 15th TeamViewer announced it was acquiring Ubimax. Early this year, I wrote about Ubimax as part of another IDC Innovators document on AR Enterprise Platforms. I noted at the time that one of the things that made the company unique was that it offered customers a complete solution, not just hardware or software. Founded in 2011, Ubimax has evolved its Frontline product into four high-level segmentations: xPick for picking and packing, xMake for assembly, xInspect for service, and xAssist for expert remote support.

Ubimax does not make its own hardware, but it supports a wide range of hardware from other companies, including smart glasses, head-mounted displays, and even smartwatches. One of the other things I like about the company: It offers companies the whole package in an as-a-service model, which I think is a smart way to help organizations begin their AR journey. Called Everything-as-a-Service (XaaS), for $200 per month, Ubimax includes all necessary hardware, software, and services.

At first blush, TeamViewer acquiring Ubimax may seem a strange fit. The company is best known for its service that lets you “control, manage, and repair computers, mobile devices, network machines, and more—from anywhere, anytime.” But the company has, for some time, also offered an AR product called TeamViewer Pilot, a remote assistance service that lets workers connect to remote experts using their smartphone. In a statement on its Web site, TeamViewer says the Ubimax acquisition will help it to expand its AR and IoT offerings while accelerating its development of use cases focusing on data analytics and artificial intelligence. I’m excited to see where the combined company takes things.

Watch this Space
I expect more mergers and acquisitions, as well as interesting partnerships and collaborations, to take place in the AR market in the coming months. And companies continue to build out their offerings to serve this important market. This includes huge, well-established enterprise players such as Microsoft, PTC, and Lenovo, as well as startups and smaller firms such as Atheer, ScopeAR, Upskill, RE’FLEKT and dozens more. Plus, mega-startup MagicLeap continues its attempt to pivot from consumer to enterprise with the recent hiring of Peggy Johnson, formerly an executive vice president of business development at Microsoft, as its CEO.

COVID-19 has made clear the utility of AR for a broader range of companies, but unfortunately, the resulting recession could slow down some companies’ near-term rollouts. As a result, this market is likely to see some roller-coaster ups and downs in the coming few years. But make no mistake, enterprise AR is here to stay.