The Future of the Future

Mixed Reality

Ankit A. ShuklaPractice Director & Global Head of Growth Consulting |

ashukla@frost.com

www.frost.com/techvision

@TechVision_FS

Everyone is Innovating

Sound Innovation - Plantronics

Empowered By Innovation – NEC

Innovation – 3M

Innovating For A Safer World – BAE Systems

Innovation That Excites – Nissan

Think Different – Apple

Value From Innovation – FujiFilm

Inspire The Next – Hitachi

Innovation By Chemistry –Toray

We Help You Invent The Future – DOW Corning

Know what your customers want before they do

Innovation Engine Kaleidoscope

Innovation

Ecosystem

Drivers

Technology

Clusters

IndustriesMega

Trends

DISRUPTIVE

INNOVATION

Top 50 TechnologiesHow do we choose?

GLOBAL

TRACKING

100’S OF

TECHNOLOGIES

ACROSS 9

TECHNOLOGY

CLUSTERS

Intensity of Impact

STEP 1Scan Technology Pool

STEP 3Evaluate Constructs

STEP 4Select Technologies

Innovation

Index Score

Top 50Technologies

IP Activity

Funding

Market Potential

Megatrend Impact

Regional Adoption Potential

Sector of Economic Impact

Technology Disruptiveness

Technology Cluster Evolution

STEP 2Formulate Sub-Constructs

Year of Impact

Index of Disruption

Index of Cluster

Evolution

Copyright: TechVision

Global Top 50

Technologies

Health and Wellness

• Therapeutic Antibodies

• Next Gen Stem Cell

• Cancer Screening

• Biosimilars

• 3D Scaffolds

• Molecular ScissorsInformation and Communication

Technologies

• XaaS

• Cybersecurity

• Artificial Intelligence

• Mixed Reality

• Predictive Analytics

• 5G

• Cognitive Computing

• Software-defined Anything

• Neuroprosthetics

• Optical Coherence

Tomography

• X-eluting Stents

• Nuclear Imaging

• Smart Pill

• Wearables

• OLED Lighting

• SiC Electronics

• Transparent Electronics

• Rapid Charging

Sensors and

Instrumentation

Environment and

Sustainability

• Lithium Batteries

• Home Energy

Management

• Tight Oil Extraction

• Waste Heat Recovery

• Microgrid

• Waste-to-Energy

• Precision Agriculture

• Micro Irrigation

• Off-grid Desalination

• Wastewater Membrane

Filtration

• Commercial Drones

• Biosensors

• Terahertz Sensing

• Next Gen RTLS

• Smart Haptics• Lightweight Materials

• Bio-based Materials

• Nanocoatings

• Graphene

• Self-healing Materials

• Smart Packaging

Advanced Manufacturing

and Automation

• AdditiveManufacturing

• Digital Manufacturing

• Collaborative Industrial Robots

• AgileRobots

• Robotic Exoskeletons

Medical Devices and

Imaging

MicroelectronicsEnergy and Utilities

Chemicals and Advanced

Materials

Strategic Opportunities Matrix

XaaS

ICT, Automotive, and healthcare sectors

are experiencing rapid transformation

across the value chain. Acquisition and

technology licensing are key expansion

strategies. XaaS market to reach $250B+

by 2020.

$45B+ cumulative market size between

2016 and 2021. Desktop, ‘Prosumer,’

and household 3D printers will find

large-scale use along with 3D printing as

a service.

Additive

Manufacturing

$234B cumulative market potential

between 2015 and 2020. The market is

driven primarily by growth in the

consumer electronics, automotive and

aerospace sectors.

Lightweight

Materials

Size of the bubble

indicates

innovation index

Sector Adoption

1 2 3 4 5 6 7 8 9 10

AM

XaaS

DM

CIR

AR

LB

CSe

AI

LMWe

OL

CD

WTE

MR

PA

NP HEM

5G

TA

PrecA

CC

OCT

SiCE

BS

MI

NGSC

OD

BM TOE

RE

WHR

NC

XES

THz

Gr

TE

RTLS

CS

WMF

SM

Bsim

RC

NI

SH

SDxMG

3DS

Spill

SPMS

750M 50B 100B 250B >250B25B10B1B

Market Potential

< 250

251-500

501-750

751-1000

1K-5K

5K-10K

10K-25K

25K-50K

50K-100K

> 100K

IP X

AM

LM

7

Mixed Reality

8

A market with several big participants focusing on

hardware development and start-ups with

software innovations is likely to experience

several actuations in the coming years.

Improving the Energy Efficiency and Compact Design will Boost Sales

Cumulative Market Size (2016-2020)o Magic Leap, Florida

o Samsung, Korea

o Oculus VR, California

o Avegant, California

o Qualcomm, USA

o Microsoft, USA

o Sony, Japan

o MindMaze, Switzerland

Initially Augmented Reality (AR) was a major revenue generator

in the Mixed Reality (MR) space with very little contribution

from Virtual Reality (VR). However, recently, with several VR

product launches from big participants, the Mixed Reality space

is rapid growing and offering new opportunities for application

developers.

o Mixed reality is going beyondsmartphones to immerse users intechnologies ,and blurs the linebetween the physical and virtualworlds.

Smartphones have drasticallyimproved customer engagementthrough improved user experience.MR wearables are expected to bringin a more immersive experience tothis engagement.

o Mixed Reality glass is one of the major

areas of development at present.

However, there are a few challenges like

lack of efficient battery technology,

effective content management and

advanced material technologies. These

areas are gaining attention from

developers to deliver more compact,

lightweight MR glasses that can seamlessly

access content in an energy efficient

manner.

o Enriched user experience and

cost effectiveness of MR

glasses are two key areas of

concern at present for MR

adoption.

o Lack of standardization and

legal aspects will hinder its

adoption rate in industries like

healthcare and defense.

o The framework of easy

compatibility will boost

technology development.

MR will disrupt

mobile computing

Factors Critical for

the Target Industry

Companies to Bet on

Business Models to think of

Acquisitions will be prominent

9

Venture Funding Primarily Driving Innovations Across the Globe

Funding deals for start ups have

increased significantly since Q4 of

2014. In the first 2 quarters of 2015,

around 40 deals have been closed in

the mixed reality space.

Government initiatives for Mixed Reality is

not very significant till date, except a few,

such as Khazanah Nasional Berhad

(investment fund of the Malaysian

government) that has invested $54 million

in Blippar, the artificial intelligence-based

AR technology start-up.

The key areas of investment are for the

development of Healthcare

applications, mobile applications and

supporting hardware development.

Microsoft

Microsoft is the major patent holder in the mixed reality space

with over 500 patents, followed by other major participants such

as Canon, Google, IBM, Panasonic, Sony, Nant holdings IP, and

Qualcomm to name a few from the top 10 list.

North

America

North America, specifically USA, is the key region for technology

development which is prominent from the top developers list with

a majority of the firms based in the region. China is also showing

rapid growth in recent years.

US$542

M Series B funding received by Magic Leap in

2014 Q4

One of the largest funding deals for the VR space,

led by Google, Qualcomm Ventures, and KKR

among other investors that is focused on

development of the prototype.

Funding Trends

9000

Patents

Across the 5 major patent offices, a total of around 9000 patents

have been granted in the last 3 years of which around 6000 plus

patents have been granted in USPTO alone.

2013 2014 2015

2098 2588 2830

United States Patent

and Trademark Office

2013 2014 2015

237270 272

European Patent Office

2013 2014 2015

22 4064

Japan

2013 2014 2015

31 36

124China

2013 2014 2015

166

111 127

Korea

10

Gaming, Entertainment, and Education will Experience Maximum

Impact in the Short Term

o Gaming and entertainment – is experiencing the earliest impact

from mixed reality technology to enrich user experience.

Following the commercialization of affordable VR-based gaming

consoles, this sector is likely to be hugely impacted by this

technology in the short term.

o Education sector will have potential benefits of VR, leveraging the

simulated knowledge environments delivering better insights and

engagement in training processes. There will be a medium impact

in this space in a medium time period.

o Automobile and transportation industry will have a medium impact

from Mixed Reality technology. Virtual simulation will aid in design

to achieve perfection. It is expected to face convergence in the

medium term. On the other hand, AR will help in enhancing the

infotainment features in vehicles.

o Aerospace and defense can leverage VR in simulating training

programs. VR will help in delivering the best simulations with real-

life scenarios and augmenting information for better learning

processes. Mixed reality will also help improve customer services

through entertainment applications in-flight. Considering the strict

regulatory standards for screening technology accuracy levels in

this sector, large-scale adoption would be in long term.

o Healthcare – This sector will have an impact in the medium term

through the implementation of training applications at the

beginning. However, further enhancement of the technology could

also help Mixed Reality to penetrate into critical application areas

like real-time remote surgeries.

Short Term

(2016-2017)

Long

Term

(>2020)

Medium

Term

(2018-2019)

Gaming and Entertainment

Healthcare

Aerospace and Defense

Automotive and Transportation

Education

11

North American and Asian Countries will Experience Rapid

Penetration

Disruptive Index

8/10 TechVision analysis notices a high disruptive index for Mixed Reality. This signifies that Augmented Reality and Virtual

Reality services are bringing in significant ‘Step Changing’ innovations across sectors of economic activity.

o Canada and USA have been exhaustively working

on innovative R&D projects on MR solutions.

Several universities and research institutes have

been actively exploring new dimensions in this

space. Supported by federal bodies, such as the

National Science Foundation, these research

projects are focused on applying AR and VR in

various fields, such as healthcare, defense and

education. This region also is blessed with several

top technology developers in this space.

o The region is primarily focusing on developingenabling technologies for now. The EuropeanUnion and Germany are leading the space inresearch in VR. The EMOSPEECH project hasbeen extensively working on integrating speech-based emotions in VR. The German companySensoMotoric Instruments GmbH is researchingthe implementation of eye tracking technologiesto VR, making it more responsive. However, thisregion is focusing on the highest revenuegenerating hardware segment for AR and VR thatwill facilitate adoption considerably across theglobe.

o Japan is actively looking into VR. Companies like

Nintendo and Sony are making huge investments in

R&D as well as acquisitions to make a mark in the

global MR market. Another company Capcom,

originally a gaming company, has started an initiative to

implement VR into gaming and entertainment. Another

key region is Korea, which is actively participating in

the MR space. Key innovators like Samsung and LG

along with many other start-ups are pushing hard to

commercialize their products.

Most Revenue

Generating

Market

Enabling Technologies

from the Region

Facilitating Adoption

Growing Fast and

Pushing Hard to

Commercialize

Products

ME

GA

TR

EN

D

IMP

AC

T

6

Mixed Reality

directly impacts 6

megatrends as

identified by Frost

& SullivanConnectivity and

ConvergenceBricks and Clicks

Health, Wellness, and Well-Being

Future of Mobility“Smart” is the New Green

New Business Models

12

Technology Licensing is the Key Strategy for Expansion among Large

Corporates

o Microsoft HoloLens is a classic example of

mixed reality that leverages a set of

sensors, stereoscopic 3D HMD and spatial

sound technology to interact with

Augmented Reality applications through

natural user interfaces. In addition,

Microsoft has also launched the HoloStudio

application for 3D modeling.

Microsoft is the pioneer

in mixed reality research

Magic Leap is

revolutionizing VR and AR

Asuka Lab Inc. Is innovating applications

o The US-based startup is utilizing its huge

rounds of funding from top ventures like

Google and Alibaba, toward development of a

cinematic VR device. The Magic Leap device

eliminates the need for VR glasses, instead, it

uses a head-mounted virtual retina display to

project objects directly in the eyes of users.

o The research lab from the University of

Tokyo, is working toward development of

a cross-platform software library for

applications development. The platform is

offered as an SDK to application

developers that can be seamlessly

integrated into any HMD for mixed reality

applications.

o PlayStation VR is a hardware and software

integrated system from Sony that uses a VR

Gear HMD device along with its standalone

application platform to provide a fully

immersive experience that can be linked

with the PlayStation platform.

Sony is delivering next-

generation gaming

Facebook bringing VR

to social media

Jaunt is focusing on

cinematic VR

o Acquisition of Oculus VR by Facebook is

primarily aimed at developing a new social

networking platform leveraging convergence

with the virtual environment. Considering the

fact that the future of computing and

communication will be entirely dependent on

mobile and wearable devices, the initiative

focuses on new experiences of communication.

o Palo Alto-based Jaunt is aiming to innovate

the future of immersive viewing experience

through its cinematic VR solution for

entertainment. Leveraging advanced

algorithms and computational photography,

the aim is to bring the virtual reality

experience into mainstream entertainment.

Other Innovators:

Qualcomm Samsung Oculus VR Mindmaze

13

Key Questions for Strategy Planning

Key Questions

for Strategy Planning

How Can Cloud Computing improve Mixed

Reality systems ?

With convergence of cloud systems with mixed

reality systems, most of the software and data

content of the system can be distributed to the

cloud server. This will allow the MR system to fully

utilize the storage for improved user experience

instead of using its processing power and storage

space for keeping big amounts of data.

How can we improve the energy

efficiency of MR Systems ?

Running Virtual Reality on a HMD device requires

sufficient amounts of energy, which is one of the key

challenges with the present systems. With the

introduction of materials such as graphene, thin-film

thermoelectrics for future MR devices can enforce

renewable energy materials that may boost energy

harvesting from MR systems.

What are the key areas of development to

make MR systems more compact ?

Nanotechnology can play a vital role in this aspect.

The capabilities of nanotechnology are boundless.

The main modification to hardware that

nanotechnology can provide is the compact

features in a tiny sized IC or transistor. With the

introduction of nanotechnology into MR systems,

future HMDs will be extremely compact and

lightweight.

How can the industry overcome

integration challenges for software

and hardware ?

Standardized frameworks could play a significant role in

addressing integration challenges. Initiatives like Open-Source

Virtual Reality Consortium and Extensible 3D (X3D) by

Web3D Consortium could help to bridge the gap. However,

there is also a requirement for regulation and policies for

security enhancements of the system.

Waves of InnovationLeveraging points of convergence

3D

PRINTING

SENSOR

FUSION

LIGHTWEIGHT

MATERIALS

New paradigm in

Industry 4.0 paving

the way for new

players with

disruptive potential

Lightweight

frames for

aerospace,

defense,

automotive

PREDICTIVE

DATA

ANALYSIS

Controlled

3D printing

for predictive

maintenance

Augmented Reality for Enhanced User ExperienceVirtual systems for consumer, defense, education, gaming

Energy

Harvesting

Light Weight

Materials

Wearable

Electronics

Augmented

Reality

Smart Haptics

Connected FarmingEnabling effective smart farming

Context-aware

Computing

Predictive Analytics

XaaS (Everything-as-

a-Service) Platform

Machine LearningEnergy Harvesting

M2M Communication

Sensor Fusion

DronesWater-energy Efficient

Technologies

Smart Sensors

17

HAPTIC-ENABLED REMOTE ROBOTIC SURGERIES

18

KEY INITIATIVESTECHNOLOGY READINESS LEVEL

1 2 3 4 5 6 7 8 9

Smart

Haptics

x x

x x

5G Networks

x x

x x

Artificial

Intelligence

x x

Outcome-focused care delivery through XaaS-focused

business model

+Haptic-enables Remote Surgeries

for Hospitals

Smart Haptics

Surgical Robots

Haptic-enabled

Remote Robotic

Surgeries

Frost & Sullivan envisions a scenario where operating rooms in hospitals are equipped with Surgical Robots that help surgeons receivehaptic feedback from experts remotely connected through 5G network. Embedded with Artificial Intelligence solution, the Surgical Robotsindicate surgeons to analyze the patient's clinical data via a cloud-based platform, thereby improving the precision of surgery through theadoption of an Everything-as-a-Service (XaaS)-based care delivery model.

5G Networks

Artificial Intelligence

+XaaS

Surgical

Robots

XaaS

Telelap ALF-X developed by

SOFAR, Italy features haptic

feedback, allowing surgeon

to feel tissues being

manipulated during

surgeries.

Google partnered with

Johnson & Johnson’s

medical device company,

Ethicon, to develop a

surgical robot that uses

artificial intelligence.

Many large IT companies

such as Microsoft, Verizon,

Philips, and AT&T have

launched cloud-based

healthcare services that are

being rapidly adopted by

hospitals globally.

19

Significant decrease in patent filing activities worldwide

2013 2014 2015

3,3912,677

1,535

United States Patent and Trademark Office

2013 2014 2015

78

28

2

European Patent Office

20132014 2015

6325

12

Japan

2013 2014 2015

7958

41

China

Recent Patenting Trends for Converging Technologies

(Cumulative), Global, 2013-2015

Key Funding

Recent Technology Trends

Haptic Feedback + Surgical Robotics April 2016 – Surgeons performed the first robotically-assisted total hip

replacement operation at Brisbane's Holy Spirit Northside Hospital

using the MAKO robotic arm. It combines robotics, navigation with a 3-

D representation of the patient's pelvis and femur, along with haptic

feedback while performing the surgery.

Artificial Intelligence + Surgical RoboticsMarch 2015 – Google partnered with Ethicon to create a robotics-

assisted platform to help surgeons perform minimally invasive

procedures. The system features Artificial Intelligence tools such as

machine vision, image analysis, and advanced imaging sensors to

highlight blood vessels, nerve cells, and other tissues.

Cognitive Computing + Disease DiagnosticsDecember 2015 – India's third-largest hospital chain, Manipal Hospital,

entered into a partnership with IBM to use the latter's cognitive

computing platform to help doctors deliver better cancer care and

treatment to patients. IBM Watson can analyze over 15 million pages

of stored patient data and archived clinical records, offering critical

insights on prognoses for doctors.

5G Network + HealthcareApril 2016 – Finnish vendor, Nokia, and Turk Telekom, a Turkish

mobile telephony operator signed a memorandum of understanding

(MoU) on testing 5G and the Internet of Things to develop solutions

that will cater to a wide spectrum of industrial applications including

healthcare.

Year Tech Company Amount Convergence

2016 Advanced medication

adherence solution

AiCure $12.25

million

Artificial

Intelligence

2016 Anytime, anywhere

access to critical

medical information

Ekincare $0.329

million

XaaS

20

Smart haptic-enabled remote surgeries entail the

creation of a hybrid operating room

With the increasing number of patients beingoperated on each day, surgeons often facemuscle fatigue and other discomforts fromhandling surgical instruments during surgery,resulting in compromised patient outcomes.

Increasing reliance on surgical skillswhile performing complex surgeries caninvolve the creation of large surgicalincisions, leading to possible increasesin pain, blood loss, scarring, and risk ofinfection and tissue trauma duringsurgery and the post-surgical recoveryphases.

While remote interventions areenabled by surgical robotic systems,current communication networks inresource-constrained hospitals oftencreate a serious lag time incommunicating patient records andmedical images with remote surgeonsduring complex procedures.

What are the key market challenges?

1Real-time haptic feedbackThe use of advanced simulation enables haptic

feedback, offering critical insights to remote surgeons

using surgical robotic systems, thereby reducing errors

and complications of surgery.

2Integrated surgical platformThe implementation of advanced 5G networks within

operating rooms enables visual enhancements of the

surgical field to the remote surgeons handling robotic

systems.

3Low footprint of robotic systemsModern surgical robotic systems have a very low

footprint within operating rooms, thus they can save

costs to completely revamp existing operating rooms.

4Cognitive networks improve precision5G networks with Artificial Intelligence on clinical data

improve remote surgeons’ access to mechanical

dissection and retraction while performing surgeries.

Key Market Opportunities

2017–

2018

2019–

2020

>2020

5G-enabled Cognitive Surgical Robot:

Apple and Alphabet are exploring

applications of artificial intelligence (AI)-

enabled analytics on clinical data that

will improve the performance of

computer-assisted surgeries. The large-

scale adoption of 5G by 2020 will enable

the use of smart Surgical Robots.

Flexible Robotics for the Military:

Flexible robotic arms designed as an

endoscopic system will incorporate designs

that can be helpful to non-surgeons. The

technology can be used to perform

minimally invasive procedures on wounded

soldiers by military medics.

Cognitive Surgical Robots:

Google's life sciences division, Verily,

has partnered with Ethicon to develop

next-generation robotic systems with

artificial intelligence capabilities with

haptic feedback mechanisms that are

likely to enter commercial markets by

2018.

Upcoming Trends

21

Early strategic investments in research help sustain

competitive advantage

Haptic-

enabled

Surgical

Robot for

Remote

Surgeries

NeuroArm Project

Objective: Develop an image-guided and MR-compatible

dexterous surgical robotic system with telementoring,

capable of performing both microsurgery and stereotaxy.

Partners: University of Calgary, Alberta Health Sciences,

IMRIS/Deerfield Imaging Inc., Stryker, Medtronic,

National Research Council of Canada

Funding: Several Canadian economic development

resources

The Raven Surgical Robot

Objective: This is a laparoscopic surgical robot with an updated

design incorporating advanced technologies such as haptics,

computer vision, augmented reality, cooperative telesurgery, and

human-machine interface.

Partners: University of Washington, University of California (UC)

Santa Cruz, Harvard University, Johns Hopkins University,

University of Nebraska, UC Berkley

Funding: National Science Foundation

Intelligent Surgical Robotics (ISUR)

Objective: Create cognitive surgical robots that are capable of sensing,

with dexterity and cognitive capabilities to perform simple surgical

actions such as puncturing, cutting, and suturing autonomously.

Partners: University of Verona, Tallinn University, Fondazione

Centro San Raffaele, Oslo University Hospital, Yeditape University,

ETH Zurich

Funding: European Union Seventh Framework Programme

FP7/2007–2013

The EUROSURGE Project

Objective: Develop an integration platform for computer- and robot-

aided surgery, incorporating sensors and actuators operating

independently or semi-autonomously with cognitive capabilities.

Partners: University of Verona, Politecnico di Milano, Karlsruhe

Institute of Technology, University of Bremen, Harvard University

Funding: European Commission in the FP7-ICT-2011-7

Blue Belt Technologies

Objective: Minnesota-based Blue Belt Technologies has created a robotic

system for uni-compartmental knee-replacement surgeries (UKR), named Navio.

The surgical system offers a computer-guided planning and navigation system

for technically challenging orthopedic surgeries.

Partners: Carnegie Mellon University's Center for Technology Transfer and

Enterprise Creation (CTTEC)

Funding: Acquired by Stryker

Simulated Surgical Systems

Objective: California-based Simulated Surgical Systems collaborated with the

robotic surgery department at Roswell Park Cancer Institute and the virtual reality

laboratory at the University of Buffalo. It has developed a robot-assisted surgery

simulator for training surgeons to reduce errors and improve their skill set.

Partners: University of Buffalo, Roswell Park Cancer Institute

Funding: Simulated Surgical Systems

22

Strategic partnerships are key to deliver XaaS Tele-

surgeries

Hybrid Operating

Room

Artificial

Intelligence

5G

Networks

XaaS

Platforms

Smart

Haptics

Remote Surgeons

Remote Surgeons

Remote Surgeons

CONNECTED & COLLABORATIVE SURGERIES THROUGH SMART HAPTICS

Creation of a hybrid operating room with a robotic

surgical platform with haptic feedback connected to

remote surgeons via 5G network

Artificial intelligence on patient’s clinical records are

accessible through XaaS-hosted services to

designated remote surgeons

COLLABORATIVE SURGERIES

Collaborative telesurgeries

through remote

consultations

XaaS-hosted patient

clinical data management

with remote surgical

control

Advanced surgical training

by remote experts

KEY SERVICES

VALUE PROPOSITION: Connected and collaborative surgeries via advanced

communication networks in resource-constrained hospitals

KEY PARTNERS: Cloud vendors, robotic surgical original equipment

manufacturers (OEMs), 5G network providers, artificial intelligence platform

developers, surgical centers

KEY RESOURCES: Robotic surgical system with haptic feedback mechanism,

hybrid operating room designers, remote surgeons, cloud-hosted and secure

health records, 5G network

CUSTOMER RELATIONSHIP: Expert intervention, quick turnaround time,

informed outcomes

BUSINESS MODEL

PARTNERSHIP

ECOSYSTEM

PARTNERSHIP ECOSYSTEM

The partnership networks for smart, haptic-enabled remote

surgeries involve effective partnerships among cloud

vendors, artificial intelligence platform developers, surgical

robotic system developers, and network providers.

‘Innovative Convergence’ Drives Solutions!

Let’s Talk Innovation…

Ankit A. ShuklaPractice Director & Global Head of Growth Consulting

ashukla@frost.com

@TechVision_FS

www.frost.com/techvision