Augmented reality on mobile to generate $732 million by 2014, driven by mobile apps and mobile advertising

HAMPSHIRE, UK: A new report from Juniper Research has found that the market for mobile augmented reality (AR) services is expected to reach $732 million by 2014, with revenues derived from a combination of paid-for app downloads, subscription based services and advertising.

The Mobile Augmented Reality report found that annual revenues from AR are unlikely to exceed even $2 million during 2010, due to the fact that only a small minority of smartphones will be AR-enabled. However, this proportion will rise dramatically in the medium term, the result of increasing adoption of Android handsets and iPhones, along with greater deployment of AR enablers such as digital compasses and accelerometers by other leading vendors.

Although initial service adoption will be driven by AR location-based search, Juniper Research expects the first substantial revenues to be derived from AR-enabled games, bolstered by revenues from mobile enterprise solutions from 2012-3 onwards.

Meanwhile, AR advertising is expected to be increasingly attractive to brands and retailers as the potential user base increases, with AR ad networks able to charge higher CPC and CPM rates because of location relevance.

However, the report cautioned that while AR geotagging presents a wealth of opportunities, providers and enablers must carefully consider the potential legal implications of enabling such services.

According to report author Dr Windsor Holden: “The problem is that the embryonic nature of the technology means that we have no legal or regulatory framework in place which specifically covers augmented reality. For example, can a house-owner legitimately demand that a geotag of his or her property be removed? Would that third party require prior permission before creating a tag?”

Other findings include:
• Incremental revenues from subscriptions, upsold content and licences will together comprise the largest AR revenue stream by 2014, overhauling point of sale revenues.
• 350 million handsets expected to be AR enabled by 2014.