AR/VR market consolidation and big new visions go hand in hand
In the past, the evolution of markets would happen in sequences, in waves of consolidation and innovation. In today’s high-speed markets, these waves of consolidation and innovation arrive faster and increasingly happen simultaneously. One example in this context is the market for AR/VR solutions.
PTC and TeamViewer lead the consolidation of the AR platform market for connected workers
These platforms increasingly have the ambition to not only allow connected workers to perform physical tasks by providing them hands-free instructions via smart glasses, but to also give them just-in-time quality feedback (digital or expert-controlled) and automated quality recording. TeamViewer, a German provider of remote connectivity solutions, took two steps over the last 18 months to drive consolidation of the market for AR platforms for connected workers. In July 2020, TeamViewer announced the acquisition of Germany-based company Ubimax, and in March 2021, it announced the acquisition of US-based company Upskill. In February 2022, PTC announced that it had acquired large parts of Germany-based AR specialist RE’FLEKT. While no details of the deal were disclosed, we believe that the majority (80-90%) of RE’FLEKT’s IP and team have moved to PTC under this agreement. This means that four leading vendors in this market back in 2020 (PTC, RE’FLEKT, Ubimax, and Upskill) have now been consolidated into two dominant players – PTC and TeamViewer. While these platform vendors certainly dominate AR in the industrial space today, we expect to see increasing competition with vendors such as Microsoft, AWS, and Google in other industries. However, consolidation isn’t only happening in the AR-related industrial space, but also in other areas, such as vehicles. In February 2022, HARMAN, a connected car-related subsidiary of Samsung, acquired Apostera. Germany-based automotive technology company Apostera focuses on the transformation of car windshields into mixed-reality screens where navigation information can be displayed. Apostera’s AR solution will become a central part of HARMAN’s digital cockpit product portfolio.
The metaverse hype
Everybody is talking about the metaverse, which represents a new vision for the AR/VR market. COVID-19 and social distancing were the short-term triggers for employees to leverage digital collaboration tools in all aspects of their daily work. This shift will not be reversed, because climate change leads to growing pressure on companies to reduce their carbon footprints wherever possible, incl. in business travel. While tools like Zoom, Skype, and Teams certainly do have some limitations with regard to efficient collaboration in all areas, we’re seeing the emergence of a new universe, the metaverse. It stands for the vision of a digital universe with many different virtual worlds, where people can “live” an immersive, real-time experience. Big companies such as Facebook (now Meta) and Microsoft expect the metaverse to replace the web as we know it; in the near future, the metaverse will allow to hold virtual conferences, search the web, shop items, and meet people. As the metaverse is basically the reinvention of Second Life, it remains to be seen whether the time is right now. We expect that it will take some more years to get close to the bigger vision of the metaverse, but we certainly observe some first “islands” (e.g. gaming in B2C) already today. We expect innovative companies to start exploring the short-term opportunities of the metaverse in B2B. With the emergence of new offerings such as Microsoft Mesh for Teams, NVIDIA Omniverse, Cisco WebEx Hologram, and Oculus Horizon Workrooms, companies will start experimenting. They will try applying AR/VR to improve human interaction and collaboration. Initial use cases we expect to see are centered around large and complex construction projects (airports, train stations), innovation and design thinking workshops, onboarding workshops for new hires, and virtual fairs, events, and showrooms.