Spatial Computing... The New Buzzword for 2024?

Every year the media hypecycle inadvertently crowns a new trend that dominates the tech and investor discourse. Last year, Generative AI, the year before that, the Metaverse. This year, amidst the antipication of Apple’s first foray into the Virtual Reality market, the phrase on everyone’s lips is Spatial Computing…

But what actually is Spatial Computing, and what can we expect from it in 2024?

To answer this question, FOV Venture’s were joined by Tom Emrich - a luminary with over a decade of experience in the world of AR/VR - and Amy LaMeyer - Managing Partner of WXR Fund, investing in spatial computing and AI companies committed to equal gender representation.

The discussion centred around Tom’s annual AR/VR predictions… which, in the past, have been so eerily correct he is often hailed as ‘The Man From The Future’.

You can watch the whole discussion below, or catch-up in a few minutes with the article below.

Prediction: Spatial Computing knocks AI off the Hype Cycle

Each year, the media effectively has capacity for one thing. What then ensues is a hype, and centralising of discourse over that singular topic.

While Apple is entering the ‘VR space’ - with the release of the Vision Pro headset - they are hoping to using "Spatial" terminology instead of AR/VR/MR/XR.

In fact, Apple are so determined to recategorise the space they are setting strong boundaries against using AR/VR/MR/XR terminology. Likely allowing Apple to win SEO, re-invent semantics and set the discourse of the industry.

As such, everyone this year is talking about Spatial Computing.

Through the Gartner Hype Cycle, each trend builds momentum to the “Peak of Inflated Expectations”, where it is so prevalent in the zeitgeist it is impossible to escape from.

Short of going too much into the hype cycle methodology, what’s noteworthy is that the last few years’ most hyped technologies - The Metaverse, Web3 and especially AI - come to a natural convergence in ‘Spatial Computing’.

Tom notes, Apple has a way of leading the language in a category, and Spatial as term allows them to be reinforced by significant advancements in the technologies enabling computers to perceive, interact with, and navigate 3D space, all, ultimately, underpinned by AI and ML.

Effectively, Spatial Computing is, well, everything that pertains to technology that relates to our perception of the world around us.

In 2024 this will increase the relevance of technologies like LiDARs, projection mapping, and even wearables.

Prediction: Spatial Computers Give Us a Glimpse into The Future of Work.

While not new (by any means!), the acceptance of MR (sorry Apple!) devices in the workplace, and for training is becoming normalised.

Significant now, for investors in the space, is that companies have been able to grow and raise late stage capital based on these enterprise applications.

​For example, in Q4 2023, Transfr raised a $40M Series C led by ABS Capital for a VR-based skills training platform.

Tom previously gave an AWE Keynote, The Death of Reality, alluding to textbooks and videos going away as we increasingly simulate in AR/VR what we are trying to learn.

In 2024 we may see the ‘infinite canvas’ (desktop screens in VR) finally realised. While Immersed, have been pushing this for years the Vision Pro’s ability to integrate with Macbooks and show text in 3D at a high resolution make this much more realistic. The result of this could well be a ‘bottom up’ - rather than employer mandated - adoption of VR for work and productivity.

For Amy, these use cases are already somewhat killer use cases, they just need a long maturation cycle. Amy believes what we are seeing is just a “glimpse” of the future, with cost and comfort of devices still a limiting factor today.

Prediction: Reliving Memories Becomes a Killer Use Case.

At the Vision Pro launch, Apple showcased demos allowing users to relive past memories captured via spatial cameras, present on both the iPhone 15 and Vision Pro headset.

For Tom, there is something so meaningful about this as a use case - referencing older iterations of similar lower fidelity tech such as the InstaOne camera - that is has the ability to elevate something as central to computing as photos.

Apple’s full stack integration, connectivity from the photos on iCloud or the iPhone 15 Pro’s camera is hugely significant here. Almost removing all friction for Vision Pro users to experience spatial memories.

Making the iPhone part of the Vision Pro is smart. Tom predicts we will see similar immersive integrations with Macs, Apple TV, Apple Watch etc. and mentions this is an area Meta haven’t capitalised on with the Quest headsets.

While unclear what the space for startups is here (who is the Instagram for spatial?) there have been some movers, like Stageverse and Wist.

Prediction: Natural Interactions Will Replace Pinch-and-Zoom, Tap, and Swipe.

The Apple Vision Pro will ship with no controllers.

For VR users, this is significant. The last decade of VR use has predicated on interactions in 3D using tracked controllers and traditional button mapping.

But not on the Vision Pro. Apple is seeking to make a more immersive experience, using simply gaze, speech and small hand gestures for control.

We will see what this leads to in the developer ecosystem, and it will be interesting to see the experimentation especially in more creative fields like gaming.

This advancement, along with the work of startups like Doublepoint, will allow us to more naturally interact with computers, signalling the beginning of the end for the mouse and keyboard.

Tom believes there is likely to be a new visceral reaction to this. Not typing on a keyboard will be jarring, and require a social shift.

But, in the past we have seen Apple ship devices without expected features (Headphone Jack, CD-Drive, USB ports etc.), and each time they have pushed the consumer into a new way of device interaction. We expect controllers to go the same way.

So what about investors?

Expecting the Vision Pro to sell out - although reports of low shipment numbers - Tom sees this as the next blue ocean opportunity.

The app store is a proven place for developers to win big, as we saw in the early iPhone days. However, the blue ocean opportunity for smartphone applications has subsided as the catalog has become quite crowded, and users have hit app download fatigue. The new blue ocean opportunity for developers is with mixed reality headsets, especially now that the major tech giants are all in on this device category.

Amy is more skeptical, believing AI still seems more logical opportunity, while the blue ocean does not have a clear plan for traction and revenue in the short term when Vision Pro shipments are low. There have been many pitches with grand ideas for the Vision Pro, but especially at the seed stage is there really a business there yet?

Unlike the smaller VR/Meta Quest market, people within Apple’s ecosystem already may have more of a chance, pivoting iPad/iPhone apps to Vision Pro while still falling back on the 650 million weekly visitors to the Apple App Store.

But the Meta ecosystem does look increasingly healthy. Apps can do significant revenue and make a living from VR games. The present upside comes from the ~700 apps on the Quest Store vs. the crowded 1.8 million strong iOS store.

Investing in XR in 2024 will likely still be contrarian, with a more realistic turning point being Gen 2 of the Apple Spatial Computing ecosystem.

However, being contrarian is very much a part of the Venture Capital game. As such, there are still dollars out there to be deployed in XR.

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At FOV we are happy to receive information from XR companies looking to raise! Apply here!