Apple creating augmented reality ecosystem via M&A

The time has come for power tech companies to build augmented reality (AR) ecosystems. Augmented reality involves overlaying digital media and information on the real world. Think pointing a smartphone at a restaurant from a distance and automatically seeing its menu and Yelp ratings appear on your screen.

Google's Glass, much maligned but certain to re-surface with improved design, is a prominent instantiation of the technology,

Apple's recent M&A activity signals a ramp up of its own AR ecosystem.

Organizational ecosystems can be built using influence or using control, Taking an influence approach implies emphasizing partnership or minority investment arrangements, whereas control suggests acquisition or majority ownership.

When Apple built its original music ecosystem in the early 2000's, it influenced music labels to license content in order to build the iTunes platform. Now as Apple enhances its augmented reality capability, it is initially using control via M&A to build an AR ecosystem.

Consider three recent Apple acquisitions.

• In late 2013, Apple acquired PrimeSense, a developer of 3D machine vision technologies for digital devices for an estimated $360 million. PrimeSensor is a system on a chip and a 3D sensing device that can see, track, and react to user movements. The company had worked with Microsoft to develop its successful Kinect motion-sensing gaming/television technology.
• In April 2015, Apple acquired LinX Imaging for an estimated $20 million. LinX develops miniature cameras for use in tablets and smartphones. The company's cameras capture multiple images simultaneously using proprietary algorithms that can assess depth and create 3-D image maps. The acquisition continued Apple’s pattern of deals in Israel. (PrimeSense was also based in Israel.)
• Then last month, Apple acquired Metaio, which creates technology that blends real-world imagery and computer-generated elements into video presentations. Metaio's augmented reality technology has been used to develop virtual product showrooms by retailers as well as visual repair manuals for industrial equipment.

M&A ecosystem clusters signal a company's future movement. Apple is clearly intent on throwing its design expertise behind building cool AR products and experiences to show off in upcoming Developers Conferences.