How Big is Mobile AR’s User Base?

Like many analyst firms, market sizing is one of the ongoing practices of AR Insider’s research arm ARtillery Intelligence. A few times per year, it goes into isolation and buries itself deep in financial modeling. One such exercise zeroes in on mobile AR revenues.

This is one of the main subdivisions of spatial computing — others including headworn AR and VR. They’re all related and share technological underpinnings, but are driven by separate market forces such as their respective hardware bases (see methodology and inclusions).

So what did the mobile AR forecast uncover? At a high level, global mobile AR revenue is projected to grow from $10.5 billion in 2023 to $21.5 billion in 2028, a 15.4 percent CAGR. This sum consists of mobile AR consumer and enterprise spending and their revenue subsegments.

Drilling down, our latest Behind the Numbers installment looks specifically at mobile AR compatibility. How many devices are ready to handle AR experiences? And among those, how many do so regularly? This is the foundation for mobile AR’s business opportunities.

Scale & Influence

One confidence signal for mobile AR is the sheer size of the smartphone installed base. Compared to the uphill battle that AR glasses face, mobile AR — though challenged in its own ways — has an easier climb due to “zero-cost” hardware (the device you already own).

But more important than the overall smartphone base is the growing share of that universe that’s AR-compatible. Given platform fragmentation (see below), the size of that universe can best be framed by its biggest channel, web AR, which has 3.21 billion AR-compatible devices.

As for the other platforms on that list, Meta’s Spark AR is estimated to have 2.9 billion AR-compatible smartphones, followed by ARCore (1.66 billion), ARkit (1.44 billion), TikTok (1.23 billion), and Snap (825 million). Visual search (e.g., Google Lens) operates on 3.12 billion devices.

But more important than AR compatibility (a.k.a., installed base) is active use. There, the estimate is 1.03 billion by the end of this year growing to 1.19 billion by 2027. These figures count AR users who engage monthly or more and are de-duplicated, given several platforms.

The Billion Barrier

One question that arises from the above is how AR active users have broken the one billion barrier. This is considerable, given that it’s roughly 1/7th of the world’s population. Anecdotal evidence or a “gut check” doesn’t necessarily support that much AR usage seen around us.

One reason for the usage volume is visual search. This includes tools such as Google Lens, Pinterest Lens and Snap Scan, which let users hold up their phones to identify real-world items. It’s a growing use case for both general-interest searches as well as (monetizable) shopping.

Supporting that are disclosures from Google that it reached 10 billion visual searches per month. Propelled by Google’s broader scale and influence, this figure steered ARtillery’s estimates that visual search users are 890 million globally — exceeding all other platforms above.

Generally speaking, visual search checks many of the boxes for potential killer apps. It’s a utility with an inherently frequent use case (just like web search). It takes that familiar web search use case and makes it more visual, which resonates with camera-native Millennials and Gen-Z.

Sleeping Giant

Synthesizing the above two sections — AR compatibility and active use — it’s notable that there isn’t necessarily a correlation between the two. For example, web AR leads in compatibility but trails in active use. That gap is a mark of growth potential and ample headroom.

TikTok is in a similar boat with promising reach, but its AR play is just getting started. Snap Lenses conversely have the lowest compatibility among platforms (825 million) but high active monthly use (495 million). This gives it the greatest ratio of AR usage (60 percent).

Meta meanwhile has broader AR reach (given both Facebook & Instagram), but a smaller ratio of AR users (9.5 percent). Instagram could be the ace up its sleeve given a cultural match with camera-forward users, and natural monetization with its product discovery use case.

Lastly, back to visual search, its inclusion of Google Lens, Pinterest Lens, Snap Scan, and others gives it the leading position among active users. For the reasons above, it could be AR’s real sleeping giant in its utility and web-search-like user intent (read: monetization).

We’ll pause there and circle back in the next Behind the Numbers installment with more findings from this forecast. Meanwhile, see the entire thing here.

Originally published at https://arinsider.co on May 28, 2024.