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Marketing High Techn ology – Professor Laura Kornish

Augm ented Reali ty (AR)

Applications and Adoption of an Emerging Technol ogy

Laura Kornish Augm ented Reali ty (AR) Applications and Adoption of an Emerging Technol ogy by

by Tim Falls

Contents

Contents 2 I. Introduction 3 II. What is Augmented Reality? 3 Augmented Reality Defined 3 A

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I. Introduction

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II. What is Augmented Reality?

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Augmented Reality Defined

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A Brief History

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III. Applications of Augmented Reality

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Business

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Societal Change

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IV. Adopter Groups

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V. Marketing AR

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Actions to influence decisions

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VI. The Future of AR

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Trend or Revolution?

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The Experts Weigh In

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IMHO

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VII.

Works Cited

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3 I. Introduction In the early 1990’s I was a rabble-rousing kid skateboarding around downtown

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I. Introduction

In the early 1990’s I was a rabble-rousing kid skateboarding around downtown Evansville, IN. One of the fondest memories I have from those simple summer days was the day I discovered this “thing” called Virtual Reality. While cruising along my normal route, I came across a large crowd of people gathered for a festival of some sort. Inquisitive as I was, I decided to explore. The first thing that caught my attention while meandering through the crowd was a giant stage on which a life-size gyroscopic structure was mounted. Within this spherical construction, was a person secured by straps, wearing goggles, and spinning about in every possible direction. I had

no idea what this was, but I knew it looked fun; therefore, I had no choice but to check it out for myself. Once I was strapped in, I was suddenly “sitting” in the cockpit of a bi-wing plane and quickly took off on my “virtual” flight through the beautiful surroundings of a world that had

little resemblance to Indiana.

And so my interest in technology was born.

Returning to present day, virtual reality has become a fad of days gone by in terms of its common, everyday use. A new technology known as Augmented Reality has emerged into mainstream society, and once again my interest has been sparked.

Within this report, I will (a) define Augmented Reality, (b) explore its various applications, (c) discuss the adopter groups and marketing techniques that might propel the technology into our everyday lives, and (d) postulate on the future role of Augmented Reality in our lives.

II. What is Augmented Reality?

Augmented Reality Defined

Augmented Reality (AR) is simply a variation on Virtual Reality (VR). While VR immerses a user in a synthetic environment and prohibits the user from seeing the real world around him, AR allows vision of the real world, with virtual objects superimposed upon that real-world view (Azuma, 1997). Another expert’s definition of AR explains that it involves “computer displays that add virtual information to a user’s sensory perceptions” (Feiner, 2002). In terms of the relationship between AR and VR, this same author explains, “Whereas virtual reality brashly aims to replace the real world, augmented reality respectfully supplements it.” In other words,

4 a user of AR can experience “a live direct or indirect view of a

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a user of AR can experience “a live direct or indirect view of a physical real-world environment whose elements are merged with (or augmented by) virtual computer-generated imagery – creating a mixed reality” (Various, 2009).

To offer some simplicity to this definition, Ronald Azuma, Ph.D., Research Leader at Nokia Research Center Hollywood, points out that AR is a system characterized by the following three attributes: (1) it combines real and virtual, (2) it is interactive in real time, and (3) it is registered (i.e., perceived by the human brain) in three dimensions (3-D). He also offers the following observation as to why AR exists: “AR enhances a user’s perception of and interaction with the real world…[conveying] information that the user cannot directly detect with his own senses…[in order to help] a user perform real-world tasks” (Azuma, 1997).

A Brief History

The first AR prototype system was developed in the 1960s at the universities of Harvard and Utah, by computer graphics pioneer Ivan Sutherland and his students. Then, in the 1970s and ‘80s, AR was studied at institutions such as the US Air Force, NASA, and the University of North Carolina. Finally, in the early ‘90s, the term “Augmented Reality” was coined by Tom Caudell, a researcher at the Boeing Company. Since then research and development efforts have boomed, hardware costs have fallen, and software has improved dramatically (Feiner, 2002).

Until very recently, all practical use of AR was “largely relegated to applications [for] training and inspection in automotive and aerospace manufacturing;” however, AR has recently made the leap from commercial-scale, capital intensive equipment to consumer-scale, affordable devices. In fact, as one telling example shows, this shift has been so drastic that a niche market of mobile AR applications for smartphones has emerged, growing from “virtually no users in 2008 to an expected 600,000 by the end of 2009” (King, 2009).

5 III. Applications of Augmented Reality Past, Current, Future The various and numerous applications of

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III. Applications of Augmented Reality

Past, Current, Future

The various and numerous applications of AR can be classified any number of ways. I have grouped the applications in terms of the manner in which they are used and the areas in which they provide value, including: (a) entertainment, (b) personal utility, (c) business, and (d) general societal impact – in order of their relative gravity. In the following pages, I will provide examples of applications in each category.

Entertainment

Television networks use AR to enhance the experience of its viewers. If you have ever watched a college or professional football game on television, you have experienced AR. Notice the image below, taken from the perspective of someone watching their favorite team on ESPN (Various, 2009).

watching their favorite team on ESPN (Various, 2009). Though most people take these features for granted

Though most people take these features for granted given their commonplace existence, both the yellow first down line on the field and the scoreboard/game-clock display come to the viewer by way of AR.

Video game technologies have been simulating AR in first-person-perspective games for many years through the use of “head-up displays” (HUD) such as the one shown here:

6 As you can see, the player has a plethora of information within his view,

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6 As you can see, the player has a plethora of information within his view, including

As you can see, the player has a plethora of information within his view, including a map, health and ammunition data, and a link to mission objectives. There are many such games emerging for mobile devices as well, such as Firefighter 360 pictured here:

devices as well, such as Firefighter 360 pictured here: (Presselite) Books and magazines , two of

(Presselite) Books and magazines, two of the more traditionally low-tech forms of entertainment, have also found ways to incorporate AR. The December 2009 issue of Esquire Magazine (shown below) has received significant attention for its interactive AR cover, which communicates with a webcam and “comes to life” for the reader – upon placing the AR image within the camera’s view, a three dimensional video plays on the reader’s computer screen through a web-based application . Beyond the cover, there are several pages within the issue presenting additional opportunities for interaction with the reader via AR.

opportunities for interaction with the reader via AR. Esquire has created an innovative way to enhance
opportunities for interaction with the reader via AR. Esquire has created an innovative way to enhance
opportunities for interaction with the reader via AR. Esquire has created an innovative way to enhance

Esquire has created an innovative way to enhance the reading experience by linking its physical magazine to a comprehensive collection of digital content that would never fit within the

7 confines of its printed covers (Sviokla, 2009). This unique employment of technology creates value

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confines of its printed covers (Sviokla, 2009). This unique employment of technology creates value for the stakeholders involved with such a publication, and thus, will be revisited in a later discussion of the business applications of AR.

Personal Utility

Some examples of products recently released to the consumer market illustrate how AR can increase the ease with which individuals operate in their everyday lives. GPS Navigation systems have become almost standard in today’s vehicles, whether the unit is built-in by the manufacturer, added by the owner as a standalone unit (e.g., Garmin, Tom- Tom), or simply built into one’s mobile phone. Due to the mobility of these devices, they are equally applicable to other forms of travel (i.e., walking, cycling.) The following image shows information a driver or pedestrian can expect from AR-enhanced GPS units:

driver or pedestrian can expect from AR-enhanced GPS units: (Sviokla, 2009) Augmented Reality Browsers have been

(Sviokla, 2009)

Augmented Reality Browsers have been developed to enhance the functionality of mobile web browsers. Companies such as SPRXmobile and Mobilizy have created the products Layar and Wikitude, respectively, which are sold in the form of applications for the iPhone and Android- based smartphones. These and similar applications (including the Yelp app for restaurant reviews) allow a user to view the world through their smartphone camera with layers of digital

8 information about the buildings, viewing area. The images below demonstrate select examples: landmarks, businesses,

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information about the buildings,

viewing area. The images below demonstrate select examples:

landmarks, businesses, and people that appea r in the camera’s

businesses, and people that appea r in the camera’s Business Augmented Reality is expected t o
businesses, and people that appea r in the camera’s Business Augmented Reality is expected t o
businesses, and people that appea r in the camera’s Business Augmented Reality is expected t o

Business

Augmented Reality is expected t o bring about notable changes in the business

which have already taken root.

marketing, customer/client relat ionships, and information/knowledge access.

world, many of

Aspects of business that may be impacted most include

Marketing departments around the world are experimenting with AR on an inc reasing basis. Examples of this trend include:

1. Lexus - placed an AR advertise ment in this month’s Esquire that actually pro

their own AR applications within

Monitor” and “Dynamic Radar C ruise Control.

motes the use of

newly available vehicle features termed the “ Driver Attention

2. Lego - installed what they call ed “Digital Box Kiosks” in hopes of turning “pro spect customers into paying customers” by allow ing shoppers to interact with the product befor e making a purchasing decision.

9 (ubergizmo.com, 2009) 3. Tobi – an online clothing retailer featuring a “virtual dressing room”

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9 (ubergizmo.com, 2009) 3. Tobi – an online clothing retailer featuring a “virtual dressing room” where

(ubergizmo.com, 2009)

3. Tobi an online clothing retailer featuring a “virtual dressing room” where an online shopper can upload a picture of herself and then “try on” different items. A user can then readily share these images with friends and gain feedback through social networks like Facebook or via email. Below is a screenshot of the site and its unique tool:

Below is a screenshot of the site and its unique tool: (Tobi Blog, 2009) Significant disruptions

(Tobi Blog, 2009)

Significant disruptions in the marketing landscape can be observed at a macro level as well. For example, a group of four agencies specializing in marketing, interaction design, advertising, social media, broadcast design and content development have joined forces to launch a new organization called Digital Marketing Collective (DMC). DMC’s founder says the group is intended to address the fact that “the marketing industry is undergoing a fundamental transformation as consumers and businesses shift their attention from traditional media – television, radio and print – to the internet, wireless devices, games and other digital devices” (PR.com , 2009).

10 Relationships in business may also be enriched by AR. The popular CRM software, SalesForce.com,

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Relationships in business may also be enriched by AR. The popular CRM software, SalesForce.com, could offer additional features by combining AR and face recognition software (standard technology in photo applications such as Picasa and iPhoto) to allow access to professional information about colleagues, clients, and companies via data retrieval from LinkedIn, Facebook, Twitter, etc. (Sviokla, 2009). This level of data access could prove helpful to the mobile business person at an industry conference, for example, by allowing instantaneous profile information through a mobile app. The image below shows this type of tool in use:

mobile app. The image below shows this type of tool in use: Training/Knowledge Most sectors in

Training/Knowledge

Most sectors in today’s workforce require of their employees a great amount of knowledge. Considering the immense amount of information the average employee needs at his or her immediate disposal, AR solutions are a perfect fit for a variety of business tasks. BMW recently released a concept piece exhibiting a mechanic wearing AR goggles, which presented step-by- step instructions for the replacement of an engine component. Tools such as this can boost a business’s efficiency by increasing employee productivity while simultaneously decreasing employee error. While the US military has been employing similar practices for some time, it seems likely that AR will become increasingly influential in the commercial space going forward.

11 Societal Change There are many applications of AR that have potential to create widespread

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Societal Change

There are many applications of AR that have potential to create widespread positive impact at a

higher, public level.

Healthcare is perhaps the area where AR could make its biggest strides by solving a critical flaw

in today’s healthcare system: a lack of information at the point of service (Sviokla, 2009). Just as

the mechanic uses AR for guidance through his task, so could a doctor performing brain

surgery. Beyond this somewhat obvious application of AR in health care, there are new and

innovative uses also being explored. For example:

One group of scientists is working to develop “a prototype portable health care support device for Emergency Telemedicine,” which would “telematically ‘bring’ a specialist doctor [to] the site of a medical emergency, allow him to evaluate patient data and issue directions to the emergency personnel on treatment procedures until the patient is brought to [the] hospital.” An AR system like this would “allow maximum utilization of available resources and offer a complete, practical solution for increasing survival rates before and during the transportation of accident victims to a hospital” (S Pavlopoulos,

1997).

The Military has been utilizing AR for years. Applications currently in use as well as those in

development will likely change the landscape of peacekeeping.

The Battlefield Augmented Reality System (BARS) is an excellent example. This system

addresses challenges faced by soldiers who find themselves in the urban battlefields of modern

warfare by increasing situational awareness and allowing more efficient military operations. All

of the tools described in the consumer and commercial applications to date can greatly benefit

a soldier who is navigating an urban environment (Mark A. Livingston, 2002).

The following images illustrate the experience from a soldier’s perspective:

12 Idealistically speaking, the application of AR in military settings will lead to improved safety
12 Idealistically speaking, the application of AR in military settings will lead to improved safety

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12 Idealistically speaking, the application of AR in military settings will lead to improved safety and

Idealistically speaking, the application of AR in military settings will lead to improved safety and quality of life for soldiers and civilians around the globe.

The U.S. Government is now using AR in a consumer-facing capacity through its Recovery.gov application, available on the iPhone and Android mobile operating systems. A company called Sunlight Labs has teamed with Layar to create a unique way for citizens to see where the American Stimulus funds are going. The screenshots below illustrate the application in use:

The screenshots below illustrate the application in use: (Rosen-Amy, 2009) An AR contact lens prototype rounds
The screenshots below illustrate the application in use: (Rosen-Amy, 2009) An AR contact lens prototype rounds

(Rosen-Amy, 2009)

An AR contact lens prototype rounds out my discussion of applications of AR technology, as it represents a truly futuristic example that could materially affect the way humans interact with their environment on a daily basis. A team of scientists from the University of Washington will

13 present their prototype at the Biomedical Circuits and Systems conference in Beijing in late

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present their prototype at the Biomedical Circuits and Systems conference in Beijing in late November 2009. Though such a product is years away from commercial viability, the technological feasibility is clearly within reach. As the director of the Human Interface Technology Laboratory in New Zealand put it, "A contact lens that allows virtual graphics to be seamlessly overlaid on the real world could provide a compelling Augmented Reality experience" for all members and sectors of society in the not-so-distant future (Venkatraman,

2009).

IV. Adopter Groups

Adoption: via Moore and Rogers

In the following analysis of society’s adoption of AR, I will speak in terms of Geoffrey Moore’s “Chasm” model, an adaptation of Everett Rogers’s “Diffusion” model. The basic concepts at hand are outlined in the following figure:

AR
AR

(Moore, 2002)

I would argue that AR has just landed on the Pragmatist’s edge of the chasm, as indicated above. The Technology Enthusiasts (Innovators), like Ivan Sutherland in the ‘60s, have been experimenting with AR for nearly 50 years, conducting research and awaiting improvements in component technologies (e.g., cameras, processors, displays, etc.) These advancements have made AR applications accessible and affordable to the Visionaries (Early Adopters), such as Tom Caudell at Boeing. Subsequent technological breakthroughs have finally put AR applications within the reach of the Pragmatists (Early Majority). Members of this group, such as

14 Recovery.gov, are now bringing AR to the Conservatives (Late Majority) through their acceptance of

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Recovery.gov, are now bringing AR to the Conservatives (Late Majority) through their acceptance of simple mobile applications. Further support of this movement is found in Layar’s recent announcement that it will receive over $1 million in venture capital funding to further develop its product offering (Marshall, 2009). The Conservatives are now beginning to experience regular exposure to AR through its prevalence in the marketing of consumer goods.

The combination of a proliferation of smartphones throughout global societies, a familiarity with mobile applications among “non-technical” consumers, and an inescapable presence of marketing campaigns will likely continue to create a level of consumer acceptance, even among the Skeptic/Laggards adoption group.

The primary question that remains with respect to adoption groups is, “Can we truly think about all augmented reality applications as operating along a single adoption life cycle?” After all, the disruptiveness of the various current (and future) applications spans a broad spectrum.

V. Marketing AR

Actions to influence decisions

Everett Rogers identified five factors that significantly influence the rate of adoption of any given innovation. When evaluating technology adoption, a particular consumer’s perception of each of these five factors represents a relevant basis for marketing decisions (Rogers, 2003). Before applying this framework, however, we must be clear in our definition of the ‘adopting consumer.’ The following analysis is based on the perspective of the end consumer who would ultimately use an AR application in his everyday life, as opposed to a company that would purchase AR technology in order to integrate it into its products or services for its end customer.

Relative Advantage: AR must be judged against that which it aims to replace. In most cases, AR replaces the act of manually retrieving information regarding one’s immediate surroundings. A mechanic, tourist, or commuter would likely perceive a direct feed of information relative to the respective job, historical monument, or intersection he faces as advantageous to the

15 alternative means of retrieving the same information from a physical, static source such as

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alternative means of retrieving the same information from a physical, static source such as an instruction manual, guide book, or map.

Compatibility: AR faces some significant challenges in terms of this property. Many AR applications require that the user alter his typical behavior or use a particular device to which he is not accustomed. For instance, readers of Esquire Magazine are not used to depending on a computer and web cam in order to get the full experience of their favorite periodical. On the other hand, users are becoming more and more dependent on their cellular phones as a resource for real-time information. Companies can leverage this by making the use of AR as simple as snapping a photo.

Complexity: AR is a technology that operates through a system of interacting components, which can potentially be perceived by the average consumer as either extremely complex or completely straightforward, depending on the manner in which the application is packaged. If an application requires a user to wear a space-age apparatus complete with GPS antennae, a laptop backpack, and heavy goggles, then adoption of that application will be slow, if not impossible. Conversely, if anyone from eight to eighty years old can effortlessly activate the AR Lego kiosk, then rapid adoption is more likely.

Trialability: Certain AR applications are extremely easy to try out. In the case of Esquire Magazine, the only required materials are the magazine, a computer with a web cam, and an internet connection. If one wanted to try out the newest AR iPhone apps, he could theoretically go to the nearest Apple store or Best Buy and “test drive” multiple applications. Owners of compatible smartphones can download the Yelp app for free.

Observability: Aside from direct use of an application, it is relatively difficult for one to observe any tangible results of AR technologies. Additionally, there are few (if any) applications currently in use today that would affect someone in a way that would inspire them to go out and tell all of their friends. If and when the medical field’s use of AR directly results in lives

16 saved (or when another, equally impactful application is introduced), a compelling level of observability

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saved (or when another, equally impactful application is introduced), a compelling level of observability may be reached.

VI. The Future of AR

Trend or Revolution?

Augmented Reality is, by all definitions, one of the most noticeable “buzz words” of 2009. In my research for this project, I set up a twitter search for “augmented reality” and found an overwhelming and constant stream of comments and links to articles, blogs, and images. Virtually every major business publication has covered AR in some respect over the last year. Business models are being developed around AR technology at an astounding rate. With that said, the question remains: Will this be the “next big thing,” or will we look at AR a year from now as “just another fad?”

The Experts Weigh In

Notable quotations:

Gartner research firm has placed AR on its “hype circle” for emerging technologies and reports that it is traveling toward its “peak of inflated expectations” (MANJOO, 2009).

Martin Agency's chief digital officer: "It's the flavor of the day…every client had to have a Facebook app, then a viral ad, then it was an iPhone app, and now it's augmented reality" (MANJOO, 2009).

Layar cofounder Maarten Lens-FitzGerald: "AR is going to be huge…[possibly] as big as the Web" (MANJOO, 2009).

Vernor Vinge, author of the novel Rainbow’s End describes, “A vibrant, realistic world completely dominated by AR. The characters wear contact lenses adding text and graphics to everything they see” (Duff, 2009).

BusinessWeek: “Augmented could live up to its meaning: something that adds to what we have” (Wildstrom, 2009).

Greg Davis, North American general manager of Total Immersion: "There have been game- changing events [with] consumer access to AR on PCs and mobile phones" (MANJOO, 2009).

17 • Christine Perey, principal at Perey Research & Consulting: “By 2012 there will be

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Christine Perey, principal at Perey Research & Consulting: “By 2012 there will be 150 to 200 million [mobile AR] users… about 3% of the world's mobile-user base” (King, 2009).

IMHO (or, for the Skeptic/Laggard: In My Humble Opinion)

From the perspective of a self-proclaimed (or aspiring) Innovator/Techie, I believe that AR will eventually achieve widespread use among every “segment” of adopters.

The primary support for my prediction stems from its ever-increasing presence in marketing strategies and the area of consumer goods. As more and more “ordinary folks” recognize the technology within familiar environments and come to appreciate it for its novel attributes, they will begin to imagine other potential uses and seek out more “useful” applications.

Second, I am confident that the ubiquitous nature of smartphones and other personal portable devices will play a vital role in the introduction of AR into mainstream culture. Everyone from the grade-school student to the senior citizen carries a cellular phone these days – a trend that is not likely to slow. Furthermore, devices are becoming increasingly sophisticated, making AR- capable platforms commonplace in the average American pocket. If the applications are inexpensive, easy to use, and provide value to the consumer, there is nothing preventing a level of rapid adoption.

Lastly, after observing the utility that can now be gained and the potential for life-changing developments through the use of AR, I am convinced that the demand for applications will continue to rise. As economists teach us, where there is demand, there is supply – and where those two meet, there is a market. Ultimately, only time will reveal the magnitude of influence from this currently uncertain technology.

18 VII. Works Cited (2009, January 24). Retrieved November 2009, from ubergizmo.com:

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VII. Works Cited

(2009, January 24). Retrieved November 2009, from ubergizmo.com:

http://www.ubergizmo.com/15/archives/2009/01/lego_digital_box_kiosk_uses_augmented_reality_in_

retail_stores.html

Azuma, R. T. (1997). A Survey of Augmented Reality. Malibu: Hughes Research Laboratories.

Duff, M. (2009, November 13). Augmented Reality may be next big thing, but it's still science fiction. Lubbock Avalanche-Journal .

Feiner, S. K. (2002, April). Augmented Reailty: A New Way of Seeing. Scientific American , pp. 48-55.

King, R. (2009, November 4). BusinessWeek.com. Retrieved November 2009, from MSNBC.com:

http://www.msnbc.msn.com/id/33603482/ns/business-businessweekcom/

MANJOO, F. (2009, November). Augmented Reality Is Both a Fad and the Future -- Here's Why. Fast Company .

Mark A. Livingston, L. J. (2002). AN AUGMENTED REALITY SYSTEM FOR MILITARY OPERATIONS IN URBAN TERRAIN. Proceedings of the Interservice / Industry Training, Simulation, & Education Conference (I/ITSEC '02). Orlando, FL.

Marshall, M. (2009, October 28). Retrieved November 2009, from VentureBeat.com:

http://venturebeat.com/2009/10/28/augmented-reality-company-layar-gets-1m-boost-launches-on-

symbian/

Moore, G. (2002). Crossing the Chasm.

PR.com . (2009, November 18). Press Release Distribution. Retrieved Novmber 2009, from PR.com:

http://pdf.pr.com/press-release/pr-193907.pdf

Presselite. (n.d.). FireFighter 360. Retrieved November 2009, from http://www.firefighter360.com/

Rogers, E. M. (2003). Diffusion of Innovations, 5th Edition.

Rosen-Amy, S. (2009, October 28). Sunlight Labs Unveils Recovery Act Augmented Reality Mashup App. Retrieved November 2009, from OMBwatch.org: http://www.ombwatch.org/node/10518

S Pavlopoulos, S. D. (1997). An augmented reality system for health care provision via telematics support. Studies in health technology and informatics .

Sviokla, J. (2009, October 29). Harvard Business Publishing. Retrieved November 2009, from Harvard Business Voices:

http://blogs.harvardbusiness.org/sviokla/2009/10/how_will_augmented_reality_aff.html

19 Tobi Blog . (2009, November 16). Retrieved November 2009, from Tobi, 1-to-1 Shopping:

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Tobi Blog. (2009, November 16). Retrieved November 2009, from Tobi, 1-to-1 Shopping:

http://www.tobi.com/editorial/tobi-blog

Various. (2009, November 21). Augmented Reality. Retrieved from Wikipedia:

http://en.wikipedia.org/wiki/Augmented_Reality#Definition

Venkatraman, V. (2009, November 12). Contact lenses to get built-in virtual graphics. Retrieved November 2009, from NewScientist.com: http://www.newscientist.com/article/dn18146-contact- lenses-to-get-builtin-virtual-graphics.html

Wildstrom, S. H. (2009, November 17). Augmented Reality: Not That Real Yet. Retrieved November 2009, from BusinessWeek.com:

http://www.businessweek.com/magazine/content/09_48/b4157075333212.htm