The Big Questions for AR’s Future

To help you understand the trends in AR and other new technologies and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Consider an augmented reality demo that is so impressive it sparks thoughts of Star Wars. You see stunning holograms and real-time digital information overlayed on a nearby table. You’re left with the impression that the tech has big challenges but is moving fast and could make headway in just two to three years.

No, it’s not Meta’s recent launch of the Orion headset prototype. It’s me testing out the Microsoft HoloLens in 2017. Back then, I wrote for The Kiplinger Letter about being “struck by how these first-generation wireless AR goggles worked so smoothly.” Cut to seven years later and Microsoft is discontinuing support for HoloLens with no public plans for future AR hardware.

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Times have changed, but AR challenges remain the same. The technical hurdles stem from the difference between AR and virtual reality. AR glasses are meant to be worn all day, with constant, unobstructed views of the real world. That means a lightweight, fashionable headset packed with sensors, computing power and long battery life. No easy feat, even for a tech giant flush with cash for research and development.

The splashy launch of Orion shows that Meta is all in on building a viable commercial product. The company has already found success with its low-cost VR headsets, which are popular with gamers. CEO Mark Zuckerberg sees AR headsets as an emerging computing platform, like the advent of smartphones, that gives users easy access to AI voice assistants and all sorts of useful digital alerts and information.

The Orion headset impressed those who tested it, but it’s still a work in progress. Demos include overlaying digital graphics about groceries on a table; a game resembling virtual ping pong; and a video call on a holographic computer screen. The company highlights the advanced optics, custom computer chips, miniaturized sensors and snappy wireless connectivity. But there’s no escaping the bulky look, low resolution and limited battery life. Other notable trade-offs include needing a wireless pack for extra computing power and having a wristband that helps interpret finger gestures. Plus, the current production cost is about $10,000.

Zuckerberg has put his money where his mouth is when it comes to his vision of the so-called metaverse, with Meta spending north of $50 billion to date on VR and AR research. Meta says that Orion is “a look at the very real possibilities within reach today” and to expect new AR devices in “the next few years.” It hopes to launch a device that costs around $1,000 at first and declines in price from there.

Meanwhile, Meta has found success with another form of smart glasses that includes cameras and microphones, but no in-display holograms. The Ray-Ban Meta glasses let users take photos or videos, answer calls and messages, listen to music and talk to an AI voice assistant. The glasses can give an audio walking tour as you stroll through a city or provide real-time translation of foreign-language text in front of you. Though much more limited than AR, they look like normal, stylish glasses and are a hit with many users. The competition isn’t sleeping on Meta. Apple surely has a prototype in its labs that is similar to Meta's Orion. Alphabet is likely to get back in the game after its early Google Glass project was nixed a decade ago. Even Microsoft will be eyeing ways it can build new AR software and hardware. There are smaller players, too, such as Vuzix, which sells headsets and underlying tech for business uses.

Expect Meta’s launch to intensify AR efforts at other companies. As Orion gets into the hands of developers, its flaws should help pave the way for more promising hardware. With that in mind, here are five pressing issues for consumer AR in the years ahead.

Five issues for consumer AR

• Finding social acceptance. There’s an obvious need for AR glasses that people are willing to wear in their daily lives for a long period of time. They should look as close to normal glasses as possible. A related challenge: Making the AR headsets socially acceptable for the masses. Besides design, that includes privacy and security, and plenty of marketing to convince buyers.
• Improving low-power chips. To go mainstream, the glasses should work without any extra hardware, even a nearby smartphone. That means low-energy, capable mobile chips that can last for hours on a charge. Qualcomm and big tech companies are working on such chips, but it won’t be easy. Especially early on, makers will have to decide how many features to sacrifice to beef up battery life.
• Finding killer applications. It could be messaging, fitness, music, social media or gaming, but AR glasses need compelling uses to win over skeptical buyers. One of Meta’s priorities is convincing software developers to create apps and content for its headset. It’s an ongoing chicken-and-egg conundrum of creating demand for both apps and users.
• Lowering prices. Meta’s goal of around $1,000 for a consumer device is still too high for mass adoption. Apple, too, is working feverishly to develop a commercial product at a cheap enough price. Don’t be surprised if businesses foot the bill for early editions of Meta’s and Apple’s AR headsets, paving the way for consumers.
• Tapping emerging AI. One of the reasons Meta is so bullish on AR headsets is the emergence of generative AI, which is vastly improving AI voice assistants. An always-on personal AI assistant is a potentially potent app for headsets. Users could ask it questions by voice command or even interact via subtle finger movements.

This forecast is from the team at The Kiplinger Letter, which has been running since 1923. It is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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