Digital Reality a Technical Primer

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Digital Reality a Technical Primer Digital reality A technical primer Approximately every decade since the 1970s, there seems to have been a major transformation in the technology industry. Each transformation is typi- cally illustrated by a leap forward in how we interact with and apply technol- ogy and data in our daily lives. The 1970s saw the initial transition from large mouse and the pointer. The 1990s saw the commer- mainframes in clean rooms to desktop person- cial adoption of the Internet, allowing the sharing of al computers, where interaction was facilitated data globally. In the following decade, the explosive through the keyboard and keystrokes. In the 1980s, success of the smartphone led to touch—and later, the introduction of the graphical user interface voice—becoming our primary interface. In this de- (GUI) allowed interaction with data through the cade, we are moving into the next transformation— Digital reality: A technical primer digital realityTM, where our means of interface is To comprehend digital reality, we need to un- expected to be the gesture, our emotions, and our derstand the concepts that it encompasses. While gaze.1 VR enables users to immerse themselves in artificial In this technical primer, we refer to the gamut of surroundings that portray actual places or imagi- augmented reality (AR), virtual reality (VR), mixed nary worlds, AR overlays contextual information reality (MR), 360° video, and immersive experience on the actual physical environments users see, thus capabilities as digital reality, except when alluding combining digital components and experiences with to the individual technology in its specific sense.2 real life.4 MR characterizes the controlled impact of In later sections, we define these technologies and the AR/VR and the Internet of Things (IoT) trends. describe their drivers, possible challenges in imple- MR brings together the virtual and real worlds to mentation, market potential, and some industrial generate new environments in which both digital applications. and physical objects—and their data—can coexist and interact with one another.5 360° video provides a new perspective that allows users to look in ev- Defining digital reality ery direction. This is achieved by shooting with an omnidirectional camera or a collection of cameras. Digital reality is generally defined as the wide Immersive experience creates a multisensory digital spectrum of technologies and capabilities that in- experience that can be delivered using VR, AR, MR, here in AR, VR, MR, 360° video, and the immersive and 360° video, among other technologies.6 experience, enabling simulation of reality in various ways (see figure 1).3 igure 1. The digital reality ecosystem Virtual eality CATS A DIGITAL NIONMNT that replaces the users real-world environment 360o Video Augmented eality POIDS A N PSPCTI OLAS DIGITALLCATD that allows user to loo every CONTNT direction into the users real-world DIGITAL EALIT environment Solves real-world business problems and creates new sources of competitive advantage Immersive Mixed eality CATS MULTISNSO, LNDS DIGITAL CONTNT INTO DIGITAL PINC T AL OLD and is delivered through any of and creates an environment where these technologies both coexist and interact Source Deloitte Consulting LLP, Consumer Technology Association. Deloitte Insights | deloitte.com/insights 2 Digital reality: A technical primer Building blocks of him/her identify the next action. Analytics, plat- digital reality form computing, and network can also be important components of an overall solution. Digital reality enables the seamless use of digital Method of presentation: An information information to make choices in real time as we ac- overload can overwhelm users, which could in complish tasks. turn lead to poor performance. The data provided The three key foundational elements that rein- should be sufficient but not excessive, depending on force digital reality (figure 2) are as follows: the complexity of the application. Much of the cur- Source of data: The process begins at the rent research into digital reality focuses on how to point where information is created, taking us out- present relevant digital information in increasingly side the territory of pure digital reality and into an- natural, easy-to-comprehend, contextual ways, so other connected technology, the IoT. Users of digi- that users can absorb it effortlessly.8 tal reality need to access digital information about Interaction with and use of data to drive the world in real time from various sources via sen- action: Even the right data presented in the right sors, and communicate that information so that it way would be of no use if it doesn’t create value. can be collected, evaluated, and acted upon, which digital reality not only enables the display of digital is what the IoT is all about.7 Enterprise data—cus- information, but also the control of it in increasingly tomer relationship management (CRM), enterprise natural ways. digital reality takes the comparison of resource planning (ERP), computer aided design human and machine one step further by enabling us (CAD)—can present the user with content and help to ponder the question: “What happens if humans igure 2. The core elements and technologies of digital reality 1. Source of the data 2. Presentation of the Sensors data Cameras Internet of Things Visual overlay Auditory cues Enterprise Data Live video Environment 3. Interacting with and using the data estures Voice commands ae and attention ser Source oe Mariani, renna Sniderman, Cary Harr, “More real than reality Transforming wor through augmented reality, Deloitte University Press, uly 31, 2017; adapted from the core elements and technologies of AR. Deloitte Insights | deloitte.com/insights 3 Digital reality: A technical primer and the machines collaborate?” It is fundamentally Virtual reality market about making the human-machine team work as • The global VR market was estimated at ~$3.7 naturally as possible.9 billion in 2016, and is forecast to reach ~$13 billion by 2019 (see figure 3).14 Increasing compatibility of smartphones with VR technol- Exploring the digital ogy, along with growth in the mobile gaming reality market potential market, are opening new opportunities for VR headset manufacturers.15 In order to understand the reach of the global • The VR market is further divided into hard- digital reality market in terms of numbers, we will ware and software categories. The hardware analyze the market potential of the core AR/VR/MR category accounted for ~85 percent of the total elements of the digital reality ecosystem. Although market in 2016, with gaming being the major the AR and VR markets comprise the overwhelming end-user segment driver. The software category majority of this core digital reality market, the MR comprised ~15 percent of the total market in market has begun to demonstrate potential, and the same year, driven by VR-enabled apps in may evolve in the years ahead. segments including music and entertainment, sports, and fitness.16 Augmented reality market • The global AR market was estimated at $5.2 bil- Mixed reality market lion in 2016, and is expected to reach ~$27 bil- • The global MR market was valued at ~$68 mil- lion by 2019 (see figure 3). The increasing pen- lion in 2016, and is forecast to exceed $300 mil- etration of 4G—and prospectively 5G, thanks to lion by 2019 (see figure 3).17 The advent of entry- strong government as well as industry support level VR headsets in the market and a marketing in various countries—are key factors in achiev- push by smartphone manufacturers have boost- ing this forecasted growth.10 ed MR market growth.18 • The market is further divided into three catego- • The market is further segmented into the hard- ries—smart glasses, mobile devices, and head- ware and software categories. The hardware mounted displays (HMDs) used for AR.11 Each of category (comprising HMDs, sensors, motion these categories is further divided into software, tracking systems, and haptic devices) accounted hardware, and platforms. for ~66 percent of the market in 2016, while the • Mobile devices accounted for ~48 percent of the software market, comprising integrated devel- market in 2016, and as the awareness and inter- opment environment (IDE), software develop- est in AR technology increases, users viewing ment kit (SDK), and web browsers, accounted AR content will likely increase with the develop- for the remaining 34 percent.19 ment of consumer-specific AR apps, and the rise • In terms of end-user segments, aerospace and in the number of phones integrated with depth- defense, automotive, and entertainment and sensing cameras. gaming accounted for over 70 percent of the • HMDs comprised ~36 percent of the mar- market, while the health care and retail and e- ket and are widely used in health care, aero- commerce segments accounted for the remain- space and defense, and commercial and ing market share.20 industrial operations.12 • Smart glasses accounted for ~16 percent of the market in the same year, with the enterprise sec- tor being the major adopter.13 4 Digital reality: A technical primer igure 3. Global digital reality market size billion broken by A/V/M core segments 2019F 27.2 13.1 0.3 2018F 15.1 10.3 0.2 2017E 8.5 7.6 0.1 2016 5.2 3.7 0.1 Augmented Reality Virtual Reality Mixed Reality Source Technavio, “lobal augmented reality maret20172021, 2016, p. 33; Technavio, “lobal virtual reality maret20152019, 2015, p. 19; Technavio, “lobal mixed reality maret20172021, 2016, p. 27 Deloitte Insights | deloitte.com/insights Key players in digital reality Enabling the digital reality market and addressing key In terms of key players, the digital reality space limitations to its growth can be divided into areas of activity: • Tools/content—platforms, apps, capture tools, The expansion of the core digital reality market etc. over the last few years can be attributed to a number • Application content—information from industry, of beneficial factors, some of which are discussed analytics, social, etc.
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