AA UNION CAPITAL INVESTMENT SOLUTIONS & PRODUCTS - Supertrends

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Virtual and augmented reality back in focus

US-China trade tensions may be lingering and the economic growth outlook may look overcast. Yet, we believe that the digitalization trend, which is the foundation of our Supertrend “Technology at the service of humans,“ will continue.

In this context, we expect the virtual and augmented reality (VR/AR) investment theme to regain prominence this year after having been under the radar for some time.

AAUC Equity Research Dept - Telecom / Information Technology

The “Technology at the service of humans” Supertrend focuses on the continued expansion of digitalization into almost all areas of life in the form of smart homes, smart industries and smart cities. As enterprises and consumers invest in and consume more and more digital infrastructure, devices and services, we believe the trend should prove to be an attractive source of investment outperformance over time. In particular, we believe that it will continue even in a global economic slowdown.

Entering a new phase

We expect our sub-theme “Virtual reality and augmented reality” to enter a new phase, which could see it move back into investors’ focus. In our view, 2018 could be described as a pilot phase for enterprises across different industries to explore the AR technology extensively and recognize its value. According to consulting firm Digi-Capital, venture capital investments in VR/AR amounted to USD 7.2 bn between Q4 2017 and Q3 2018, USD 4 bn of which were invested in computer vision/AR technology.
 
Benefits for consumers and enterprises

Large technology companies including Apple and Alphabet (Google) are encouraging AR app development by providing development platforms such as ARKit and ARCore. This should result in substantial growth in the consumer AR segment. In addition, the addressable AR-compatible smartphone user base is growing, reaching 762 million users as of July 2018 (source: ARtillery Intelligence). In the enterprise business, we expect AR to become a major driver of maintenance technology, for instance. Private companies such as DAQRI, Upskill or Worklink already offer different ways for technicians, engineers and mechaniAAUC to use AR to maintain facilities, repair an asset, provide real-time guidance to complete tasks or discover asset information. Companies that have already implemented such AR productivity. Hence, we remain optimistic that the VR/AR market will continue to grow.

VR/AR market likely to post continuous growth



 



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