The mobile AR platform war kicked off at F8 with Mark Zuckerberg’s proclamation that “we’re making the camera the first augmented reality platform.” That simple sentence transformed what had been a one-hit wonder in Pokémon Go into an epic battle between Facebook, Apple, Google, Tencent, Snap, Alibaba, Baidu, Samsung, Huawei and more. Apple’s announcement of its ARkit for iOS this week as “the largest AR platform in the world” took the mobile AR war to the next level. They’re fighting over a market that could hit over a billion users and $60 billion revenue globally by 2021 (as detailed in Digi-Capital’s new Mobile Augmented Reality Report).
Software is eating the (mobile AR) world
While folks were distracted by the prospect of an iPhone AR being launched by Apple, Facebook changed the game fundamentally by launching its mobile AR Platform. But Apple secretly had its own mobile AR software plans brewing ahead and countered with ARkit for iOS. So where mobile AR hardware from Apple, Samsung, Huawei and others could deliver an installed base over 400 million users by 2021, Facebook, Tencent, Apple, Snap and others could drive a mobile AR software user base in the hundreds of millions next year, and billions by 2021. Mobile AR software platforms could deliver over 4 times the number of users of dedicated mobile AR hardware.
All about that base
Some folks might be incredulous at these sorts of numbers. So let’s look at hard data on installed bases and conversion rates for the major players to get a sense of scale.
Facebook’s AR platform could be rolled out to Facebook Messenger’s 1.2 billion monthly active users, WhatsApp’s 1.2 billion MAU, and Instagram’s 700 million MAU. While it’s tempting to add these numbers together, significant overlap means that is too aggressive (i.e. Facebook doesn’t have 3.1 billion unique MAU). It’s more conservative to think about either Messenger or WhatsApp as a starting point for the number of unique users Facebook could try to migrate to its AR Platform. And Facebook knows what it’s doing when migrating users to new features. 15 percent of WhatsApp users use Status 10 weeks after launch, 29 percent of Instagram users use Stories less than a year after launch, and 54 percent of Instagram users use Direct 4 years after launch. Now that’s a growth curve.
But let’s not forget that Apple is expert when it comes to converting existing users to new software, with 86 percent of Apple’s nearly 700 million iPhones installing iOS 10 a year after launch. That’s a pretty compelling prospect for the rollout of ARkit.
Tencent has 846 million MAU for WeChat, and migrated 61 percent of them to use Moments every time they open WeChat 5 years after launch. While Tencent hasn’t formally announced its AR platform yet, it battled Alibaba in the mobile AR market earlier this year. Of Snap’s 300 million MAU, they’ve migrated 45 percent to Stories 4 years after launch. Snap doesn’t describe Lenses as mobile AR yet, but it’s still fighting a head-to-head battle with Facebook and Apple over mobile AR. And this is before considering LINE, Kakao, Snow, Baidu and more.
The platforms entering the mobile AR software market have billions of users. They’re great at migrating them to new features. If hard data is anything to go by, the only user numbers that make sense for mobile AR software platforms are big ones.
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