Apple's Metaio Acquisition Could Be a Game Changer (Above Avalon Premium Sample)

Along with weekly Above Avalon posts accessible to everyone, I write 2-3 stories about Apple each day covering a range of topics delivered exclusively via email ($10/month or $100/year). The following story was included in the email sent on June 1, 2015. To sign up, visit the membership page.   

While most think Apple is asleep at the wheel, busy spending all of its cash on share buybacks, evidence continues to add up that Apple is planning for the future. News broke late last week that Apple bought Metaio. Even though Apple confirmed the deal by providing the typical PR response about buying small companies from time to time, signs point to this Metaio acquisition being a bit different. There is evidence to suggest this is a big deal in terms of implications on future products and services. 

Metaio is a leader in augmented reality (AR) and co-founders Thomas Alt and Peter Meier are considered some of the industry's pioneers. Even though Metaio is called a "start-up," the company has been around for over a decade and actually had its founding as a research initiative from VW back in 2000. In one keynote, Alt introduced Metaio with "we've been around forever." Metaio even organized the biggest AR conference each year. Simply put, I have a hard time seeing Metaio selling to Apple without something significant coming from this. That theory is also supported by Apple's track record with M&A where they typically buy companies and technology with a clear goal in mind, often to plug a hole in product strategy.

Last year, Thomas Alt gave a talk that touched on a few reasons why I suspect he may have went on to sell to Apple. 1) monetization remains hard in the field 2) it is becoming increasingly more difficult with the resources Metaio had to track unknown, or outdoor environments, and not just a closed, indoor environment. Said another way, Metaio may have run its course as an independent company and needed a bigger partner to reach its future goals, including the much bigger mission of getting the AR industry off the ground.

The impressive thing about Metaio is the entire vertical chain of products that they offer from Metaio SDK/Creator/Cloud and Junaio (an AR browser across platforms). The company has 140,000+ developers (many of which aren't happy with this sudden news of an acquisition), 1000+ B2B customers including eight automakers, 130 employees, and a patent and IP portfolio. 

What can AR be used for? Metaio had previously marketed itself to industrial clients for the following use cases: digital manuals, training education, monitoring, accessories and spare parts (think cars), customer service, inspection, and remote maintenance. 

AR has a very basic premise: interact with the world. The problem I have had with many AR use cases (and increasingly much of the hardware developed for AR) is that it is very obtrusive and distorts reality to such a degree that I think side effects are created. If there is a way to position AR as a way of actually improving reality and not just adding more noise, I can see Apple moving forward with such initiatives. 

It is very easy to see that Metaio has been heavily involved in the auto market and the concept of the augmented city. There are many interesting possibilities around this use case, building off of AR's primary value of helping to navigate the world. Add this acquisition to Apple's Primesense acquisition (which one of Metaio's co-founders had previously classified as interesting), and I think the concepts of both indoor (and outdoor) mapping where depth and mobility are present start to head in the direction Apple may be headed.  

Metaio's developer tools and prior discussion around AR's biggest road block being the lack of relevant content would suggest that Apple may look to bring developers into the fold which would not only give AR a big shot in the arm, but support Metaio's vision of getting AR off the ground. 

One theme that is apparent these past few months: there are a growing number of signs that Apple is building and planning for future (unannounced) initiatives. This acquisition firmly places Apple in the augmented reality game, and I suspect the end goal is much bigger than just gaming and other gimmicky demos. 

In addition to the preceding post, Above Avalon members received the following articles this past week (100 percent related to Apple). To read these stories and to receive future stories via email, sign-up at the membership page

  • Tim Cook's Stance on Privacy Isn't Actually About Your Data
  • The Chess Game Heading into WWDC
  • Odds of Apple Replacing Google as Default Search in Safari Going Up
  • Apple Music is Sounding More Interesting
  • A Closer Look at Apple's Services Business Segment
  • New iPhone Ads
  • iPhone Sales Share - April Update
  • Jay Blahnik Touting Apple's Health Strategy
  • Next Phase of Apple Watch Retail
  • Google I/O
  • IBM Loves MacBooks