Augmented Reality 101: An Overview of AR for Business Leaders


Augmented reality (AR) has evolved from a concept in science fiction into everyday reality.
Magic Leap 2 augmented reality platform.

While media attention often focuses on its entertainment applications, AR is certainly impacting business and enterprise industry the most.

A study from PwC predicted that by 2030, AR will be responsible for a $1.1 trillion boost to the worldwide GDP. It’s anticipated that the U.S. will benefit from the use of AR more than any other country, with an additional $380 billion expected to be added to its economy. Another study suggested that almost $12 billion will be spent on AR technology in the U.S. in 2024.

AR is already making a difference for enterprises. Key decision-makers at rival businesses should be on top of AR’s many practical applications to avoid being left behind. Even if you have had limited exposure to AR, it’s important to get up to speed on what it actually is, what it can do for enterprise businesses, and how it can benefit your company right now.

Augmented reality is not virtual reality

The concept of virtual reality (VR) is perhaps more widely understood than AR, but they are certainly not the same thing.

  • VR involves wearing a fully enclosed headset through which users are completely immersed in a digital world.
  • AR uses glasses or headsets through which users can still see the real world around them, with digital information integrated within that environment.

For enterprise applications of VR and AR, there are very distinctive applications. VR’s use in business is often specific to tasks that can be completed in isolation, such as 3D design.

However, the inability for users to see or interact with the world around them is a major limitation that makes VR inappropriate for factories and other manufacturing environments.

On the other hand, AR is more flexible and does not limit the user to a locked-in virtual experience. There is more freedom of movement, as users can safely walk around and perform their normal duties, and the visual information integrated into what they see in the real world can also adapt more easily to different situations. With VR, a machine would need to be created and animated as a digital asset, just like a video game. But with AR, users can simply look at the actual machine in front of them and have relevant performance or maintenance information appear in their field of view.

For that reason, AR is likely to be adopted by more companies and used for more business functions than the limited options that VR offers.

How augmented reality works

At its most basic level, AR uses a camera and a screen to integrate data and information into the real world, in real time.

So, for example, an AR function for a map application might be programmed to detect the logos of specific stores and display details such as store hours when you look at them. On a smartphone, that’s simply a case of putting the information on the screen. But for a wearable AR headset like the upcoming Magic Leap 2*, the process is even more immersive. Using information from the built-in eye tracker enables virtual content to be rendered correctly and slightly differently for each eye, which then enables virtual objects to appear at any depth.

This spatial element, in which the AR display changes based on where you are and what you are looking at, is key to the future evolution of AR technology. More advanced AR systems like Magic Leap can do even more.

With double the field of view and a 50% smaller form factor than its predecessor, Magic Leap 2 enables more immersive experiences and a more comfortable headset. Additionally, its global and segmented dimmer enables solid virtual content across a huge range of ambient light conditions. By minimizing render perspective errors, the headset has one focal plane that still has a 37cm to infinite range of depth for virtual content. This results in a better form factor and much simplified device. And finally, Magic Leap 2 features huge improvements in eyepiece performance enabled by our design, unique in-house manufacturing process, and significant improvements to sharpness, brightness, efficiency, and rainbows. As such, users perceive data not just as information floating in front of them on a screen, but as part of their environment with the same sense of depth and scale as the physical objects around them.

In a manufacturing setting, for example, AR can enable new, revolutionary training methods where workers can learn and perfect tasks virtually in the environments where they will be performed, thereby accelerating key metrics such as time to productivity and time to resolution. Since AR breaks the limitations of the physical world, it allows humans to be co-present with each other irrespective of distance. Implementing AR technology, industrial enterprises are boosting workforce efficiency and safety, improving operational performance, and lowering costs across the factory and the field.

Augmented reality enterprise use is growing fast

Research by IDC identifies corporate training and industrial maintenance as commercial applications of AR that will see the largest investments by 2024, with each expected to attract $4.1 billion. While commercial spending on AR will trail behind consumer products, it is where the fastest investment growth is expected to occur.

According to Tom Mainelli, group vice president, Devices and Consumer Research at IDC: "We've seen a huge uptick in commercial interest in both VR and AR driven by the pandemic. Organizations of all sizes are leveraging the technologies to capture and transfer knowledge between experienced and new employees, enhance and streamline field operations, and increase collaboration among frontline workers."

You don’t need to look to the future to see the benefits of enterprise AR, though. There are hundreds of companies enjoying tangible cost and efficiency advantages right now, thanks to investments in AR.

Commercial Manufacturing: In commercial manufacturing, engineers can visualize equipment problems and share each other’s AR view to quickly identify the source of a machine fault and fix it through a combined effort. Issues can even be spotted early by displaying productivity data and maintenance records for specific workstations and production lines as soon as engineers look at the machinery in question. When problems occur, AR enables quicker resolutions, production resumes more quickly, and your company saves money and improves efficiency.

Product Design: In AR, 3D digital models can be shared, viewed, and discussed by remote teams around the world, as if everyone is holding the same prototype in their hands. This saves on travel time and expenses and also enables the best people to collaborate effectively regardless of location. This is also how Magic Leap’s own internal teams are collaborating on the next generation of its hardware, even from different continents.

Internal Communication: Operations management is improved as AR meetings allow for more immersive data sharing than 2D video calls. Unlike the isolation inherent in VR, AR combines the best of both worlds with no travel costs but with the interaction and social aspects of an in-person meeting.

Remote Training: Using AR for training upskills staff faster and is more cost-effective. It is especially good for technical training as every participant can view and interact with simulated equipment rather than each person needing an actual physical machine. Research by PwC found that AR training was not only four times more effective than a physical classroom scenario in terms of information retention but that it became more cost-effective with just 375 staff taking part.

Augmented reality is already shaping the future of business

Smart cities, smart highways, smart factories — the era of interconnected data-driven enterprise is already well underway. In manufacturing alone, the global market for smart processes was valued at $88.7 billion in 2021 and is expected to reach $228.2 billion by 2027. With its ability to connect the physical and the digital world in a seamless and convenient way, AR is set to be the glue that holds Industry 4.0 together over the coming decade.

Understanding this new landscape is key, but for enterprise businesses that have yet to seriously consider AR implementations, the time is fast approaching when catching up to more advanced rivals will be a long and painful process.In case you missed the previous “Augmented Reality 101” series, they’re available here:

*Magic Leap 2 is not yet available for sale. Regulatory approval pending. Specifications subject to change.