The OS Of The Future: Who's Taking The Lead?

Opportunities For New Players

Gene Munster, managing partner at the firm, attributed this to the well-defined shifts and the existing players carefully positioning themselves to be sure they have a seat at the table. Munster feels the future won't be owned by the incumbents, as there is a move away from purely digital technologies into ones that combine the sciences, namely biology, chemistry, psychology. This, the analyst, sees would provide opportunities for the emergence of new players.

New Computer Paradigms Keep Emerging

Loup Ventures noted that once in every 25 years a new computing paradigm keeps emerging, creating an opportunity to own a new OS layer — like the PC in the late '80s powered by Windows, Mac and Linux, the internet in the late '90s powered by Google and Amazon.com, Inc. AMZN, mobile in the mid-2000s, owned by iOS and Android.

Sharing Knowledge On AR OS Layer

Although Munster believes most AR functionality will happen through the existing mobile OSes, he thinks in order to drive a true paradigm shift, AR wearables will need their own OS. The analyst is of the view that there are likely to be two or three winners on that count, which would render reach and scale difficult to achieve. There is likely to be one closed OS solution and one that is open, Munster added.

The leeway open systems allow for third-party developers to innovate on hardware and software features would make hardware commoditized. Munster sees definite challenges around miniaturization and battery. The analyst expects AR to be a culmination of several core disciplines such as UX design, maps, data, social, developers, content and payments.

On these core disciplines, Munster noted that Google scored the highest followed by Apple, Microsoft, Facebook Inc FB, Amazon and Snap Inc SNAP. Also taking the R&D spending of these companies as proxies for their determination to make it big, Munster noted that Apple is spending the most followed by Google and Facebook.

AR OS Players And Their Status

• Google: Discontinued Google Glass; Tango already has takers in the form of Lenovo Group Limited (ADR) LNVGY's Phab 2 Pro and ACER INC GDR(REP 5 ORD TWD10)REG'S ACEYY's Tango-ready phone. Google's AR OS is likely to be the winner for the open system, developing from a combination of Tango and Android, augmented by the company's machine learning efforts.
• Apple: If the next iPhone integrated a dedicated 3D mapping chip, it could be the first AR hardware to gain mass adoption, enabling developers to create unique AR experiences on the iPhone. Additionally, Loup Ventures expects Apple to show off the capabilities of the chip with help from Prime Sense and Metaio, its most recent AR software acquisitions.
• Microsoft: Munster feels the company may be the furthest along in AR today, with the Hololens and its Windows Holographic OS. Given that the company had missed the bus in mobile OS despite being an early entrant, the company might be determined not to miss on AR. However, the company would be constrained by its inability to match up to Google in most of the core competences to win in AR, although it still holds an edge in productivity.
• Facebook: Loup Ventures believes Facebook is experimenting with both AR and Virtual Reality, or VR, with the focus more on VR than AR. This is understandable, given Mark Zuckerberg's view that VR is five to 10 years ahead of AR. The company's relative weakness in maps and informational data and strength in social and content make it a potential winner in the VR OS layer.
• Amazon: Amazon's foray into AR is not through wearables, but Alexa, an open OS. Munster sees Alexa-powered devices to eventually include cameras that will enable computer vision. The analyst feels the company might want to stamp its authority as a force in the OS layer for commerce.
• Snap: Munster believes for Snap, communication is a key use for AR, with its camera and Spectacles. However, the analyst doesn't think Snap can win the AR race, as it can't offer incremental features beyond social to developers.