However, Juniper found that annual revenues from AR are unlikely to exceed a meagre $2 million during 2010 since only a small minority of smartphones will be AR-enabled. The number should subsequently rise sharply with the increasing adoption of Android handsets and iPhones, along with greater deployment of AR enablers such as digital compasses and accelerometers by other leading vendors.
Initial service adoption will be driven by AR location-based search, but Juniper expects the first substantial revenues to be derived from AR-enabled games, bolstered by revenues from mobile enterprise solutions from 2012-3 onwards.
AR advertising is expected to attract brands and retailers as the potential user base increases, with AR ad networks able to charge higher CPC and CPM rates because of location relevance.
Juniper cautioned that while AR geotagging presents a wealth of opportunities, providers and enablers must carefully consider the potential legal implications of enabling such services. Dr Windsor Holden, author of the report, commented: "The problem is that the embryonic nature of the technology means that we have no legal or regulatory framework in place which specifically covers augmented reality. For example, can a house-owner legitimately demand that a geotag of his or her property be removed? Would that third party require prior permission before creating a tag?"
