Will Alphabet Inc’s (GOOGL) ARCore Spoil Apple Inc.’s (AAPL) Glory?

When Apple Inc. (NASDAQ:AAPL) holds its iPhone event in September, it won’t just be new hardware the company introduces. AAPL stock will get a boost from lineups for the iPhone 8, but the longer-term picture includes the potential for explosive growth in augmented reality, driven by ARKit support baked into iOS 11, which also makes its debut in September.

Will Alphabet Inc's (GOOGL) ARCore Spoil Apple Inc.'s (AAPL) Glory?

But Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google is playing spoiler.

The company behind Android just released its new ARCore augmented reality platform, available immediately on two of the smartphones taking on the iPhone 8: Google’s own Pixel and Samsung Electronics’ Galaxy S8.

The Augmented Reality Revolution

Just a few years ago, virtual reality seemed like the next big tech growth opportunity. That promise led Facebook Inc (NASDAQ:FB) to spend $2 billion to buy Oculus VR.

Virtual reality hasn’t panned out exactly as expected, though. Costly headsets, high-powered PC requirements, plus setups that require cameras, floor space and wires have all combined to keep the technology from going mainstream. As a result, Oculus has cut its VR hardware prices twice this year and HTC is rumored to be looking for a buyer for its Vive VR system.

However, what is expected to take off is augmented reality. IDC recently predicted a 172.9% growth rated for AR headsets over the next five years.

Apple has moved to position itself as a leader in the coming AR revolution, with ARKit in iOS 11. No special gear required, the technology runs on an iPhone (although the iPhone 8 is expected to include new cameras that will offer the best possible experience). There has been serious buzz around the company’s augmented reality platform, with a rush to develop apps for the new technology –everything from games to an IKEA furniture shopping application.

Google’s ARCore is an attempt to get in front of that augmented reality gold rush before Apple is sitting in the driver’s seat.

Google Announces ARCore

On Aug. 29, Google announced ARCore, its new augmented reality development platform that offers AR support for Android smartphones. Similar to the way AAPL implemented AR in iOS 11, Google says ARCore “uses three key technologies to integrate virtual content with the real world as seen through your phone’s camera.” Those are:

  • Motion tracking (the smartphone knows its position relative to surroundings)
  • Environmental understanding (the smartphone is able to detect flat horizontal surfaces such as the ground or tables, including their location and size)
  • Light estimation (the smartphone is aware of the lighting conditions in its current environment)

Using those three key motion tracking technologies, ARCore lets an app on an Android smartphone place objects (or information) onscreen so they integrate seamlessly with the real world view.

If some of this sounds a little familiar, Google has been in the augmented reality game already. That was Project Tango. It required specialized cameras and powerful mobile CPUs and for that reason, it has never seen wide commercial adoption. But ARCore — like Apple ARKit — is designed to run on consumer smartphones, setting the stage for augmented reality on a massive scale.

ARCore is available now, as a preview release.

AAPL stock benefited from the $8.5 billion cut Apple took from over $28 billion in App Store revenue for 2016. The potential has been brewing for App Store sales — and iPhone sales too — to explode if Apple is seen to be the leader in augmented reality with ARKit in iOS 11. Google’s ARCore may be late to the game, but it’s here just in time to deflect the spotlight from ARKit. And while ARCore runs on two of the iPhone 8’s key competitors out of the gate, Google says it will soon be compatible with 100 million existing Android smartphones.

Consider the AR gauntlet dropped.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2017/08/alphabet-inc-googl-arcore-spoil-apple-inc-aapl-glory/.

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