EXTENDED REALITY ENTERPRISE GROWTH OPPORTUNITIES SUMMARY

The worlds of sensors, automation, machine learning, computing and communications are each changing rapidly, while at the same time converging into an entirely new competitive arenas such as the extending realities driven by virtual and augmented reality technologies.

The way we interact with computers is evolving toward spatial computing, a transition as impactful as the mobile revolution.

Extended Reality (XR) is the blanket term for this new realm of immersive simulations, which is typically divided into three categories:

1. Virtual Reality (VR) immerses the user in an imaginary or replicated world (or simulates the real world) in a way that completely blocks out the real physical environment.
2. Augmented Reality (AR) layers or superimposes virtual images, video and sounds on the real world, which remains perceivable. This is most commonly seen in smartphone apps that show the real world in the phone’s camera with digital assets placed upon it. The “heads-up” displays of digital eyeglasses and windshields are other early examples of AR in practice.
3. Mixed Reality (MR) is a hypothetical combination of the two, which could involve experiences like a “virtual wall” superimposed on reality that a user could actually “bump into” or bounce a virtual ball against.

That said, there are a number of technical issues that remain to be resolved. XR visualizations are computationally intensive and require high-end hardware to produce lifelike real-time visualizations. Improvements in size, weight, battery life, and cellular technology must all be addressed for HMDs to become a widely adopted mobile computing platform. But this has always been true of digital innovation, and these are not sufficient reasons for any firm to lag behind. As we’ve seen in previous computing incarnations, hardware will quickly catch up to software requirements.

Key findings explored in this enterprise growth opportunity brief:

1. Extended Reality (XR) applications for Enterprise are rapidly maturing but are still in an early stage
2. Enterprise use of Augmented Reality (AR) and Virtual Reality (VR) technologies is expected to explode over the next 5 years
3. Iterative improvements across the XR ecosystem are making Enterprise XR solutions cheaper and more effective
4. Healthcare, Retail and Manufacturing will experience the highest AR/VR adoption rate over the next 5 years

5. For players looking to enter the Enterprise XR market, now is the time to start developing your solution

ENTERPRISE XR TABLE OF CONTENTS

1. Intro to Smart Systems and Extended Reality Growth Strategy
2. Enterprise XR Summary Findings
3. Enterprise XR Framing Trends, Applications and Use Cases
   1. Breaking Down the Extended Reality Universe
   2. Trends and Forces Impacting Enterprise XR
   3. Early Enterprise XR Adopters
   4. Enterprise XR Challenges
   5. Horizontal Use Cases in Enterprise XR
   6. Enterprise XR Market Map by Use Case and Industry
   7. Influence of COVID-19 on Adoption
   8. Horizontal Use Cases to Drive Vertical Value in Healthcare, Retail, Manufacturing, Construction and Architecture, Energy and Utilities, Professional Services, and the Public Sector
   9. VR vs AR in Enterprise Use Cases
   10. XR Device Market Trends
4. Evolving Competitive Structure and Business Models
   1. Enterprise Extended Reality Value Chain
   2. Software Players and Monetization
   3. Player Spotlights
      1. Apple
      2. OssoVR
      3. Strivr
5. Dimensioning and Targeting Growth Opportunities
   1. Top Industries and Use Cases by XR Spending
   2. XR Spending vs Consumer Spending
   3. Enterprise XR Hardware Market Size
   4. Vertical Profiles
      1. Healthcare
      2. Manufacturing
      3. Retail
6. Market Development Challenges and Opportunities
   1. Recommendations
   2. Next Steps for Further Analysis and Opportunity Capture

HARBOR’S METHODOLOGY

A Brief Overview of Our Standard Research Methodologies

Primary Research

Harbor conducts first-hand conversations with subject matter experts, potential buyers, and insiders. These conversations also give insights into the nuances of different customer needs and expectations.

Secondary Research

Harbor uses secondary sources, such as research reports and global databases to contextualize costs and benefits to different circumstances, scales, regions, and/or industries.

Academic Research

Oftentimes, the most accurate statistical findings that we leverage come from large university research departments, especially those with strong ties to private sector research and development.

Competitor and Sector Research

A decent portion of the information needed to position a certain technology for success can be found by analyzing competitor offerings and gaps. Knowledge about competitors within a sector and their selling habits gives Harbor unique insights into market and growth strategies.

Competitor Pricing Analysis

Price comparisons are a natural part of a client’s decision-making process. Insight into competitor pricing helps you identify the correct selling points to convey in your calculator.

Case Studies

Case Studies are great for understanding context and use-case applicability. They also provide qualitative insights into how certain technologies have benefitted their users.

Comparable Technologies

When you have a category-breaking new product or solution on the market, it is difficult to draw apples-to-apples comparisons with other deployments. In these circumstances, value-based comparisons come into play and comparable technologies should be considered.

HARBOR’S RELEVANT EXPERIENCE IN XR

Harbor Research has significant industry experience and a team with relevant expertise in Enterprise VR, B2B software (including 3D modeling), ecosystem and go to market analysis.

Enterprise VR Landscape and Audience Definition

Harbor worked with a leading technology supplier to co-develop a VR enterprise strategy that segmented, sized and analyzed both the enterprise user and developer communities to inform recommendations about what enterprises / decisionmakers, use cases, verticals (incl. Retail), developers and channel partners that technology supplier should target both today and tomorrow in order to best catalyze the enterprise VR market.

Outcomes

1. Prioritized enterprise user profiles & F500 companies based on market sizing, use case alignment and extensibility
2. Prioritized developer segments based on current content/use case focus, scale potential and future channel importance
3. GTM channel and partner recommendations with buying journey portrayals for enterprise decisionmakers

Retail Voice of Customer and Business Challenges

Harbor conducted a voice of customer assessment to understand current retail technology adoption, ROI and related pain points/challenges in retail environments. By interviewing ~30 retailers across regions and retail sub-segments (including top retailers like Nike and VF Brands for example), Harbor analyzed the impact of 3D modeling, AI and other technologies on ecommerce and in-store experiences.

Outcomes

1. Comprehensive list of retailer challenges and adoption dynamics of new technologies
2. Aggregation and reconciliation of extensive primary research key takeaways to distill common challenges across retail segments
3. Recommendations concerning product development and go-to-market strategy for addressing challenges and responding to adoption trends
4. Marketing and positioning recommendations based on current retailer needs

Other Relevant Work

For a large semiconductor supplier, Harbor analyzed the market for smart home devices and defined technical and user requirements for a new hardware development kit product, and size the overall opportunity based on demographics.

Harbor defined the market for social collaboration, contextual intelligence and product showcase/demonstration for a major technology supplier’s prospective AR/MR devices. Ultimately, this resulted in an analysis of that technology supplier’s entire VR/AR/MR portfolio, dividing up form factors to specific use case categories addressed to specific users.