Apple might be losing its lead in augmented reality to China

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Augmented Reality version coming soon
An augmented reality version of this game could have web a huge win for Apple.
Graphic: Ed Hardy/Cult of Mac

While ARKit gave Apple an early lead when it comes to augmented reality apps, a highly respected analyst thinks a Chinese company has nearly caught up.

As evidence, KGI Securities analyst Ming-Chi Kuo points out that the AR version of enormously popular game Honour of Kings will land on iPhone and Oppo’s inexpensive Android phones at the same time.

Kuo regularly makes reliable predictions about Apple’s future plans. People in the know listen carefully to anything he says about the company.

The importance of augmented reality

Apple CEO Tim Cook talked up the importance of augmented reality, and Apple’s ARKit platform for building apps, last fall.

“I view AR as profound,” he said. “Not today, not the app you’ll see on the App Store today, but what it will be, what it can be, I think it’s profound. And I think Apple is in a really unique position to lead in this area.”

But that leadership is slipping, according to Kuo.

“Since the debut of the ARKit nearly a year ago, there has been no heavyweight AR application on iOS,” Kuo pointed out in a research note this morning. “Given that the AR version of Honour of Kings runs not only on the iPhone but also on Oppo’s smartphone, Apple’s first-mover advantage gap in AR has been significantly narrowed by Oppo.”

The non-AR version of Honour of Kings draws more than 200 million players. (In the U.S., it’s called Arena of Valor.)

If Apple truly enjoyed a lead over its rivals, the AR version would have been iPhone-only. But Oppo was able to make the game run on its devices, too.

Of course, everyone remembers the first hugely popular AR game, Pokémon Go. No one knows whether Honour of Kings/Arena of Valor will the next big one. Whatever it is, Apple’s loss of leadership in this area means it probably won’t be an iPhone exclusive.

Even worse, the KGI analyst also wrote that this is indicative of a larger Apple problem.

“In several cases we have seen Apple lagging in software versus hardware development, which bodes badly for its innovation strategy of software and hardware integration,” Kuo’s note said.