Augmented Reality Gets Pandemic Boost

“We saw the appetite, it grew and it’s our responsibility now to continue to innovate,” said Lubomira Rochet, chief digital officer at L’Oréal, whose brands include Lancôme, Kiehl’s and Maybelline New York.

The French cosmetics company has launched several new augmented-reality projects in recent months, for both consumers and employees. One connects customers with beauty advisers using AR technology from ModiFace, a company L’Oréal bought in 2018. The beauty expert can meet for a tele-consultation via mobile app and apply makeup virtually to a customer’s face in real-time.

Last summer, L’Oréal also began using Microsoft Corp.’s HoloLens 2 headset to help employees install and troubleshoot manufacturing equipment with assistance from experts in different parts of the world.

While wearing the HoloLens 2 headset, users can see data, instructions and 3-D visual images in their real-world view. They can manipulate digital objects by using their fingers to grab the corners of the object and drag it over to one side, among other gestures. With remote-assistance software, a user wearing a headset can share their real-time view with others who are using a desktop or mobile device.

The world-wide total market value for augmented reality is expected to grow to $140 billion by 2025, up from about $10 billion last year, according to a report this month from tech market advisory firm Allied Business Intelligence Inc. Those figures include hardware, software and content, AR advertising, platforms and licensing, connectivity and much more.

The hardware includes headsets such as Microsoft’s HoloLens, and Glass, made by Alphabet Inc.’s Google. For smart glasses alone, ABI said world-wide shipments last year totalled around 1.8 million units; it forecasts that will rise to 27 million in 2025.

The expected growth is attributed partly to the lasting impacts of the pandemic over the next few years, said Eric Abbruzzese, a research director at ABI Research.

The jolt higher would also be due to new products and advances in the technology over the next few years, he said.

Increased demand for augmented reality in some sectors is also part of a wider digital transformation in businesses, along with investments in cloud-computing and videoconferencing, triggered by the pandemic.

“We don’t see it slowing down,” said Paul Travers, chief executive of Vuzix Corp., which makes augmented-reality glasses. In the fourth quarter of last year, Vuzix’s sales doubled to over $4 million compared with the same period in 2019, he said.

Mr. Travers said customers will continue to use the products even after the pandemic. “This is the beginnings of an inflection point for this industry,” he said. “There’s no doubt about it.”

Microsoft saw a 44-fold rise in remote-assistance usage of HoloLens 2 between January and December of last year, largely because of social-distancing and lockdown requirements amid the pandemic, the company said.

Demand has increased in industries such as auto and semiconductor manufacturing, where it is being used for remote guidance on complex assembly tasks and new installations, said Charlie Han, principal program manager of Microsoft HoloLens.

“It’s not going to be a uniform rocket to the moon, but in some areas we’re seeing extremely fast growth,” he said.

Mercedes-Benz USA, a subsidiary of Daimler AG, trained more than 1,200 automotive technicians at all 383 U.S. dealerships last summer on how to use HoloLens 2 headsets for remote assistance.

In the past, a technician might have to wait days for a field service engineer to travel to the dealership to help with a complex problem, such as fixing a car’s transmission or software, said Christian Treiber, vice president of customer services at Mercedes-Benz USA.

Now, 60% of complex problems can be solved within 24 hours with the HoloLens 2 headset, Mr. Treiber said. A technician with a headset at any dealership can connect right away with one of several specialists around the country. Through remote-assist software, the specialist can see on a desktop or tablet what the technician is seeing using the headset.

“It’s a guided repair, which helps the dealership technician be more efficient and effective,” said Mr. Treiber.

The plan to distribute HoloLens 2 headsets to dealerships had been in effect since 2019, but the technology became more valuable during the pandemic, he said. Still, he said it would be around three years for AR headsets to become as widely used as other tools.

“The HoloLens is not yet accepted as a tool like maybe a wrench or screwdriver or diagnostic laptop,” Mr. Treiber said. “We’re not there yet.”

Write to Sara Castellanos at [email protected]