The business guide to AR and VR: Everything you need to know

An executive guide to the technology and market drivers behind the hype in augmented reality, virtual reality, and mixed reality.
Written by Greg Nichols, Contributing Writer

Overhyped by some, drastically underestimated by others, few emerging technologies have generated the digital ink like virtual reality (VR), augmented reality (AR), and mixed reality (MR).

Must read: VR and AR: The Business Reality

Still lumbering through the novelty phase and roller coaster-like hype cycles, the technologies are only just beginning to show signs of real world usefulness with a new generation of hardware and software applications aimed at the enterprise and at end users like you.

On the line is what could grow to be a $160 billion AR/VR industry as soon as 2023. Here's what you need to know.

SEE: Mixed reality in business (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)

What is virtual reality?

Virtual reality is a broad term for a multi-sensory computer-generated experience that allows users to both experience and interact with a simulated environment.


According to the Virtual Reality Society, the technology has thematic roots in the stereoscopic viewers of the 19th century. Decades of research into immersive (albeit non-interactive) cinema gave way, in the 1960s, to early experiments in what were then called "artificial environments," primitive computer-generated worlds users could actually navigate.

Also: Sound is the next frontier for virtual reality

By the 1990s, virtual reality was a mainstay of popular culture thanks to movies like The Lawnmower Man (1992) and early gaming headsets from Sega and Nintendo.

Today, commercially available virtual reality headsets incorporate features such as haptics, motion and location sensing, and high-res 3D graphical displays that come close to real-world visual fidelity. Major players like Google, Microsoft, and Facebook are heavily invested in the technology.

What is augmented reality?

Unlike virtual reality, which seeks to immerse the user in a completely virtual environment, augmented reality enhances the real world using digitally produced perceptual overlays.


The first head-mounted AR display was created at Harvard in 1968, but it wasn't until 2008 that AR saw its first commercial application in the form of a BMW magazine ad that allowed users to hold a printed page in front of a computer camera to produce an on-screen image.

Since then, augmented reality has been a mainstay of marketers in the form of QR codes that unlock AR content. Early AR applications for smartphones and personal computers targeted consumers by allowing them to do things like try on products. However, the technology's first breakout consumer successes have come in gaming, starting with Pokemon Go.

Though still early in the adoption phase, augmented reality is expected to have a massive impact on daily life through a variety of consumer and enterprise applications, with some predicting AR technologies will be more pervasive and important than the internet. 

What about mixed reality?

Mixed reality refers to a kind of augmented reality in which graphical visualizations are projected so as to appear as though they're interacting with the real world. An oft-cited example is Magic Leap's visualization of a 3D whale jumping out of a gymnasium floor, an effect made possible thanks to augmented reality headsets worn by the viewers.

Also: Ready for takeoff: Airbus's sweeping mixed reality redesign

The hardware

There are many types of hardware used in AR, VR, and MR applications, including haptic suits and niche devices that allow the visually impaired to "see" with their tastebuds.

However, for most consumer and enterprise applications, the hardware for virtual reality typically constitutes a headset, such as the HTC VIVE, Oculus Go, or Sony PlayStationVR.

For AR and MR applications, the hardware may be an AR-enabled headset, a pair of AR glasses, a mobile device like a tablet, or a wearable like a smart watch. All major smartphone manufacturers are anticipating the growth of AR and many have begun equipping their latest models with components to support that growth, such as Snapdragon mobile processors and active depth sensing packages -- essentially mini-LiDAR. Apple and Google have jumped into the AR and MR race with dueling SDKs -- ARKit from Apple and ARCore from Google.

In the future, we'll certainly see streamlined AR glasses, and likely contact lenses further down the line.

Is there a difference between the hardware used by enterprise customers and consumer market users?

There are enterprise-only headsets from the likes of DAQRI, but more and more we're seeing enterprise AR/VR applications running on consumer hardware. The same Microsoft HoloLens is being used by Honeywell to train technicians that's used by gamers to complete crucial missions, for example.

Which will be bigger, AR, or VR?

Augmented reality will have a bigger impact on the market and our daily lives than virtual reality -- and by a long shot. That's the consensus of just about every informed commentator on the subject.

Also: Your next business computer: HoloLens 2 TechRepublic

The reason is that VR environments by nature demand a user's full attention, which make the technology poorly suited to real-life social interaction outside a digital world. AR, on the other hand, has the potential to act as an on-call co-pilot to everyday life, seamlessly integrating into daily real-world interactions. This will become increasingly true with the development of the AR Cloud.

The AR Cloud

Described by some as the world's digital twin, the AR Cloud is essentially a digital copy of the real world that can be accessed by any user at any time.

For example, it won't be long before whatever device I have on me at a given time (a smartphone or wearable, for example) will be equipped to tell me all I need to know about a building just by training a camera at it (GPS is operating as a poor-man's AR Cloud at the moment).

Also: The urgent case for Open AR Cloud

What the internet is for textual information, the AR Cloud will be for the visible world. Whether it will be open source or controlled by a company like Google is a hotly contested issue.

Industries that will be affected by both AR and VR


The $10 trillion global construction industry has been operating with much the same technology for the past century. AR and VR are helping to change that with a variety of applications that allow project managers to track progress and builders to work through jobs and spot time and money drains before the foundation is ever poured.

Also: Field service workers rapidly embracing AR/VR to democratize knowledge

The technology is still emerging, but some companies to watch in this arena are: OpenSpace, which gives project managers a Google Street View-like time machine to walk through projects at various stages of completeness; Skycatch, whose drones are being used to create on-site VR simulations of projects; and DAQRI, which makes a smart helmet that's used in AR applications to deliver site-specific information to builders in real-time.

K-12 Education

Not long ago, futurists predicted that virtual reality would change the face of education. Adoption of VR in education has happened far slower than many hoped, and for the time being it looks like the hype was just that.

Nevertheless, many K-12 programs are finding uses for headsets from Oculus and HTC, as well as cheaper Google Cardboard, such as sending students on virtual field trips, tours of the solar system, and walks through the Jurassic period.

Also: 11 unexpected ways universities are using the Microsoft HoloLens

The hype pendulum has now swung toward augmented reality in education. Text books are being printed on "clickable paper" and students in primary school are creating their own AR experiences with Metaverse. Augmented field trips can easily turn into scavenger hunts, and digital puzzle boxes are challenging students to problem solve their way out of prickly situations, all while sitting in the comfort of the classroom.


From therapies for those with autism to restoring low vision, virtual reality is being used as an effective treatment in a wide variety of healthcare applications.

VR is also becoming an effective teaching tool in healthcare. Students can now watch VR surgeries and dissect VR cadavers, for example.

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Healthcare is also primed for AR adoption precisely because its a field that requires individuals to make important decisions on the fly with available information. Just as surgeons have adopted robots to enhance the uncanny dexterity of humans, the industry is looking at novel uses of heads up displays and wearables to enhance the decision-making capabilities of people that are often under stress and under the gun.

A few big players are Microsoft, which is exploring applications for its HoloLens as an AR tool to help doctors visualize challenging procedures during surgeries, and AccuVein, which helps doctors and nurses locate patients' veins more easily.

Enterprise Training

The enterprise VR training market could be worth more than $12.6 billion by 2025. Pilots have been training on VR simulators for generations, but now workers in many high-risk fields, such as oil and gas and other utilities and heavy industries, are getting the chance to take their licks in the virtual world as opposed to on the job, where the risk of injury or costly mistakes is far higher.


Augmented reality is also making a splash in enterprise training, particularly in the realm of technical training. Honeywell recently announced a mixed-reality simulation tool to train its industrial employees using Microsoft's HoloLens, and it's easy to envision workers in a wide variety of industries getting visual assistance as they learn the ropes on service calls, for instance.

Caterpillar and BP are two major companies embracing AR to train and guide technicians in the field.

Real Estate

The real estate industry, which relies so heavily on customers visualizing themselves in a new environment, seems particularly excited about the prospects of AR/VR technology.

It's now possible to take a virtual tour of high-end properties in many parts of the country thanks to companies like Matterport. Sotheby's now has an AR home staging app, which allows users to put the virtual furniture of their choice in properties they may be interested in.

Industries that will be most affected by AR


Head-Up Displays (HUDs) were one of the first deployments of AR in the marketplace. HUDs now adorn models from BMW, Volvo, Chevy, Lexus, and many others. There's also a thriving aftermarket offering HUDs that interface with a car's OBD-II port to display vital information like speed and gas mileage without requiring drivers to take their eyes off the road.

Also: Augmented reality is coming to your car CNET Roadshow

Expect to start seeing these in economy cars, not just luxury models. If you prefer two wheels, you'll be happy to know the concept has even made its way into motorcycle helmets.


Headsets still haven't taken off in a compelling way, which means smartphones will be the AR vehicle of choice for the next few years.

That's good news for smartphone manufacturers, which have seen life cycles for their products rise from 18 months to three years. As AR penetration grows, it's kicking off a new arms race among suppliers to create better-equipped phones and inject new life into an industry that's starting to plateau.

Grocery Shopping

You're about to be using your phone a lot more to buy food. A company called Dent Reality has been working on an app that allows customers to see real-time information about products in grocery stores. It uses computer vision and in-store tracking to help customers find food that fits their dietary needs.

It's likely more of these apps are on the horizon. For manufacturers, that means new promotional opportunities and perhaps a new twist on the old game of big brands paying for shelf position.


One of AR's biggest deployments has been in advertising. In April 2018, Facebook began letting developers build AR apps that contain location-triggered elements. Google has made a similar move.

Also: Data visualization via VR and AR: How we'll interact with tomorrow's data

There are lots of potential applications, but you can be sure the first and most prolific will involve marketing to users in the real world. (Facebook tested the concept in promotions for the movie Ready Player One.)

It may not be long before every restaurant and shop we walk by triggers a floating billboard or a sale offer.

Online Shopping

The Achilles' heel of online retail has always been the inability to try things on. But what if you could virtually try on clothes before you buy?

That's the promise of apps that act as virtual fitting rooms, allowing shoppers to try on clothing virtually before they buy it. The technology may soon solve a vexing problem with online shopping: How to ensure a good fit when you only have model photos to go on.

Market Outlook

According to IDC, AR and VR products and services will be worth $20.4 billion in 2019, which marks a roughly 90% increase over 2017. Broadly speaking, the enterprise market for AR and VR will be worth roughly $56 billion by 2022, while the consumer market could be worth $53 billion.

For the technologies to fulfill that lofty promise, developers will have to push AR and VR out of the novelty phase and past the hype. There's enough action right now across a variety of industries to suggest we're well on our way.

11 upcoming AR trends that will redefine technology

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