After a Slow Start, Smartglasses Could Be Poised for Success
Given the unfortunate demise of the Google Glass Explorer program, you’d be forgiven for thinking that the augmented reality (AR) smartglasses category is pretty much dead. First released in 2013, Google Glass quickly became a lightning conductor for privacy problems. This situation was made worse once people wearing them were labelled “glassholes” and it was only a matter of time before the program was abandoned.
Sales of Google Glass to the public ceased in 2015. However, Google has quietly continued to produce and support the product — but as far as we are aware it only supplies devices to selected companies.
Although Google’s smartglasses have seemingly done substantial damage to the reputation of this type of product in the consumer market, the past four years have seen plenty of interesting developments in AR bubbling beneath the surface in the business market.
In an effort to avoid similar mistakes to those made by Google with Glass, several companies producing smartglasses have been concentrating their efforts on uses for these devices in professional settings. They include Epson, Osterhout Design Group, Recon Instruments, Vuzix and others.
Beyond the hardware, companies specialising in business software for smartglasses have emerged. Two of the leading companies in this space are Ubimax and Upskill (formerly APX Labs). They work to create software for companies in a range of industries, including field service, manufacturing and material handling.
Over the past few years numerous companies have run trials of smartglasses, including Boeing, BMW, DHL, Intel, GE, Samsung, Toyota and Virgin Atlantic. In most cases, progress has been slow and deployments typically have failed to progress beyond anything more than pilot programmes.
CCS Insight’s research suggests that trials by logistics companies hold the most promise. All large organisations with warehouse operations in their supply chain — logistics, retail and fulfilment, for example — face similar problems and stand to benefit from using smartglasses.
In warehouse operations, picking is a costly and labour-intensive activity. Studies on this subject, suggest that in a typical warehouses, the cost of picking can be as much as 55 percent of the total warehouse operating expense, while about half of labour resources tend to be involved in the task of picking, in addition to packing and shipping. Any underperformance in order picking can lead to poor service and a high operational cost for the warehouse, which has a negative knock-on effect on the whole supply chain.
With so-called “vision picking”, DHL has been one of the pioneers in using AR to tackle the problem, in partnership with Google, Ubimax and Vuzix. In 2014, DHL conducted a small-scale pilot programme in one of its warehouses in the Netherlands, where it saw an improvement in the picking process of up to 25 percent. Replacing traditional hand-held scanners with smartglasses increased productivity, reduced error rates and produced an overall increase in employee satisfaction.
In 2016, the company rolled out the next phase of its vision picking programme by expanding it to more countries, including the US and the UK. The DHL Supply Chain division is now set to be one of the first businesses to implement AR glasses widely into its operations.
More recently, Intel conducted a trial of the technology at its Arizona distribution centre. It compared the performance of Intel’s Recon Jet Pro smartglasses and Ubimax xPick software with that of traditional handheld scanners. In 120 test picks, smartglasses were significantly more efficient: they achieved a 29 percent faster pick rate per box and made picking more ergonomic, as operatives could work hands-free rather than having one hand tied to operating a scanner.
Although there are several very promising field trials underway, mass deployments of AR glasses remain elusive. CCS Insight estimates that a mere 100,000 devices were sold in 2016 — and even this could be an optimistic number. The reality is that the focus on business uses and opportunities in specific industries means that selling smartglasses takes longer, exacerbated by the complexities of integration and compliance with safety measures. The market will take time to develop.
Our latest forecast indicates the first significant unit sales will not occur until 2019, when 1.5 million units are predicted to be sold. We forecast this will rise to 5 million units in 2021, with a total market value of $2.5 billion.
A large proportion of sales of smartglasses will be as a result of large-scale global roll-outs of projects, such as vision picking programmes, by companies in various industries including logistics and retail. It will take time, but this technology certainly has tremendous potential.
CCS Insight Global VR and AR Forecast, 2017-2021
A version of this article was first published by Essential Retail on 21 April 2017 and can be accessed here.
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