New report highlights opportunities for quick-footed operators
Despite advances in virtual, augmented and mixed reality devices in recent years, an undercurrent of frustration has run behind the technologies, which are collectively known as extended reality, or XR. It often feels that although XR has promised a lot, a piece of the puzzle has been missing. This hasn’t been helped by companies that have built huge hype and then struggled under the weight of massively inflated expectations.
I’m optimistic that this is about to change, and that the pieces of the XR puzzle are coming together.
New XR headsets are slimmer, lighter and more powerful than previous iterations, making for a better user experience. This trend should only continue as manufacturers refine the technologies used to build their headsets. Alongside this, the roll-out of 5G networks will provide the infrastructure for a new wave of mobile edge computing. This means that new XR headsets will be able to use 5G split rendering, taking advantage of high-throughput, low-latency connections for processing and streaming content. Consequently, more attractive XR experiences will be available to all, thanks to improved hardware.
Getting this right will have huge value throughout the entire XR value chain, and I believe one of the groups that stand to benefit most is network operators, which have a huge window of opportunity to stake a claim at the centre of a new era of mobile computing.
As operators build out their 5G networks, users of compatible connected devices will benefit. XR devices have the chance to stand out here, thanks to the opportunity to deliver a raft of brand-new applications unique to the technology. This could provide customers with a far more persuasive reason to upgrade to new network services, and open up new hardware and services revenue streams for operators.
To shed light on this, CCS Insight, in partnership with Qualcomm, has published a report, Mobile Extended Reality and 5G: The Operator Opportunity, available to download for free here. The report examines the opportunity for network operators at the intersection of XR technologies and 5G networks. It explores operators’ current efforts and their plans for the future, and is underpinned by a mix of publicly available information and research from our own interviews with key executives at operators working on these projects. They include Deutsche Telekom, EE, LG U+, NTT DoCoMo, SoftBank and SK Telecom; the report shares specific information about their activities in the XR space. Insights are presented alongside our view of the global XR market and our forecasts for adoption (since publishing this blog post, we have updated the report with our latest projections for the XR market).
The common thread in our conversations with a range of network operators is that XR isn’t a small-scale project or a gimmick. Globally, several operators have already made significant moves into building XR services and generating revenue from them, a trend we expect to continue throughout 2020 and beyond. They’re making serious investments spanning virtual and augmented reality in both consumer and enterprise services, and we expect this to continue.
Although I’ve previously cautioned against the idea that the current health crisis will lead to a short-term rise in adoption of XR headsets, in the longer term the technology may benefit from being in the spotlight, as it can offer innovative solutions for remote working, socializing and much more.
This isn’t the first time that we’ve drawn attention to XR as an opportunity for operators to fuel adoption of 5G services. However, our report shows that operators have moved beyond the phase of theoretical discussions, experiments and tests, and are now actively building XR into their road map for the future, with real strategic focus. Each operator is looking to use XR in a way that fits with its wider goals and objectives, understanding the value of being a first mover into this new field. The question now is how many others will follow.
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