Glasses half full? Three key trends shaping Augmented reality experiences in the US

Ericsson’s ConsumerLab report Augmented Tomorrow: AR Experiences Beyond Smartphones and AR Filters revealed consumer expectations and needs in the evolving Extended reality (XR) landscape. Drawing on that research and recent industry developments, we can identify three key AR trends that are reshaping how the consumers in the US interact with the digital and physical worlds:

• Smartphones remain central to the AR experience in the US and their role is evolving. Once simple gateways to AR, smartphones are becoming sophisticated platforms that bridge the physical and the digital worlds and empower AR content creation as well as consumption.
• US consumers are demanding stylish, mobile AR solutions for out-of-home use.
• The convergence of Artificial intelligence (AI), specifically Generative AI (GenAI), and AR could be the catalyst that brings XR into mainstream life.

Trend 1: Smartphones - Still the favored platform for AR in America

Despite the buzz around stand-alone AR devices, smartphones continue to dominate the AR landscape in the US. Our ConsumerLab report found the proportion of 5G users who regularly use any type of AR applications has risen from 15 percent in 2021 to 38 percent in 2023. This increase signifies that individuals are now spending an additional 50 minutes per day interacting with applications featuring AR capabilities in the US. This surge reflects the growing appetite for AR experiences among US consumers.

A growing ecosystem of smartphone-based AR applications are already revolutionizing online shopping experiences. Retailers such as IKEA, Walmart and Target allow users to visualize furniture in their homes before buying, using AR to place true-to-scale models of products in any space. L’Oréal’s ModiFace technology displays the power of AR in the beauty industry, offering virtual try-ons, skin diagnostics and personalized product recommendations.

For navigation, Google Maps Live View overlays walking directions and location information directly onto the real world, easing users’ interactions with their environments during travel.

In gaming, the accolades go to Pokémon GO, the phenomenon that has captivated 150 million monthly users and generated more than USD 900 million in a year[1], at its peak.

Tethering is not ideal but can elevate AR experiences

The ubiquity of AR-capable smartphones in American pockets means they remain the primary gateway to AR experiences for most users. However, the smartphone AR experiences are limited, with a small flat screen that poses strain on arms while using AR applications and makes users feel awkward in public spaces. Moreover, the immersion is at a minimal level.

Connecting an AR device to a smartphone could be the way to go. Our research shows that seven out of ten US consumers are open to the idea of tethering AR glasses to their smartphones. This willingness suggests we take a pragmatic approach by adopting new AR form factors that leverage the processing power and connectivity of existing devices.  Looking ahead in the next five years, the number of consumers who foresee combining smartphones with AR devices for AR experiences will double in the US.

Recent developments in the US market support this insight. For instance, Qualcomm's Snapdragon AR2 Gen 1 platform, designed for next-generation AR glasses, emphasizes a distributed processing model that works in tandem with smartphones. This approach allows for sleeker, more comfortable AR glasses while maintaining the smartphone as a critical component of the AR ecosystem.

Trend 2: On-the-go AR - Americans demand mobility…with style

The desire for mobile AR experiences is reshaping consumer expectations and industry direction in the US. Our research indicates that 68 percent of US consumers anticipate using AR or Mixed reality (MR) devices on-the-go within the next five years. More portable and versatile AR solutions will be needed.

Notably, US consumers are willing to pay a premium for this mobility. On average, they would pay 10 percent more—and, in some locations, even 35 percent more—for AR devices that can be used outside the home. Consumers clearly place a high value on the potential of mobile AR experiences to enhance their daily lives .

Beyond the smartphone to achieve full mobility and freedom

The emphasis on mobility is influencing the types of AR applications that resonate with US users. We're seeing a shift in range of AR experiences from purely informational uses (such as real-time translation and navigation) to more interactive, location-based experiences (for example, location-based tourist applications, concerts and sport events). Companies in the US are developing and trialing such applications. For example, AT&T has developed the 5G Game View app, which enhances the experience for women's basketball fans, demonstrating the potential for AR to transform how Americans engage with live sports and events.

Similarly, Google has made significant strides in advancing location-based AR experiences through Google Maps. Available in selected cities in the US, “Immersive View” or “AR experience” on Google Maps allows both tourists and locals to view detailed 3D images of iconic landmarks and access historical information, either on location or remotely. As technology continues to evolve, more consumers will benefit from enriched, location-based AR experiences that seamlessly integrate digital content with the physical world.

While current mobile networks are sufficient in supporting consumers’ needs for AR applications in general, with the increasing availability of the location-based applications, particularly when deployed in high-traffic locations such as busy shopping areas, arenas/concert venues, or airports, the demand for 5G network will increase.

Going beyond the smartphone-tethered scenario to provide full mobility and freedom for consumers, Ericsson's D-15 Innovation Lab in Santa Clara is pushing the boundaries even further. In collaboration with US industry leaders, the lab has demonstrated how 5G can power untethered, high-fidelity XR experiences. Imagine walking through Times Square or the National Mall, your AR glasses seamlessly blending digital information with the physical world around you—no cords, no constraints.

“How do I look in these AR glasses?”—it’s form, function AND fashion together

Here’s something else we discovered: technical capabilities and mobility alone are not enough to gain traction in the marketplace. Style is equally crucial for US consumers. Our report found that 35 percent of current AR device users in the US have significant concerns about their appearance and social perception while wearing these devices. Sixty-one percent of the US consumers stated they wouldn't wear AR or MR devices in public if they weren't visually appealing.

This emphasis on style is evident in the success of Meta's collaboration with Ray-Ban. Their smart glasses, which blend classic design with modern technology, have gained fans in the US market. Similarly, the XREAL AR glasses have made headlines by offering a lightweight and fashionable design that supports a variety of AR experiences, from gaming to movie-watching to productivity. As of January 2024, XREAL had shipped over 350,000 AR glasses worldwide and snared a market share of 51 percent of the global AR segment.[2]  

As AR devices become more fashion-forward, we can expect to see increased adoption and public use across the US. These glasses highlight the industry's push towards creating AR devices that are not just powerful but also integrate with the user’s lifestyle.

Trend 3: AI and AR convergence - A game-changer for American innovation

The integration of Artificial intelligence (AI) with AR technologies is poised to revolutionize immersive experiences in the US. Recent advancements, such as OpenAI's GPT-4o multimodal AI model, are opening up new possibilities for natural, context-aware AR interactions.

Envision walking down a bustling street in New York or San Francisco, your AI-enhanced AR glasses providing real-time immersive navigation, and personalized shopping suggestions—all tailored to your preferences and needs. This fusion of AI and AR has the potential to transform how Americans navigate their cities, interact with businesses and consume information.

US tech giants are already making moves in this space. Apple's Vision Pro, while primarily focused on mixed reality, incorporates advanced AI for hand and eye tracking. Meta's Ray-Ban glasses aren't true AR devices, but they do incorporate Meta AI, highlighting how artificial intelligence can significantly enhance the functionality and attractiveness of AR glasses for consumers.

The concept of “generative AR”—AR powered by generative AI—is particularly exciting. By leveraging large language models and computer vision, future AR devices could offer real-time, AI-generated content overlays on the physical world, personalized for the wearer. Imagine the advantages for fields like education, where students could see historical events unfold before their eyes, or healthcare, where AI-assisted AR could provide doctors with instant, contextual patient information.

Conclusion:

As we stand on the cusp of widespread augmented reality adoption in the US, evolving consumer demands, technological progress and artificial intelligence integration are converging, creating unprecedented opportunities. The telecom industry stands at the crux of this transformative moment. To deliver these kinds of immersive experiences everywhere, we must have robust networks ready for unprecedented demand and business models for catering to that service. These developments in AR and immersive technologies are leading to a monumental shift in how we see, experience and interact with our world on a global scale. Find more expert insights in our ConsumerLab report Augmented Tomorrow and blog post.

Users in the US are about to perceive and interact with the world in profoundly new and exciting ways. It’s up to us to make what’s possible. 

References

1. Annual revenue generated by Pokémon GO worldwide from 2016 to 2023 

2. XREAL Ships Industry-Leading 350,000 AR Glasses, Takes 51% of Worldwide AR Market in Q3 2023