The augmented and virtual reality (AR/VR) market continues to evolve rapidly, with major players like Meta, Apple, and Microsoft competing for market dominance while smaller innovators seek to carve out their niches. As a leading optical coating specialist, NACL offers some unique insights into this exciting landscape.
Biggest opportunities for OEMs and consumer devices
Domestic production partnerships
One of the biggest trends we’ve noticed lately is that more companies are bringing production of AR/VR components closer to home.
This is particularly notable among major tech companies, which are competing aggressively in the AR/VR space. Even fashion brands are entering the market through strategic partnerships.
The domestic development of production offers many advantages due to current international policy uncertainties. While it’s not clear if these challenges will be short-term or long-term, they’re already impacting production timelines for many products. Unless OEMs bring production domestic and establish reliable partnerships, they could risk falling behind their competitors.
The glass-to-plastic transition
Another major opportunity lies in the shift from glass to plastic components. Many lens manufacturers are transitioning from glass to plastic, significantly reducing both the weight of wearable devices and production costs. While plastic offers these advantages, it presents its own unique challenges.
These include managing different absorption properties, indexes of refraction, and developing low-temperature deposition processes, as plastics cannot withstand the high temperatures used in traditional glass coating methods. Companies that can innovate with plastics have a significant advantage in this space over those still heavily reliant on glass.
Inclusive design: a major growth opportunity
There’s a significant opportunity to design AR/VR devices for users with vision challenges. People with astigmatism or vertigo, for example, often struggle when using AR/VR devices, experiencing distorted vision and limited field of view that can lead to nausea and dizziness.
Companies developing solutions for these users – whether through prescription integration or designs that accommodate astigmatism and other vision conditions – could unlock substantial new markets.
Specific challenges facing the market
Supply chain and sourcing
Supply chain issues remain a persistent challenge in the AR/VR industry. In some countries, certain coatings can be produced more cost-effectively, requiring manufacturers to carefully weigh the tradeoffs between supply chain reliability and domestic precision coating capabilities.
Material sourcing can also present significant difficulties. A prime example is zeonex plastic, specifically the discontinuation of the zeonex E48R polymer substrate and the subsequent shift to K22R and K26R. This case demonstrates the critical importance of adaptable supply chain strategies. E48R was an exceptional polymer substrate for many different types of lenses, offering great clarity and ease of working and coating. While K22R and K26R aren’t necessarily flawed, some people find that they simply don’t match E48R’s performance.
Speed to market and R&D reliability
Meeting development timelines is critical in this competitive landscape. Without a reliable R&D partner, delays can result in missed deadlines and lost ground to competitors. Collaborative relationships with trusted partners are essential to successful R&D efforts. It is also crucial to take the time to consider the product-market fit, which can be elusive for many AR/VR initiatives.
This is particularly important given the long development cycles in AR/VR – many products on the market today began development five years ago.
How NACL helps overcome these challenges
Our approach to helping customers navigate these challenges is built on several key principles:
Partnership from day one
We engage extensively with our customers from the beginning. We don’t rush to quotes or production; instead, we focus on building relationships founded on trust and collaboration. This includes providing direct access to our engineering team, ensuring customers receive the optimal coating solution for their specific needs.
Specialist expertise in plastic coatings
NACL distinguishes itself through deep specialist expertise in plastic coatings—a rare capability in the industry. As the NACL team likes to say: “There are people that can coat plastic, and then there’s the company that coats plastic. That’s NACL.”
Strategic industry connections
Our customers become our vendors, and our vendors become our customers, creating a network that allows us to connect partners across the supply chain. This ecosystem facilitates solutions beyond our immediate capabilities.
Commitment to iterative R&D
We embrace collaborative R&D, working through often multiple iterations with our customers to solve problems and make meaningful differences. We take ownership of this process, driven by pride in our work and commitment to excellence.
Future technology trends
Looking ahead, we see 3D-printed optics emerging as a potentially disruptive technology. While 3D printing remains relatively slow, it offers distinct advantages in customizing CAD models and producing prototypes quickly. This could be particularly impactful for creating prescription lenses and designs addressing specific vision challenges such as astigmatism or vertigo.
The importance of relationships
Perhaps the most valuable insight for companies working in emerging technologies such as AR/VR (or any industry) is the importance of strong partnerships.
Find partners you genuinely want to work with. The value of building personal relationships with vendors and customers cannot be overstated. These connections make it significantly easier to address challenges collaboratively: “I’m having this issue, this isn’t working as expected. It’s within specifications, but it’s not delivering what I thought. Is there another solution we can explore?”
At NACL, we believe these relationships go beyond mere transactions – they form the foundation for successful innovation in any complex, emerging market.
Ready to innovate in the AR/VR space? Partner with NACL for expert optical coatings and cutting-edge solutions. Contact us today to learn more!