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XR technology is forecast to rocket from a market value of $55 billion in 2023 to $490 billion by 2030 which holds both a promise and a puzzle. While business to business use of XR has taken hold, consumer applications have failed to move beyond the hype.
“There is some real value in the enterprise, but we are in a novelty phase for the consumer,” said Bob Titus, CTO, Netcracker Technologies. “That doesn’t mean we won’t, but after the hype of two years ago we are not there yet in B2C.”
In 2022, you couldn’t move at Mobile World Congress for someone talking about the Metaverse. In 2024, mention of it is near absent. AI may have obliterated all discussion. But does that mean the XR bubble has burst?
“You couldn’t walk ten steps without seeing the Metaverse a couple years ago, and the promise of everything it was going to deliver for consumers such as individual experiences and making transactions with blockchain,” observed Yusuf Tayob, Group Chief Executive for Operations at Accenture. “Is it time to assess the actual impact versus the theoretical potential of XR?”
There actually isn’t much value for the mobile industry in current iterations of consumer VR because it is all conducted over Wi-Fi in the home.
“There are no 5G-enabled headsets, period. Nor is there likely to be since VR happens in doors. Out of home is where it gets interesting for mobile and where we need to provide connectivity,” said Leslie Shannon, Head of Trend & Innovation Scouting, Nokia.
ROI in B2B XR
The situation is markedly different in B2B. Nokia recently commissioned EY to survey XR in industry and found about 10% of companies in US and Europe using some kind of XR already.
“What is remarkable is the gap between those thinking about using XR and those already using it,” Shannon said. “The actual return on investment was higher than the expectations of companies which have yet to try XR. This is first time in my knowledge that a technology is exceeding expectations of business return.”
Another study, this time with Deloitte, found the average number of use cases in business by companies was six. “You start with one or two and then other departments see the benefits and want to use it for reduction in travel, for example,” she said.
Apple’s launch of Vision Pro not withstanding, the clunky, power draining and heat generating form factor of current VR/XR headgear is limiting mobility.
“Widescale adoption won’t happen until the form factor is correct,” Titus warned.
However, GenAI could accelerate XR development in B2B and B2C. “GenAI has a tremendous capacity to create content and transform the XR business by providing more realistic 3D animation and personalised experiences,” said Sabri Albreiki, CTO e& International.
“Marrying XR with GenAI will be one of the most powerful and transformative technologies in the next decade,” agreed Shannon.
However, the processing power required of GenAI cannot be incorporated into a device and worn by a person. The smartphone is already running into compute limits.
“AI will become distributed,” said Titus. “The connectivity needs to link the consumer with the AI that resides in the cloud. For that you need the low latency and high speed of 5G.”
The form factor for XR has to be very mobile. It will be glasses and a connection to your sim card and distributed data processing.”
The questions boils down to who is going to own it. “Will our industry take it quickly enough, or will it all be AWS and Azure?” posed Nokia’s Shannon.
“We are very risk averse as an industry [about] the whole idea of managing computing located in the network. But if we don’t take it someone else will.”
Netcracker’s Titus agreed saying “We need to think beyond basic monetisation.”
He said, “Yes, we need to build subscription into use cases and charge for consumption. But also offer data management and security and localised LLM as a service. Service providers can become aggregators of the ecosystem of how these services all come together and ensure they extract value out of that XR marketplace. That is the opportunity.”
The mobile industry is eyeing the convergence of 5G with AI to unlock potential for XR applications out of the home. The underlying technology of Mobile Edge Compute (MEC) is quite mature. MEC is the near real-time processing of large amounts of data produced by edge devices and applications closest to where it’s captured. Scenes can be rendered in the network and XR content can be delivered directly to headsets with minimal local graphics processing.
An example is Amazon Wavelength, a service that embeds AWS compute and storage services within a carrier’s 5G network paving the way for ultra-low latency applications.
“From ultra-low latency services enhancing AR and VR to enabling smart cities, 5G plus AI will open up unprecedented possibilities,” claims Anthony Goonetilleke, Group President for Technology and Head of Strategy at Amdocs.
He pointed to the potential of “significant transformation” in telecoms, manufacturing, transportation, smart cities, and in retail. The latter, which involves AI-assisted recommendations made to a customer in realtime while browsing a store, is perhaps the nearest the next phase of 5G will come to a mainstream consumer out of home XR experience.
Monetising media and entertainment while on the go still needs its killer app.
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