NETWORK STRATEGIES

REAL-WORLD VIEW
Mobile operators are starting to find their feet in a new market segment, but the places in the value chain are still up for grabs. By Anne Morris

AUGMENTED REALITY

fforts by mobile operators to tap into the augmented reality opportunity have to date been few and far between and it is still unclear exactly what role they will have to play in the value chain. But with analysts predicting a sizeable revenue opportunity in the space over the next few years, some telcos are starting to take the bull by the horns. Augmented reality promises to enrich the experience of the mobile user thanks to its mix of real-world views and superimposed visual information such as sound, video, graphics or GPS data. So far, AR usage has been limited to gimmicky and fun applications such as games and marketing applications, while large brands like Amazon and eBay have implemented standalone AR-based applications to help drive product awareness. As is often the case with new technology, there was also a great deal of confusion initially about what AR actually is, and many companies used the term incorrectly for marketing purposes. The initial hype and confusion surrounding augmented reality is now past, and the technology is ready to enter the mainstream, according to Spains Telefonica, which is at the vanguard of AR development. In future we will not even need to say AR, says David Marimon, initiative leader at Telefonicas research unit, Telefonica I+D. The term will phase out. Soon it will become a normal part of our usage. In addition, there have been AR efforts from operators like Bouygues Telecom in France and Japans NTT DoCoMo. But while analysts predict rapid growth for the sector, the statistics show that the market opportunity remains small at present. Juniper Research predicts the mobile AR market will be worth $1.47 billion by 2015, with location-based services and games accounting for over half that sum (see chart). The following year, its worth

will be double that, according to ABI Research. If the [AR] market develops as we expect, it will generate more than $3 billion in 2016, says ABI Research senior analyst Mark Beccue. But the market barely exists today. In 2010 revenue amounted to only $21 million, says Beccue. Its not a mass-market proposition by far, says Craig Cartier, ICT analyst at Frost and Sullivan. A lot of the apps are just new ways of looking at a cool map, he says. Early leaders in the AR space are companies like Layar and Metaio, which have launched augmented reality browsers to expand the AR capability on smartphones. And Qualcomm now provides an AR software developer kit for AR-based applications on Android smartphones, with a big focus on games. However, these efforts alone will not drive the sector to become a multibillion-dollar opportunity. The AR market wont get there if it is limited only to dedicated AR apps such as early entrants Layar and Wikitude, Beccue adds. Mobile AR functionality and capabilities will improve rapidly and new platforms are emerging to enable app developers to build AR capabilities

into all types of apps. This movement will rapidly advance the growth of mobile AR, Beccue says.

Monetising AR
From the point of view of the mobile operator, it is unclear what role if any they will have in the AR value chain, not to mention if and how AR-based services and applications can be monetised. So far, mobile operators have made only limited moves to embrace augmented reality. Telcos will just treat AR as another application category, says Cartier at Frost and Sullivan, noting that mobile operator efforts to beat software developers at their own game have not been a shining success, as exemplified by moribund cloud synchronisation and back-up service Vodafone 360. Cartier sees some potential for operators with in-app billing or partnerships on niche applications, but says its not clear how far such measures would go beyond pure marketing. Operators that have dipped a toe in the AR market have largely done so as application or software developers, or have promoted services developed by third parties, according to a paper published in February by the Telco 2.0 Initiative founded by consultants STL Partners. Telcos are unlikely to corner the market by seeking to develop a key technology, the consultants wrote in the paper. Instead, they should look to leverage their position as the discovery and delivery segment, an essential part of the ecosystem for subscribers to discover many AR experiences. However, while this differentiates telcos from other market segments and generates greater sales of higher margin devices, it doesnt offer great monetisation directly from AR. Telcos that have done more than think about AR include Bouygues Telecom of France, which released mobile AR look-up
7

Mobile AR market 2015

Social Networking 2%

Enterprise 23% Lifestyle & Healthcare 10%

LBS 26%

Games 25%

Education & Reference 6% Multimedia 8%

Source: Juniper Research

December 2011/January 2012 www.totaltele.com

NETWORK STRATEGIES

Headline an augmented reality test case MobiAR:

MobiAR is a project consortium led by Telefnica I+D with the collaboration of Indra, Brainstorm, Fomento de San Sebastin and LabHuman Vicomtech-IK4. The objective of MobiAR was the development of a tourist information service platform based on mobile augmented reality and using existing smartphones. Users of the service are able to display rich information about what they are seeing, superimposing virtual information on real world elements. MobiAR is an Android service platform that handles location-based information and user preferences and takes advantages of computer vision technologies to determine user interests. The user points the mobile camera in any direction and observes the reality captured by the camera superimposed with certain points of interest. Users then select a point of interest by touching the screen, and a number of available multimedia elements are then immediately displayed on the screen, such as description, comments, images and video. User evaluation of MobiAR was carried out over three days during November 2010 in San Sebastin, Spain, with the collaboration of the city council. Around 25 points of interest were generated in the La Concha Bay, Old Town, City and Boulevard. Each point of interest that appeared on the screen was associated with multimedia content such as photos, videos, texts or three-dimensional reconstructions, and it was also possible to obtain historical photos of the city. The number of points of interest is set to increase in future as shop owners also add their data to the system. The MobiAR platform was also trialled in Valencia over one day in order to test multilingual capabilities and interaction with 3D content. Around 15 points of interest were selected in the Spanish city.

There is potentially a bigger end game for mobile operators if they act quickly enough
service Ici Info in November 2009, which features more than 900,000 unique points of interest (POI). And Japans NTT DoCoMo provides the intuitive navigation service chokkan nabi to its subscribers. Telefnica I+D, meanwhile, has developed and patented proprietary visual recognition technology that forms the basis of IRIS, a visual search service that it is now licensing on a commercial basis to third parties including Layar, BuzzAR and Metaio. The AR software developers are implementing IRIS into their browsers to enable users to discover relevant augmented reality content more easily. Telefonica was in a position to partner to provide its IP in a commercial relationship in 2010, says Marimon, who is heading up the operators AR developments. IRIS employs image recognition technology and thereby reduces ARs reliance on GPS technology for the provision of object-relevant data. IRIS provides information related to an object by taking a picture of it; this also means that the
8

object needs no special packaging, tag or marker. Telefnica I+D has also brought its visual recognition technology into the Spanish MobiAR project, which is a government-funded collaboration among a number of players to trial AR services in the tourism sector (see box). The technology is used to enable the recognition of buildings by using existing image databases such as Google to correct the information provided by GPS, thereby

A different angle
A new solution that aims to help operators manage their networks using augmented reality highlights a further interesting use of mobile AR: user guides. In September SunVizion unveiled its AR-based telco Network Inventory that allows its users to capture, store and manage all key data about their network infrastructure, configuration, status and performance. The solution can also be employed to enable field workers to locate all the objects they are to work on with all necessary information about them using a mobile phone.

enabling users to access information relevant to buildings of interest. Analysts welcome the move by Telefonica and its strategic partnerships with AR browser companies as a key development for mobile AR. When AR started it was based on GPS, which can be really imprecise, says Cartier. This proved to be a dampener on user experienceimage recognition technology is a very important piece of AR. Marimon says Telefnica views AR as an intuitive way to deliver contextual services, and this is what the company has been focusing on in its research. However, Telefnica provides no direct AR-based services to customers as yet and, according to Marimon, turning MobiAR into a commercial product is not currently on the roadmap largely due to the issues surrounding high data roaming charges that would preclude the use of the service by foreign tourists. The project was mainly research, Marimon says, and it has helped to identify weaknesses, although he declined to specify what they were. Marimon was also unable to provide any further information at present about Telefonicas future AR development plans. We cannot talk about future plansbut its broader than visual search, he says. Both Marimon and Beccue of ABI Research take the view that there is potentially an even bigger end-game for mobile operators with AR, if they act quickly enough and get ahead of the overthe-top players such as Google. As the technology becomes more advanced, operators could play a role in the realisation of the Internet of things, says Beccue. The basic idea of the Internet of things is that every single object has data attached to it; Beccue says telcos could be the logical players to realise this by indexing objects, thereby creating a catalogue and a search engine. The other clear role that operators would have is to provide the communication between objects and devices. Someone has to do all that, and mobile operators could be the ones, he says. n
www.totaltele.com December 2011/January 2012

Copyright of Total Telecom+ is the property of Terrapinn Holdings Limited and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.