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Snap, the company behind popular ephemeral photo- and video-sharing app Snapchat, reportedly acquired Israeli startup Cimagine Media for $30 million to $40 million, according to Calcalist.
The deal, yet to be confirmed by either party, will give Snap access to Cimagine’s portfolio of augmented reality (AR) and camera vision technology. The startup focuses on computer vision, real-time image processing, mobile development, and international marketing. The acquisition will also give Snap the ability to build out a development center in Israel, expanding staff beyond the 20 Cimagine already has.
Snap could be looking to diversify its revenue stream ahead of its impending public offering in early 2017. Cimagine’s emphasis on marketing technology could help Snap as it looks to break into the commerce aspect of computer vision and image recognition. Cimagine is already partnered with a number of leading brands — including Coca-Cola, Shop Direct, and John Lewis — to help them market their products over AR. The purchase gives Snap an in with these companies already familiar with Cimagine’s technology.
The purchase will add to Snap’s already abundant AR offerings. Cimagine’s AR technology, which allows users to overlay objects on photos and videos, could be added to Snapchat's AR technology to add geo-filters to users’ photos and videos. But it could also be used further down the line, perhaps with Snap’s new wearable product, Spectacles. Currently, the recently launched glasses can take videos that can then be added to a user's Snapchat story. However, it’s not hard to imagine the company turning the wearable into a stand-alone AR offering — similar, but ideally more successful, than Google Glasses.
AR and VR research has been a hot topic in 2016, as tech companies look to keep up with the emerging technology.
- Facebook purchased modular hardware company Nascent Objects, which could indicate the company is thinking about building its own camera hardware.
- Apple spent a large portion of its recent September event detailing the specifications of its iPhone 7 cameras. In particular, the iPhone 7 Plus’ dual camera lays the framework for AR/VR implementation in the next few years.
- Google launched several new products in 2016, including Daydream, the company’s VR platform, and Tango, a tech platform that aims to provide better VR and AR capabilities in smartphones. Tango could power image- and video-based search in the future, allowing users to discover information through their cameras rather than through text or speech.
- Microsoft introduced Pix, its iOS camera app that utilizes AI to enhance the quality of photos. The free app is in line with Microsoft’s Trojan horse approach to the mobile industry, giving it access to users' image data in the rapidly growing camera industry.
The virtual reality (VR) market has made significant strides throughout 2016.
New VR headsets like the Oculus Rift and the HTC Vive debuted amid great consumer anticipation, while VR content launches kept pace, with Batman: Arkham VR and Chair In A Room garnering encouraging download totals.
At the same time, industry groups and conferences brought developers, investors, and content producers together, helping to further ramp up buzz in this nascent space.
BI Intelligence, Business Insider’s premium research service, forecasts shipments of VR headsets to spike by 1047% year-over-year (YoY) to 8.2 million in 2016. This growth will help propel the virtual reality space to exceed $1 billion in revenue for the first time, according to research by Deloitte. Powering that growth is an estimated 271% increase in investment in AR (augmented reality) and VR companies from 2015, according to estimates from CB Insights.
But while 2016 has indeed been an important year for the VR market, it hasn’t necessarily been a big one — at least not compared to its future growth potential.
VR headset shipments will continue to grow in the years ahead, driven by the introduction of new content that will appeal to a broad swath of users.
Jessica Smith, research analyst for BI Intelligence, has compiled a detailed report on virtual reality that explores the highly fragmented and volatile VR market that emerged in 2016, lays out the future growth potential in numerous key VR hardware categories as driven by major VR platforms, and examines consumer sentiment and developer excitement for VR, presenting which headset categories and platforms are most poised for success in the near- to mid-term.
Here are some key takeaways from the report:
- This has been an important foundational year for the VR market. New hardware and content have brought more options to market to appeal to a wider set of consumers.
- But the growth seen this year is merely a foreshadowing of the future. The highly fragmented VR market today will eventually narrow as the market grows and matures.
- After considerable progress in 2016, the VR market is ripe for transformation in 2017. Developers, consumers, investors, and hardware makers have a host of options from which to choose, each with their own strengths and shortcomings.
- The environment is poised for the first killer VR app to hit the market sometime in 2017, which will be a major catalyst for consumer adoption of VR hardware.
- Not all headset categories and platforms will emerge as winners in the near future. More immersive headsets that offer the best VR experiences are too expensive for most consumers. Alternately, affordable headsets that rely on smartphones as processors offer sub-par experiences that can induce sickness.
In full, the report:
- Identifies the major players in today's VR hardware and platform markets.
- Estimates future growth of each of the major VR categories.
- Explores barriers to mass market consumer adoption for each of the VR hardware categories.
- Considers how developer sentiment is driving the growth of various platforms.
- Assesses how the market will shake out over the next five years in terms of size and the success of various VR hardware categories.
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