5G Rollout and Pandemic Conditions Could Lead to Boom in Augmented Reality

As the pandemic continues to push more consumer interactions into the virtual realm, augmented reality could become one of the top new use cases for new 5G networks, a new report from Swedish telecom Ericsson found this week.

The report looked at how quarantine conditions have affected expectations for what markets the next generation of cellphone service might open, including expanding interest in mixed reality, enhanced video streaming and cloud gaming. By 2030, the report’s authors expect AR, in particular, to account for around half of all revenue from immersive video formats, a category that spans any video medium with an interactive element.

“When we started looking at the use cases, some of the use cases that seemed very gimmicky at that point of time—in May of 2019—are now much more relevant in light of the pandemic,” said report author and head of Ericsson’s ConsumerLab division Jasmeet Singh Sethi. “The 5G use cases are much more relevant and exciting and will be about how are you going to take an in-venue experience and turn it into a digital experience.”

It also found that mainstream consumer awareness of 5G has climbed about 20% in the months since the Covid-19 outbreak first hit the U.S. At the same time, however, financial hardships caused by the virus have reduced the premium that survey respondents are willing to pay for the new service has dropped from 20% to 10%.

Singh Sethi said that consumer uncertainty about spending on 5G makes it all the more critical for carriers to build out use cases like mixed reality and gaming that make it a more attractive proposition.

“It’s more important for the service providers to be much more proactive about enabling new consumer experiences, which can then convince consumers about the value of 5G,” Singh Sethi said. “And that is what we are really pushing for and urging service providers to do is to be much more proactive with 5G.”

Experts expect 5G networks to eventually reach speeds of between 10 and 100 times that of current 4G LTE wireless and provide expanded processing power to support more elaborate AR and other mixed-reality graphics. But the current stats of still-nascent 5G networks fall short of that potential.

The technology saw a major boost in awareness when Apple rolled out its 5G-enabled iPhone 12 last month.

Even without widespread 5G service, AR saw a surge in popularity amid the pandemic. Fashion retailers are using it as a virtual substitute for in-store fitting rooms, and other marketers have turned to the tech as an alternative to big in-person activations.

“In the long run, with 5G capabilities coming in, we expect AR to expand out from [being primarily used for] gaming into uses like home planning, education and even advertising and mobile commerce,” Singh Sethi said.

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