From simply re-imagining conference calls to completely upending knowledge transfer in manufacturing, AR/VR/XR technologies can literally show us a whole new world.
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Welcome to the DeCoded podcast presented by GS1 US, where today's thought leaders help us crack the code on emerging technologies.
Reid Jackson:
Hello, everyone. I'm Reid Jackson, Senior Director of Corporate Development at GS1 US, and on today's show, we're going to be talking about augmented and virtual reality. Our guest for this episode is Tom Mainelli. Tom is the Group Vice President of IDC for device and consumer research.
Reid Jackson:
If you're not familiar with IDC, they are the International Data Corporation. They have more than 1,100 analysts worldwide, offering global, regional and local expertise on technology, industry opportunities and trends in over 110 countries. IDC's analysis and insights help IT professionals, business executives and the investment community to make fact based technology decisions to achieve key business objectives.
Reid Jackson:
And without any further ado, Tom, thanks for making the time and welcome to the show.
Tom Mainelli:
Hey, it's great to be here, Reid. Looking forward to a great conversation.
Reid Jackson:
Yeah, I really do appreciate you making the time. I know you're busy. It was hard to get this scheduled for the two of us to get together. But before we jump into the conversation around augmented reality, AR, and virtual reality, VR, can you just give the audience a little background on yourself and let us know how you got to where you are today?
Tom Mainelli:
Sure, happy to do so. I've been covering technology for the better part of the last 25 years. I started off in tech journalism, writing about technology and helping first consumers and then corporate buyers understand what was going on in the world of tech.
Tom Mainelli:
And then since 2006, I've been with IDC, as you mentioned, the market research firm. And so I switched from writing for the end user to helping the companies that serve the end user, understand what's going on in the market.
Reid Jackson:
That is quite the journey. I love the aspect of the consumer side and now the corporate side, servicing the consumer, because it's always important to know your buyer, your audience, if you will.
Reid Jackson:
So today, we're going to be talking about AR and VR. But before we jump into that, one last question. You have other teams that look at other technologies. Can you share with us what some of the other top technologies you guys are looking at today? And then a second part to that question is, is there any bleed over or crossover or complementary work?
Reid Jackson:
One question I have that I'm hoping we're going to get into today is, how is 5G going to impact AR and VR? But does IoT, artificial intelligence, computer vision, are these other things you guys are looking at and do they impact AR and VR in any way?
Tom Mainelli:
Yeah, absolutely. So here at IDC, I lead a team of analysts in the US and in Asia, that covers a wide range of topics. That includes devices like PCs, smartphones, tablets, wearables, smart home, and a few other categories. And other technology categories like gaming and video streaming, et cetera.
Tom Mainelli:
And then personally, I've been focused, really focused the last three, three and a half years on AR and VR. I think you've hit upon something that is super important. And it's that all of these categories are actually going to feed into augmented and virtual reality.
Tom Mainelli:
At a very base level, for example, virtual reality, really, it's been around for decades, right? But part of what has made it viable has been the explosion of the smartphone market. Because the displays that are being produced in volumes of billions have made it possible to create high resolution displays that can be used in VR headsets. And so one has definitely fed the other. We see augmented reality for the consumer really starting off on the smartphone, with Apple, iOS phones and Google Android phones, driving AR experiences for consumers.
Tom Mainelli:
And then to your point, I think VR and IoT and we can get into those a little more deeply as we go, both of those things are going to feed capabilities when it comes to augmented reality use cases and eventually viability, I think.
Reid Jackson:
Awesome, awesome. It seems just logical that a lot of these things are inter feeding each other, when we look at them as independent technologies, but we don't realize on the back end how they're really helping each other out. And there's this symbiotic ecosystem, if you will, of play.
Reid Jackson:
And it's amazing how you'll see one shift happen. We were just having a conversation last night internally on some stuff and I said it comes down to timing. Right place, right time, right technology, right situation. There's lots of little luck things that come into play.
Reid Jackson:
The simple example, MP3s were out for a long, long time, tons of MP3 players. I had two or three before I had an iPod, but the iPod with the Mac and iTunes, it was subtle little changes, but everyone had already learned already about MP3s. So there was some education coming in that helped the acceleration and adoption of iTunes and iPods changing the way we listen to music and share music.
Tom Mainelli:
Absolutely true. And one comment I would make to follow on that thread, you mentioned IoT, the Internet of Things. And inside the industry, that has been the hot topic for the better part of the last five or more years. I like to think of augmented reality as the way we humans are going to see into the IoT. So each of these objects is connected to the internet, whether it's a heavy machinery, or just a sensor in a parking garage, is throwing off data, right? And augmented reality is going to be how we humans often see that data coming off of a device or a machine.
Tom Mainelli:
So for example, if your job is to service a big piece of machinery that's out in the field somewhere, once that piece of machinery is connected to the internet, data is going to be coming off that machine. Those workers are going to walk up to it. And whether it's in a headset like a HoloLens or using an iPhone and pointing it at the device or pointing it at the machine, that's how we're going to see some of that information and how we're going to react and respond to the information that's coming out of the IoT.
Reid Jackson:
Yeah, I think that's an excellent point. All the sensors that are out there, some of them don't have lights on them. You don't even know it's a sensor. But using augmented reality, you'll be able to get a new lens into all the data that's coming off it. That's an excellent point. Excellent point.
Reid Jackson:
All right. So let's take one little step back. And let's talk about AR, VR, how you define the two. And then there's this little thing that's out there that keeps popping up and it's XR, if you could talk about that as well.
Tom Mainelli:
Sure. The way I think about virtual reality is when you are having a virtual reality experience, you are stepping out of your actual reality and into a virtual environment. So everything that you see is created and displayed on a screen in front of your eyes.
Tom Mainelli:
And so VR is not something that you can put on and walk down the street, because you won't make it very far. You can't see what's going on around you. And so VR use cases are really driven by putting someone in a completely new reality and obscuring their real reality.
Tom Mainelli:
Augmented reality, as the name implies, you can still see what's going on around you. But you are augmenting that, and in some cases, that's with very rudimentary data, messages, heads-up displays, et cetera. But at the very far end of that, at the most extreme end of augmented reality, we're actually taking digital objects and placing that into your actual reality.
Tom Mainelli:
And AR is typically driven through displays that you can see through. Or, in the case of consumers, you're holding your phone up and you're looking at the screen, but the phone is using the camera that's pointed out at the world. We're starting to see some use cases where they're using cameras on VR headsets that point out at the world, that try to bring together both digital and the real world. But augmented in the end, as its name implies, is adding information to your existing reality.
Tom Mainelli:
And then XR is often used by companies and folks inside the industry to represent extended reality, which is all encompassing. If you go from reality, through augmented reality, to completely virtual reality, there's this span of different realities and extended reality tries to encompass all of them.
Reid Jackson:
So it's mashing the two of them together, kind of like this past holidays, one of the kids, I have three kids, one of their friends came over and they had the new Oculus. I thought it was just a virtual reality thing. And he's like, hey, Mr. Jackson, how are you? And he had the headset on. I'm like, how can you see me? How did you know I was here? He goes, oh, there's four cameras on the front of it.
Reid Jackson:
So like some programs use those four cameras and create a virtual world for me and other games I play are just virtual and I can't see outside.
Tom Mainelli:
Yeah, XR is really trying to encompass the continuum. I think that Oculus example is a good one. Oculus is marketed and is really focused on driving a virtual reality experience. And those cameras were originally placed on those VR headsets, so that when you were in the VR experience, you didn't run full tilt into a wall. It would recognize that there was an object in front of you. But now Oculus and others are beginning to leverage those cameras to try to drive an augmented experience inside a VR headset.
Tom Mainelli:
I think when we think about this continuum of VR and AR experiences, I think that's one of the things that you're going to see as we get farther down the road that those experiences are going to blend and merge. And companies that have traditionally been focused on VR will start to offer AR experiences, and AR companies will work their way backwards towards VR and future headsets will drive both experiences.
Reid Jackson:
Yeah, yeah, that's a good point. So let's build off of that a little bit. I think most people out there, their experience with AR or VR has really been two date from what I have seen, unless you're a specialist in a certain industry, but for most of the general public, it's been around gaming or entertainment. There are folks in engineering, 3D modeling, developing. There's also folks in some of the support industries for manufacturing that have been using AR and VR type solutions to service planes and jet engines and other systems. Whether it be very large, complex HVAC systems for large buildings.
Reid Jackson:
But what are the most popular use cases that you're seeing utilized today? And then what are some of the ones that you're seeing that are coming, haven't really exploded onto the scene yet, but you're expecting them to?
Tom Mainelli:
Yeah, I think you mentioned a lot of them. I think right now, it's illustrative to think of VR and AR separately. So to your point on the VR side of things, the consumer experience really has been focused on content consumption and gaming, right?
Tom Mainelli:
But what we've seen a lot of folks in that industry do as they wait for more consumers to come to VR, is pivot towards commercial use cases. And for VR, that really does tend to focus on design, manufacturing, and then probably most specifically on training.
Tom Mainelli:
What I do expect to see VR evolve into on the commercial side is collaboration. So when we think about all those awkward video calls, video conferences, people talking over each other, et cetera, you can imagine a situation where an expensive headset would create a situation where it feels more like you're sitting around a conference table, as opposed to being in different cities and everyone trying to get a word in.
Tom Mainelli:
On the AR side of things, where we've seen most of the action on the commercial side of things has really been on the see what I see video conferencing, putting experts who are in the field, in touch with someone back at HQ, who can walk them through a complex task. A lot of service related scenarios, you mentioned that. Oftentimes, it's about bringing up information that you need to have in front of you.
Tom Mainelli:
We've seen a lot of interest in products that are making it possible for service personnel to work hands-free, whether that's on a factory floor, in a repair shop, et cetera. Anywhere where you can take a phone out of someone's hand and let them do their job, using both hands, I think has a real opportunity with AR.
Tom Mainelli:
I think probably the most interesting and compelling, near term opportunity that we're just starting to see bubble up when it comes to AR, is this concept of both knowledge capture and knowledge transfer. And one of the driving factors there is, around the world, we've got entire segments of workers who are reaching retirement age, and they have knowledge and processes in their heads that only they know. Their companies are panicking because they know these folks are headed towards retirement and they need to figure out, how do we get this out of their heads and into a form that the next generation of workers can learn from?
Tom Mainelli:
So people are starting to utilize augmented reality headsets to capture those processes, and then document those processes, and then just as importantly, teach the next generation of workers how to do these things. And one of the things that I think we've really begun to realize is that employees learn differently. Everybody used to have to go through the same process, whether it was a paper manual or an apprenticeship or three years on the job, et cetera.
Tom Mainelli:
Now, with AR and VR, the technologies are going to let people learn in new ways, and it's going to accelerate that knowledge transfer and really help a lot of companies, who I think if the technology didn't exist would be in a real bind.
Reid Jackson:
I couldn't agree more. I think it's really going to change the way that we educate and train our workforce. I was at a conference in Boston a year and a half ago, and I was blown away with some of the AR solutions that they were putting forward. If you think about traditional learning and the way it's been conducted, not even computer based training, you can throw that in with traditional learning. Because it's sit down in front of a computer, open up a textbook, open up a three ring binder, have a teacher moderating or leading the class.
Reid Jackson:
But let's just say it's a half day, a day, a week or whatever, and you're going and you're doing all this, and then you have to go back and actually work on it and practice it and get some things going. And if you don't use the knowledge that you learned right away, we all know you forget most of it, right? If you don't implement it right away, you forget most of it.
Reid Jackson:
So now think of, for a company, let's just say like GE for their service staff. They send their folks to be trained on how to work on either engines or refrigerators or any of these things. And then they have to go into the field and do this.
Reid Jackson:
And to your point. Now those folks, could be moving up to retirement phase, but now I don't have to send them, they don't have to take time out of the field. And they could have an AR solution, where they show up, look right at the engine and it says the reported problem was this X, Y, Z thing is faulty. Move to your right because X, Y, Z is located to your right, below this panel.
Reid Jackson:
I experienced this, they walked me through. I was standing in front of a mock-up of an F-16 fighter jet engine. And they had me run through a whole process. I didn't know Philip from Paul in that scenario and walked me through it. It blew my mind with, when I thought back to, oh my gosh, how much money is spent on hotels, airfare, out of the field time and then lost knowledge because we did the project, but then we didn't have another project for six months? And then therefore, the person we sent, who is the knowledge expert, only had one time in the field with it. So they're really not the knowledge expert. It really blew my mind.
Reid Jackson:
Are you guys seeing more and more of that in certain industries?
Tom Mainelli:
Absolutely. I think you've really hit on something there that I think the rest of the world is learning, and why we are so optimistic about the role these technologies is going to play.
Tom Mainelli:
I heard a stat once, and I'm not going to quote it verbatim, because I'll get it wrong, but it was effectively engineers at this large company, spent a third of their time trying to track down blueprints for machines that were built 20 years ago. And if you can associate a digital blueprint to a device or to a machine when it's built, and whether it's five years from now or 10 years from now, when you walk up to it, that becomes available to someone in AR, you've just saved a huge amount of time.
Tom Mainelli:
To the other point you made about the training aspect of it. The example you gave is training up people on important jobs, but maybe not super skilled jobs. But then you think about training a doctor or training someone to operate $1 million machine that you absolutely cannot take out of production to train on. If you can train them up in VR or walk them through processes in AR, not only are you saving time, but you're saving money. You're keeping that important machine in production. Doctors are learning how to do what they need to do, not in the operating room, but before they get there.
Tom Mainelli:
I think it's a flywheel. Companies will look at this, they'll figure out the very specific areas where they know it can help them today, but then you get it into the business and you've got other line of business folks looking over the cubicle wall saying, well, I see he's using that for training. But, man, I would really like to use that in marketing, et cetera. There's all of these knock-on effects that entire industry is going to wake up to as it starts to propagate.
Reid Jackson:
So that spot right there of, it cascades across to other environments and other things. I often have people ask me you're GS1, you represent GS1 US, you're a standards not for profit neutral body, why do you care about this stuff? And I said, with this AR topic here right now is, think about the grocery store. I am just a customer in the grocery store, and I have a gluten allergy. I need to walk down the aisles but I have to read every package.
Reid Jackson:
What if I could pick up my phone, walk down the aisles and we're running proof of concepts on this right now. And some people have them in quasi production. But you walk down the aisle, and it immediately tells you this product has a red dot and this product has a green dot, because we already know, because we've recognized the image, we've read the barcode or the QR code or some other identification that we're doing. We tie it back to ingredients and so on and do that.
Reid Jackson:
But now, that same environment, its similar platform of AR can be used by the employee to make sure that restocking is done, that you walk down the aisles super fast and realize, we're low on inventory. We need to pull this in. And then there's the planogram compliance for brands that they have. So brands are benefiting, employees of the supermarket are benefiting and the consumer is all benefiting from the same platform.
Tom Mainelli:
Yeah, and I think one of the most exciting pieces of all this, that people are going to come to realize, you kind of alluded to it, right? You're utilizing known information. You're just surfacing it.
Reid Jackson:
Exactly.
Tom Mainelli:
And one of the things that I think is super interesting is that a lot of companies, they have... let's talk about, I'll use an example, I travel a lot. You wake up early in a hotel room, and you're staring at this very strange coffeemaker. You're not exactly sure how it works, because it's not like one you've seen before, right? What if you could just point your phone at it and get instructions, right?
Tom Mainelli:
That may sound odd. Coffee makers aren't that hard to work, but-
Reid Jackson:
But they are.
Tom Mainelli:
Yeah, they can be and the company that manufactured that wants it to work for you. They have instructions, right? They just don't have them attached to the device. But what if they were attached to it virtually? They have a CAD drawing of that device.
Tom Mainelli:
And that's really the point I want to make is, every physical object in the world was designed and manufactured. There are CAD drawings for almost all those things. And so part of what's exciting about AR and VR is we can leverage existing documentation to drive better experiences. So we don't have to reinvent the wheel.
Tom Mainelli:
Now, there are lots of objects, 20 year old machinery, where the blueprints have been lost. And you basically have to scan that today, to bring it into a virtual or augmented reality setting. But the vast majority of technical objects today, there's a 3D drawing of that somewhere and we can utilize it.
Reid Jackson:
Yeah, I think the other thing I just want to point out, you were alluding to in a different aspect of this is that a lot of new things are created in what I consider a vacuum. I've been involved with technology for 25 years myself, and I've seen a lot of startups, I work with startups on a weekly basis. I've done some startups myself, and I just love the whole entrepreneurial thought process.
Reid Jackson:
But what I see time and time again is it's I need to be secretive, I need to build this, but I'm not looking at the full, full picture. So you talked about the data is already there. But I see a lot of groups that will make a solution and then they'll create a whole new dataset. They'll create a whole new nomenclature. So we have repetitive systems, repetitive databases, repetitive procedures, that are all addressing the same thing. We're not leveraging that one to many.
Reid Jackson:
That's why we as corporate development and innovation at GS1 US are constantly meeting with new organizations for one of two reasons. One, educate them on some standards that they could leverage. There's already an identification systems out there, global trade identification number, it's been in play for over 45 years. You could leverage that, instead of creating your own to track an item.
Reid Jackson:
But is there something new that you guys are doing that's so net new, like, oh, wow, this is a new way of tracking location? It's not X or Y or Z axis, it's something completely different that augmented reality is using, and therefore, maybe we do need to create some new standards. But are you seeing a similar scenario? Do you experience it where they're creating too much in a vacuum with some of these new solutions or are you finding that teams today are better than that and they're reaching out or is it kind of a mix?
Tom Mainelli:
It's definitely a mix. I think you've hit upon something that has certainly been, for lack of a better word, a drag on progress here, right? Because if everyone is reinventing the wheel, what you end up with is a bunch of wheels and no cars.
Tom Mainelli:
And so one of the things that I think has been instructive, if you look at the SDKs that were created around augmented reality, one of the first was Vuforia, it was a Qualcomm company acquired by PTC. And a lot of the phone based augmented reality experiences years ago and through today are based on that.
Tom Mainelli:
And then you had Apple launch AR kit for iOS, works in conjunction with Vuforia, then you had Google launch ARCore. And really what these big companies are doing is putting forth a set of tools, so that everyone isn't constantly reinventing the wheel to do those very basic things. I think what we'll see, and part of what's going to cause this industry to finally take off is we have to arrive at a set of tools, a standardized set of tools. Everyone needs to agree that this is the way we're going to do X and Y.
Tom Mainelli:
One of the big challenges in front of us around augmented reality is the interface mode, right? If we're no longer typing on a QWERTY keyboard or tapping on our smartphone glass, how are we going to interact with these digital objects? And that's still very much a work in progress, but ultimately, what made smartphones go was we all agreed that this is what would happen when you tapped on the glass, right?
Tom Mainelli:
There can be wrinkles, and you add value by doing new and interesting things-
Reid Jackson:
But this is the standard way.
Tom Mainelli:
Yeah, a common set of rules is going to be increasingly important as this grows.
Reid Jackson:
No doubt about it. And just for everyone out there, I'm a huge fan of open source. And we know a lot of folks are leveraging open source, but even the teams I meet with, they're leveraging best practices in open source, but it still amazes me, I'm like, you guys know you just asked finance for another X number of dollars to create a database that two other teams in your organization have the same information. It happens every single day, every single day I see it.
Reid Jackson:
I want to go back to one thing you mentioned before on collaboration. I was watching with my kids the other day, the Kingsman, it's movie, one of those kind of James Bond-ish from Europe type scenarios, special techniques, the kids liked all that. But in the movie, they sit down at a conference room table. No one's at it except one person and he puts on glasses. And now at every other seat, there's another person and they're talking like everyone's in the room.
Reid Jackson:
Is this the collaboration thing that you're thinking of with augmented reality and getting us back to, who just joined the line? Who's there? Can you announce yourself, did somebody drop, all that stuff?
Tom Mainelli:
Yeah, no, absolutely. And the thing that I think is interesting about it is, that scenario is certainly a little ways off, but it's within the realm of possibility. And what I like about the idea and the concept is we can all agree that not everyone is going to have an AR or a VR headset at home, right? So you're going to have some people that are sitting in a conference room at the office that's got cameras all over the room, there are going to be some people that are on the bleeding edge, that have a high end headset and some folks are going to be using their phone. But we can actually bring all of those things together in a future scenario, where you utilize the technology you have.
Tom Mainelli:
One of the most interesting demos that I have been a part of recently, just prior to the HoloLens 2 launch, Microsoft was demonstrating that new product. And there was three of us in HoloLens headsets. But then there was also two people on either side of us, who were experiencing the same presentation through their smartphone. So they could see the same digital objects through their phone.
Tom Mainelli:
I think that's really going to be key, right? Not every company is going to roll out headsets to every employee, not everybody is going to embrace virtual reality or augmented reality. Part of how this collaboration ramps up is you prove the value, but you make it accessible across a wide range of devices.
Reid Jackson:
Last year, I sat in a meeting with Accenture, and they were working with a client and showing them how they could enhance their sales. And what they did is they took a very similar scenario, they had one person in the room that had a VR headset on, and then everyone else was able to see these large monitors of what they were seeing.
Reid Jackson:
And they said, think about how you sell airplanes, because this was the customer. And you can't bring everyone to the hangar to see the airplane. We can't really bring the airplane to you. But we could come to your office, sit down and one person could see the whole thing. And then in the middle of it, it was like this is kind of cool and then hit me. It's like, okay, here's the airplane, traditional airplane that we all fly on. What if there was no first class? And all of a sudden, internal that they were looking at had no first class, it was all regular seats.
Reid Jackson:
What if everything was first class? What if one side of the plane was first class and the other side wasn't? All of a sudden within one minute, they showed five different scenarios that really prompted different thinking.
Reid Jackson:
And then they said, okay, now let's take a look at the airports that you arrive at 90% of the time. This is what the gates look like. In order to accommodate this, look at our wing architecture here. We can't fit into this scenario. Because they had the 3D blueprints that you talked about before, they pulled those in, they overlaid their plane on top of it and they looked at a couple different scenarios.
Reid Jackson:
So one minute we're inside talking about colors and aisle design and everything and the next minute, we're outside the plane, underneath it, looking at a wing next to a gate. This was like a 45 minute presentation of the what if, utilizing VR in sales. It was super impactful. Super impactful.
Reid Jackson:
Are you seeing this other areas?
Tom Mainelli:
Yeah, absolutely. And I think that's one of the bleed over areas, right? Where HR has brought it in, but now marketing, to your point exactly. I market heavy machinery, I can't throw it in the trunk of my car and go to my customers and pull it out and show it to them.
Tom Mainelli:
But then, even after the sale, one of the primary use cases of AR and VR in the early days was people using it to set up manufacturing lines. How do I fit this new 20 ton piece of machinery into my existing process? And what do I have to move around? And where does this go and how do I get it in? And does it come in this wall? How do you make sense of things that are beyond scope in a 2D setting?
Tom Mainelli:
I think one of the other things that I find super exciting about both AR and VR is not only does it help bring alive stuff that's hard to comprehend in 2D, I think it's going to drive just fundamentally new ways of thinking about data, about information. I like to say for the last 30 plus years, we humans have kind of contorted ourselves around the technology that we need to do our jobs. Whether it was typing on a QWERTY keyboard, tapping on a smartphone piece of glass. We have had to adapt to the technology.
Tom Mainelli:
And one of the things that I think is super exciting about AR and VR is we can start to make the technology adapt to us. So if you're a visual learner, you can have a visual presentation. If you tend to learn in other ways, you can adapt what you're seeing and viewing to the ways that you learn best.
Tom Mainelli:
But probably more importantly, we're at the very leading edge of this. We don't have developers yet developing apps that have leveraged this, but you and I probably spend a disproportionate amount of time in something like Excel, right? And Excel is a powerful tool, but we've had to learn how to use it.
Tom Mainelli:
My son and daughter may look at giant datasets that we look at in Excel in very different ways. And they'll be able to recognize the signal for the noise in very different, very visual ways. I think AR and VR are going to drive that.
Reid Jackson:
I think that's a great point. Tableau came on the scene a bunch of years back and really changed the way that data is visualized. And now, you're saying that AR will even take that further, I could absolutely see that.
Reid Jackson:
I want to change gears here just a little bit, in the essence of time. When you and I were at CES, I was at your breakfast, where you had your analysts get up and it was a great event, by the way. What I loved about the event was that the first hour we got to sit down at tables and have a very relaxed interaction with your different analysts.
Reid Jackson:
I was lucky enough sitting at your table, but you made a comment that it struck me funny at first, and then it started to make a little more sense. And it was, you made the comment that AR and VR will most likely take the path of PCs in corporate America and then to the home. And for me, I was like, what are you talking about? It's in the home already. I'm seeing my kids have a VR headset they play games on.
Reid Jackson:
But then it kind of struck me. I was thinking of a lot of technology today is at the home, and then comes into corporate America.
Tom Mainelli:
Yeah, absolutely. I think it's important to note that you're absolutely right, that in a lot of ways, consumer demand and desire is driving corporate purchasing today. 10 years ago, when you started a new job, they gave you a beige box PC and said best of luck. We'll be back in five years to give you the next one of these. And today, people demand and receive really consumer centric designs and all of those things.
Tom Mainelli:
But to your point, back in the day, when the first experience most people had with a PC was at work, and they probably set one up on their desktop and that's how they got their job done. And there wasn't a ton of desire to have them at home, because the use cases were fairly limited at the time.
Tom Mainelli:
And then the internet came along. And then all of a sudden, the PC was the primary way-
Reid Jackson:
Everything changed.
Tom Mainelli:
Everybody accessed the internet. And first it was to look at content, and then to shop and then all the other things that we use the internet for.
Tom Mainelli:
And so I think, to your point, that augmented in particular, but both augmented and virtual reality, a lot of people are going to experience those things either at work, they'll get trained up in one of those technologies. They'll use it some of the time.
Tom Mainelli:
The reason why augmented reality has grown in the enterprise space is headsets are expensive. And the software you need to run those headsets is expensive, but companies can very quickly realize the ROI. Whereas the consumers today-
Reid Jackson:
They can justify that.
Tom Mainelli:
Yeah, if you think about consumers and AR, there's lots of funky apps that you can try on your phone. But none of those things are really driving a must-have use case yet.
Tom Mainelli:
And so I think a lot of people will experience this at work, they may see service personnel, the guy who comes to set up their table. The guy who comes to fix the dishwasher will have one of these headsets on, they'll see them using it. And all of that is basically setting the table for at some point down the future, when we get to consumer grade headsets for AR that don't cost $3,000, $4,000, $5,000. When Apple ships its first pair of Apple Glasses, et cetera.
Tom Mainelli:
All of these experiences will prime the pump. And we'll also have applications that are focused on the things that consumers want to do, versus what the enterprise wants to do. So I really do think there's an argument to be made that, with of course the next couple of years, we'll see a huge amount of adoption in this stuff on the commercial side of things, and that will help feed eventual consumer adoption.
Reid Jackson:
What do you think are some of the hurdles that are holding back the technology today? Is it compute power, is it form factor? Is it something else that we may not be thinking of?
Reid Jackson:
Because the numbers for AR and VR sales of solutions, they're not that big in comparison to PCs, smartphones and even smart home IoT devices like an Alexa DOT or a Google Home.
Tom Mainelli:
So I think it's instructive, again, to look at VR and AR separately. So with VR, you can make the argument that the technology is good enough. And of course, someone will say that's not true. I can still see a screen door effect. It's not completely immersive. It's not perfect, but arguably we're pretty close.
Reid Jackson:
It's close enough.
Tom Mainelli:
And right now on the consumer side of things, it really is a bit of a chicken and an egg problem, in that you don't have enough consumers buying it, you have early adopters buying it, but there's not enough of an install base to have... you'll have a lot of triple AAA games, for example, because the game vendors won't pour millions of dollars into a game when there's just tens of millions of install base users, right?
Tom Mainelli:
And so you've got a little bit of a chicken and egg problem there. Which is I think a lot of VR vendors have shifted towards commercial, because there, it's not a matter of having an install base of a billion people. You just need enough companies who are willing to pay for software and services that will keep the company running until you reach lift off on the consumer side of things.
Tom Mainelli:
On augmented reality, there are lots of technical limitations. There's a couple of different ways to approach the process of augmenting everyone's reality. As I mentioned, you have see-through lenses, you can use opaque lenses, where you have cameras pointed outward. But in the end, one of the challenges with augmented reality is you're trying to take these digital objects and place them in the real world and there's just a myriad of technical challenges there. And there's just the challenge of, again, the chicken and the egg of, how do you get critical mass and enough people who will spend the money to make that happen?
Tom Mainelli:
And so I think from a augmented reality perspective, we talked a little bit about 5G at the very beginning. I think that has the potential to be one of the drivers from a technical perspective, if you think about input, output. 5G is going to bring more bandwidth and lower latency.
Tom Mainelli:
And one of the things that you have to have when you are putting images in front of a human being is low latency, because if it's off by tens of milliseconds, then all of a sudden, your body thinks, okay, something's not right here. I think 5G will be a driver. But a lot of this is just, we've got to put the work in and companies like Microsoft and Magic Leap and Google and Apple are spending just tons of money to push the science forward to create these devices that people are going to want to use down the road.
Reid Jackson:
Yeah, because I think everybody's still going, hey, when are we going to have that Minority Report movie experience, where Tom Cruise walks into the mall and it's like, hi, Mr. so and so, because he just had his eyes replaced and the computer vision is reading who he is, but then it's giving him advertisements based on, these are augmented reality advertisements based on who he is. And so you think we're still quite far away from that solution happening?
Tom Mainelli:
I think we will get it in bits and pieces. The listeners haven't had the opportunity to either watch a video of the HoloLens 2 or even better, get a demonstration of it. It's an amazing piece of technology. It is a huge leap forward from the products that they shipped us a few years ago. But that's still a $3,500 product, right?
Reid Jackson:
That's the issue.
Tom Mainelli:
Ultimately, yeah, in a company, a $3,500 headset that saves you $2,000 in the first week, it's a no brainer. But consumers aren't going to walk down the street with a HoloLens on top of their head. What they want is a pair of glasses that look an awful lot like the glasses they wear today but shows them all this magic.
Tom Mainelli:
I will say your comment is one of my biggest concerns about augmented reality. I cannot think of something more frightening than walking down the street and being inundated with augmented reality ads for every store that I pass. Here's a coupon for this. I think we talked a little bit about standards, but at some point that's going to be one of the things that we have to address is, who's going to control what I see? And how do you prevent me from taking them off and stomping on them? Because all I want to do is look at my map and I don't want to be inundated with ads every 50 feet.
Reid Jackson:
And on the flip side, the advertisers, it's hey, I paid for this sign or I paid for this space and I'm walking down and they're showing me Coca-Cola, you're walking down, they're showing Pepsi, my wife walks down, and it's some iced tea product that's from another company. They're scared as well. It is really something that, we want the convenience and we want the help, but at the same time, we're going to have to find some ways to have some control parameters around some of this.
Reid Jackson:
I was meeting with Deloitte, this goes back five years now, which is scary. That's scary to me. But it truly five years ago, I was meeting with Deloitte, I was in Nashville, Tennessee. And we were talking about some big data analytics solutions and how we could tie all these things in, it was a big project. You'd walk into a building, the building would know I'm Reid and I'm here. And through the big data connections, we would know, hey, you're working on X, Y and Z projects. And Tom's in a room and he's an AR, VR expert.