Augmented reality is becoming an increasingly popular integration for mobile games and apps, but has to compete with similar technologies like virtual reality. Here’s what Australian investors should consider before investing in augmented reality stocks.
What are augmented reality stocks?
Augmented reality stocks are stocks from companies that design or produce augmented reality (AR) hardware or software — including chipsets, 3D sensors, headsets, haptic technology, laser projections, varifocal displays and semiconductors.
What is augmented reality?
AR is a form of technology that superimposes sounds and images onto what we observe. In this way, augmented reality tweaks our experience of the world around us by adding to what we perceive. The technology typically requires a lens-equipped screen to operate — like the camera on your mobile device — but can also rely on laser projections.
Since augmented reality is a screen-dependent technology, we typically experience AR through a mobile device. Today, a number of mobile games make use of AR technology, including Pokemon Go, Ingress and Harry Potter: Wizards Unite. But the technology can be used in a variety of other ways, too — including AR projections to assist complex neurosurgeries and projections on fighter planes to assist pilots with speed and navigation.
Augmented reality vs. virtual reality
While sometimes used interchangeably, augmented reality and virtual reality are two different sets of technologies. While augmented reality adds to the observable environment, virtual reality aims to replace it entirely.
Virtual reality (VR) is a computer-simulated experience that allows users to interact with a simulated 3D environment. To access this technology, you often need some form of wearable technology, like a VR headset or head-mounted display. Today, virtual reality is being used in video games, training simulators, real-estate tours, online retail, architectural design and more.
Why invest in augmented reality stocks?
Augmented reality is an emerging technology that is chock-full of potential. And market projections are promising.
According to Mordor Intelligence, the global AR market was worth $US 882 million in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 55.8% from 2020 to 2025. During this time, over 800 million smartphones will be equipped with AR-supporting technology. And other market sectors, like the automotive industry, are also integrating the technology into new models with heads-up displays and AR co-drivers.
Augmented reality is a flexible and adaptive technology with a myriad of practical, real-world applications. Not only do investors in Australia have the opportunity to back progressive new technology — they have the opportunity to invest in something they may actually use, both now and in the future.
Risks of investing in augmented reality
Augmented reality is a technology on an upward trajectory, but there are investment risks to consider — namely: data protection regulations and market competitors.
Tech companies have come under public scrutiny in the past for infringing on data privacy rights. AR technology is particularly reliant on consumer locations and cameras to operate. Enhanced data protection regulations could impact the industry’s process and hamper growth.
Another consideration is market competitors. Potential is no guarantee of growth and close competitors in the virtual reality and mixed reality markets may take aim at AR companies by targeting the same consumer base.
Augmented reality stocks
Augmented reality is a complex technology with many moving parts, including chipsets, sensors, headsets, and varifocal displays. While there are few pure-play augmented reality stocks — companies that focus on augmented reality and nothing else — you can add AR technology to your portfolio by investing in companies that contribute to the technology.
Company summary
Vection Technologies Limited, an enterprise-focused company, that helps businesses in bridging the physical and digital worlds in Australia. The company operates in two segments, IT and Outsourced Services. It offers Mindesk, a virtual reality design review and real-time rendering in the unreal engine, for CAD and BIM; EnWorks, a solution to support training, manufacturing, and maintenance processes that enhances the work with augmented reality-powered visual assistance; 3DFrame, a no-code enterprise metaverse app for immersive product presentations; configuration that manages product variations for ecommerce, from web to mobile devices; and XRKiosk, which transforms the in-store customer experience with 3D and augmented reality. It serves machinery manufacturing, automotive, naval, furniture, public sector, healthcare and pharma, betting, defence, military and law enforcement, aerospace, architecture, engineering and construction, sports, media and communications, retail, fashion, and education industries for design review, training, remote presentations, retail 3D experience, and 3D e-commerce applications. The company was formerly known as ServTech Global Holdings Limited and changed its name to Vection Technologies Limited in November 2019. Vection Technologies Limited was incorporated in 2016 and is based in Osborne Park, Australia.
Historical performance
Company summary
EchoIQ Limited provides cardiac diagnostics technology solution in Australia. The company's artificial intelligence-assisted diagnostics technology supports the sensitive diagnosis of Aortic Stenosis. It primarily serves device manufacturers, cardio scanning equipment, pharmaceuticals, and healthcare providers and insurers, as well as clinicians and patients. The company was formerly known as Houston We Have Limited and changed its name to EchoIQ Limited in December 2021. EchoIQ Limited is based in St Leonards, Australia.
Historical performance
Company summary
PPK Group Limited, together with its subsidiaries, provides nanomaterials, artificial intelligence, and energy solutions primarily in Australia. It designs and manufactures batteries and full battery energy storage systems for the stationary storage market, as well as white graphene. The company was formerly known as Plaspak Group Limited and changed its name to PPK Group Limited in September 2006. The company was founded in 1979 and is headquartered in Brisbane, Australia.
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Bottom line
Augmented reality is a growing technology many of us can access through our mobile devices — but it isn’t without its risks. Data protection regulations and pressure from competing technologies may pose threats to this industry’s development.
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Frequently asked questions
Some do, including Microsoft, Nvidia and Snap.
Yes, there are numerous augmented reality penny stocks available for purchase, including Blue Hat Interactive Entertainment Technology and ImagineAR.
Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.
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