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STATE OF
STATE OF PHYGITAL

PHYGITAL
WWW.LETA.VC/PHYGITAL

2021 2021
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Foreword
Physical world around us today is very different from the one 50 years ago – all due to technology
innovation. It is hard to imagine how the world will look like in 10 years, though we can make educated
guesses based on the technologies that exist today and the trends where we see the tech is going.
Digital has become huge for each of us, but in most cases, population using the Internet in just over 10 years. What
it is still separated from the physical world. Digital is will happen then? The digital economy will start
tightly intertwined with the physical, you can hardly cannibalizing itself unless it expands offline.
imagine any physical object operating without a digital
component today. However, digital serves rather as an An average global internet user spends almost 6 hours
invisible hand, while we believe it should be vice versa – online each day (3.6 hours on mobile, 2 hours on
any physical object from parcel box to largest real estate desktop/laptop and 0.7 hours on other connected
shall be constructed and utilized in accordance with the devices)[3]. Given that on average a person sleeps for 8
digital use-cases that can be applied to these physical hours a day, we have up to 10 more hours as an upside to
objects. be captured and utilized by Phygital.
STATE OF PHYGITAL

Despite its rapid growth in recent decades, the digital We see Phygital as the philosophy of a new world order,
economy still accounts for less than 6% of the total where Phygital essentially enables the close integration
economy,[1] while offline dominates heavily. However, of the virtual environment (digital) into real human life
(physical).
with the rise of digital natives we estimate digital will
reach at least 50% of the world GDP within the next 15- Phygital is an innovation that creates an industry and
25 years — that’s a whopping $100-200 trillion upside. subsequent new technologies, making it an especially
On the other hand, we can see that the digital economy is important category. Some innovations are more transient
under a huge threat itself as it will very shortly reach its and come and go very quickly, but the ones that really
full capacity in terms of user penetration worldwide. As matter are the ones that generate whole new industries.
of Apr 2021, 4.8 billion people around the world use the In this report, we will cover all things Phygital, paying
internet (60%+ of population), with 330 million new users special attention to the modern technology enablers such
added over the past 12 months[2] (that’s 990,000 new as Augmented Reality (AR), as well as showcasing the
users each day!). In the UK 95% of population already use numerous use-cases of Phygital, some of which are
Internet,[3] 93% in South Korea, 90% in Germany and already deployed, while others will soon be possible due
Netherlands, 86% in France, 78% in North America. If this to innovation in hardware, electronics and software
2021 trend continues, we will have 100% of the world development.
Photo by Masaru Suzuki
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The digital economy

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will start cannibalizing

itself unless it expands
offline.
State of Phygital 2021
2021
leta.vc/phygital
Photo by Raychel Sanner
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Table of Contents
Foreword
6. Factors That Facilitate The Paradigm Shift
7. Technological Revolutions: From Agricultural To Phygital
9. The World Economy Is Sick, Phygital Is The Vaccine
10. World’s Largest Economic Sectors Status Quo
12. Technological Breakthroughs 1970 – 2021
14. Internet In Its Today’s Form Harms And Spoils Masses
15. What Is (actually) Phygital?
17. Impact of Phygital on World’s Largest Economic Sectors
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19. Phygital Use Cases

36. AR/VR Patents Outlook
37. Augmented Reality Penetration 2021
38. Technologies that form the basis of Phygital
39. Phygital Hardware & Software Challenges
40. Phygital Market Predictions 2021-2022
About Authors
Disclaimer
Definitions
References
2021
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We see Phygital as the

philosophy of a new world
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order, where Phygital

essentially enables the
close integration of the
virtual environment
(digital) into real human
2021
life (physical). State of Phygital 2021
Photo by Rita Chou
leta.vc/phygital
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Factors That Facilitate The Paradigm Shift

We are living in extremely exciting
times. Due to a combination of various Today’s technological and macroeconomic factors that lead to the paradigm shift
critical factors that emerged in a single
moment in time, we experience an
unprecedented level of technological
progress as never seen before.
At the same time, due to the influx of
information, most people confuse wide-spread Internet accelerated globalization and rapidly decreasing R&D resources and
popularity and penetration network costs to manufacture budgets consolidated
basic improvements and pseudo- access to high- bandwidth
streamline of
worldwide supply electronic components within largest
innovation with fundamental quality engineering corporations and
chain and logistics
paradigm shifts, missing the broader education worldwide countries
picture of where we as humanity
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stand in terms of stages of

technological development and what
will be next.
While it is widely accepted that we are
currently in a period of the “Third
Industrial Revolution”, or sometimes innovation in computer & software Intensified increasing demand increased need for raising purchasing
called “Information Revolution”, which electronics hardware development competition and for tools & means of remote power of population
started in 1975 with the shift from (microprocessors, advances fight for market technologies that communication and tolerance to
analogue to digital electronics, we semiconductors, quantum share and boost productivity, and collaboration adoption of new
computing, optics, storage, consumer dollars satisfaction and well- technologies
believe that we have already mobile & wearable devices, etc) being
surpassed this stage and are standing
on the verge of the next one, which is
Phygital.

2021
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Technological Revolutions: Phygital

From Agricultural Information

To Phygital Automobile
Science

Heavy
engineering

Steam engine

Industrial
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Agricultural

1650 1780 1810 1875 1900 1940 1975 2021

2021
Photo by Cosmin Serban on Unsplash

2021 Photo by Mihály Köles Photo by Museums Victoria Photo by Sherry Chen Photo by Ant Rozetsky Source of photo Photo by National Cancer Institute Photo by Markus Spiske Eon Reality
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Phygital is an
innovation that
creates an industry
and subsequent
new technologies,
making it an
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especially
important
category.
2021 State of Phygital 2021
leta.vc/phygital Photo by Steve Halama
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The World Economy Is Sick,

Phygital Is The Vaccine
5,57% Average Annual World GDP Growth Given the amount of technological
breakthroughs in the recent decades
4,03% from IT and biology to
manufacturing and science, which
3,03% 2,86% are considerably improving the way
2,63% 2,81%
we work and live, how come we see
the world GDP (one of the major
indicators of the world’s wellbeing)
has been plateauing in the past 4
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decades?[4] (as seen on the graph on

1960s 1970s 1980s 1990s 2000s 2010s the left).

Same goes for GDP Per Capita — the

growth has slowed down in the past
11,87% Average Annual GDP Per Capita Growth decades,[5] which is quite surprising
seeing great developments in almost
all aspects of our daily lives.
5,80%
5,55% 5,83% In order to find answers to the
questions above, let’s briefly analyze
3,46%
2,11% 2 things: what are the largest
economic sectors that contribute the
most to the growth (or decline) of
the world GDP and what is their
1960s 1970s 1980s 1990s 2000s 2010s current respective state?
2021
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World’s Largest Economic Sectors Status Quo

Financial Services. Between 2.5 and 3 Commercial Real Estate. If construction Life and Health Insurance. The World Oil and Gas. With the current speed of
billion adults transact exclusively in cash, of productivity were to catch up with the total Health Organization estimates a projected global natural gas & oil consumption the gas
which 1.7 billion remain completely economy, the industry’s value added could shortfall of 18 million health workers by reserves will last for the next 50 to 55 years
unbanked without an account at a financial rise by $1.6 trillion a year. That would meet 2030[12], mainly in low-income countries, and oil reserves will last for 40 to 45 more
institution or through a mobile money about half of the world’s annual where the majority of population resides in years according to the Energy Information
provider[6]; between 500 million and 1 infrastructure needs or boost global GDP by densely populated areas, which might Administration (EIA).[17] The market is likely
billion people rely exclusively on retail agent 2% according to McKinsey[9]. In comparison, become hotbeds for new deadly diseases to continue decreasing due to the growing
network instead of established financial productivity in manufacturing, retail and and epidemics. All due to inadequate popularity of electric cars and solar energy.
institutions; prohibitive regulation; agriculture has grown by as much as healthcare spend in the past 5 decades,
Automobile Manufacturing. 14 million
proliferation of financial crime and fraud 1,500% since the 1950s, but productivity in which averaged 5% of total GDP spend in
people are employed in Europe in the
(according to PwC 50%+ of all companies construction has barely increased at all. The developed countries (same as for military
automotive industry, 8 million in the US, as
globally experience fraud annually, $42Bn is industry is extensively regulated, very spend, for example)[13]
well as 5 million in China.[18] At the same
the total fraud losses reported in 2020 dependent on public-sector demand, and
Information Technology. Information time, an industry’s current average cash
alone)[7]; existing financial architecture isn’t highly cyclical. Informality and corruption
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Technology (IT) has grown 2.5 times faster runway of the largest OEMs is less than 2
coping with fast transforming economy and distort the market.
than global GDP over the past 15 years.[14] months (meaning they have cash on hand
business models.
E-commerce. Do you think eCommerce is IT outpaced the value-add contributions of for less than 2 months of operating
Construction. In OECD countries (leading huge? It has become very important indeed, goods-producing industries to gross expenses), which is quite horrifying. Such a
38 developed countries) an average labor though it still accounts for only 20% from domestic output for the first time in 2018 working capital/liquidity deficit might result
productivity in construction has been total retail sales[10]. What are some of the and is now on track to overtake services- in a huge social & economic crisis given the
declining since 1987 for 1% annually top eCommerce challenges on top of severe producing industries which are still complexity and its interconnections to
(meaning less output for the same amount competition, low margins and dominant.[15] upstream (e.g. steel, chemicals, textiles) and
of work)[8]. In specific construction sectors monopolization of the industry? Logistics, downstream industries (e.g. repair, mobility
Food Industry. To give you the taste of how
the decline looks as follows: -1.2% in single- distribution and other offline-related services).
bad things have become in the food
family residential construction (RC), operations, as well as lack of visibility in the
industry, let us present you just one number Telecommunication. According to EY,
-1.3% in multiple-family RC, +0.7% in whole supply chain, which result in $1
as a means of characterizing the current telecom industry’s revenue between 2010
industrial building construction. As a result, trillion loss annually for the whole
state of food sector: 690 million — which is and 2020 was growing at a compound rate
global need for infrastructure and housing industry[11]. No matter how much you invest
the number of people around the world of just 0.4%, mainly due to OTT players
will be hard to meet. At the same time, the in digital experience and improve your
who don’t have enough to eat—and the (WhatsApp, Facebook, WeChat) luring
sector employs over 7% of the world’s mobile or Web app, when offline simply
2021 working population. can’t keep up with the increased volumes.
number continues to rise, according to traffic away from telcos.[19]
United Nations.[16]
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2.5x times
faster Information
Technology has
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been growing as
compared to the
global GDP in the
past 15 years.
2021 State of Phygital 2021
leta.vc/phygital Photo
Photo by
by Craig Cooper
Eleonora Albasi
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Technological Breakthroughs 1970-2021

To give you a taste of how far ahead IT has gone in a mere 30 years of its existence as compared to hundreds and even thousands of years
of existence of other industries, let’s look at the table below which showcases some of the technological breakthroughs in IT and
technology over the past 30-50 years. Also please bear in mind that NONE of the things below were existent a mere 60-70 years or so
ago other than in fiction books. Improvement over
1970s* 2021* 1970-2021**
Computing efficiency
Number of watts needed per million instructions per second (Watts per MIPS) 5W per MIPS 0.00001W per MIPS x 500,000

Processing power (Moore’s Law) 2,300 transistors on a 39.5 billion transistors

Speed and capability of computers increases every 2 years x 17.2M
microprocessor on a microprocessor
Computational capacity for supercomputers
Number of floating-point operations (FLOPS) carried out per second 124 billion (1993) 442,000 trillion x 3.6M

RAM capacity
Random-access memory (RAM) - Computer memory typically used to store working data and 1-bit 128 Gb x 1.024*10^12
machine code
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Flash memory
Non-volatile storage chip can keep stored data and information even when the power is off 256 Kb 8 Tb x 8×10^9

Generation of semiconductor manufacturing process

Minimum size and spacing for features on each layer of the chip 20,000 nm 5 nm x 4M

Cost of computers $95,000 for HP 3000

$1,000 x 610
Brand-new personal computer costs ($610,000 today)

Hard drive capacity 0.01 GB 20 TB x 2M

Where all files and folders are physically located

Digital camera resolution 10,000 pixels 80,000 megapixels x 8M

Camera that captures photographs in digital memory

Display resolution 160 × 200 pixels

30,720x17,280 pixels
x 16.6k
Number of horizontal and vertical pixels on a display screen (32K)

Internet speed 50 Kbps (1984) 178 terabits per second

x 3.2Bn
Rate at which information is transferred from one place on the internet to another 56 Kbps (WWW 1993) (Tbps) (178,000 Gbps)
2021
* Our World in Data, 2021 (https://ourworldindata.org/technological-progress)
** LETA Capital estimate
 Similar To What Penicillin And Insulin
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Did For Humanity Since 20th Century,

Phygital Will Treat Most Economic
Diseases of the 21st Century.
What have we learned from the aforementioned
stats on the previous slides? One thing is for sure:
the world economy is sick. Most of the legacy
economic sectors are completely stuck in the old
way of doing things.

But the world has radically transformed in the past

30 years with the arrival of the Internet and
computing.
STATE OF PHYGITAL

Legacy sectors in the way they were created and

managed for ages are not suited for the sweeping
progress of the IT sector, which is now the driving
force of the world economy. If not for Information
technology and innovation, we wouldn’t be able to
discover new opportunities as we do today.

At the same time, IT in its current form, can’t solve

most of the fundamental issues of the largest
economic sectors, having an inert placebo effect,
rather than a full therapeutic effect. Similar to how
Penicillin or Insulin drugs discovery in the 20th
century saved and improved lives of the whole
generations worldwide, Phygital is set to bring a
whole lot of new experience and innovation in the
2021 21st century and years to come.
Photo by Harry Cunningham
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Internet In Its Today’s Form

Harms And Spoils Masses
The current model of Internet proves to be more harmful for users in the long run, rather than beneficial. There is now whole generations of people
(Gen Z and beyond) who’ve been hooked on the online-only activities since the very early age, being cultivated by the major online platforms to spend
as much time being online as possible, which is not natural for any human being, thus resulting in physical and mental problems early on.

3X 30%
People all over the world experience
various health-related issues such as
depression, anxiety and sleep quality
and blame the Internet platforms for
aggravating the situation with the
adverse factors such as bullying, fear of
missing out, body image and more. Children who were cyberbullied are of 18-44 year-olds feel anxious if
STATE OF PHYGITAL

3x more likely to contemplate suicide they haven’t checked Facebook in

As a result, sadly enough, Internet in its compared to their peers.[23] the last 2 hours.[24]
existing form gradually transforms from

55% 6X
the most powerful facilitator to a killing
machine.

Phygital, on the other hand, thanks to

its combination of physical and digital,
has a much more organic and natural
effect on humans, providing seamless of cases where children blocked Fake news spreads six times faster
experience and being as powerful and aggressors, the perpetrators quickly than true news.[26]
convenient as a purely digital interface. found them again.[25]

2021
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What Is (actually) Phygital

Phygital? $200tn**

The term “Phygital” has been around for quite some time, though
it is perceived completely wrong and in a very unfairly narrow
sense.
In most cases “Phygital” is monopolized today by either
omnichannel marketing, retail strategy or online-to-offline
customer experience meanings. In fact, it is much more powerful
and relates to every human being on Earth, as well as every
corporation and the government.
So, what’s the big deal with Phygital? And why should anyone
Physical
care about it? $84tn* Digital
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The answer is plain and simple and is pictured on the right: you $9tn*
can think of Phygital as an evolution of everything that has been
AR / VR
developed in computing, AR, VR and is set to dramatically change
the way we live, work, communicate, travel, study, entertain and $34Bn*
much more.
As a result, all physical objects in the future will be Phygital, i.e.
powered by a set of breakthroughs (AR, IoT, M2M, etc.), while
online environments (Social media, eCommerce, etc.) that exist
today in the digital form only, will finally merge with physical
objects not just as an add-on, but rather as an integral part of it.
This will lead to a dramatic redistribution of wealth and assets,
primarily disrupting the offline world and acting as a gateway to
the offline economy for today’s digital enterprises.

2021
* Global Market Size in 2020, $US trillion
** Upside potential in the next 5-10 years, LETA Capital estimate, $US trillion
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Phygital is an evolution of
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everything that has been

developed in computing, AR, VR
and enables the close integration
of the virtual environment (digital)
into real human life (physical).
2021 State of Phygital 2021
leta.vc/phygital Photo by mkobr61
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Potential Impact of Phygital on World’s

Largest Economic Sectors
Similar to the effect of the digitalization on legacy sectors and systems, Phygital is poised to bring enormous boost in efficiency and productivity across all the
major economic sectors. Given that the essence of Phygital is the combination of multiple technologies, the upside is estimated to be disproportionately greater
as compared to the effect from the digitalization.

$30tr** $25tr
* Global Market Size 2021, US$ trillion
(Yahoo Finance, 2021 [21])

$20tr $21tr
** Upside potential for each market segment upon
implementation of Phygital, US$ trillion
(LETA Capital estimate based on OECD’s report

$18tr “Digitalisation and productivity: a story of

complementarities”, 2019 [22])

$10tr
$23tr * $15tr
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$13tr $7tr $6tr $8tr

$10tr
Construction
$9tr $2tr
Financial
services
Commercial Real
Estate
$8tr $5tr $5tr $5tr
Telecom
E-Commerce
Information
Oil & Gas $3tr
Insurance Technology
Automotive
Food

2021
 18
STATE OF PHYGITAL

Phygital revolution will lead to a

dramatic redistribution of wealth
and assets, primarily disrupting
the offline world and acting as a
gateway to the offline economy
2021
for today’s digital enterprises.
State of Phygital 2021
leta.vc/phygital Photo by Raychel Sanner
Photo by on Unsplash
Frederik Schönfeldt
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Phygital Use Cases

But what makes us so confident that the Phygital revolution is around the corner? It is the
numerous existing use-cases of AR and XR that we see taking place globally and the amount of
interest that AR & XR attract among both individual users and businesses.
It is hardly possible to predict today how huge AR specifically and Phygital in general will become
after dedicated mass market AR headsets will gain popularity.
Below you can find examples of companies that already implemented Phygital technologies into
their products or processes (Phygital Implementation slides), as well as examples of the
corresponding use cases across different sectors and some of the vendors that provide Phygital
services.
Please note, that the information below is for information purposes only and doesn’t constitute an
STATE OF PHYGITAL

offer or investment advice.

Among the companies which already implemented Phygital (AR, VR, XR and other complementing
technologies) are some of the largest and most well-known organizations globally.
In addition, you will find below a few live examples of AR that you can try out yourself (Phygital
Use Case slides). All you need to do is to scan QR code with the camera of your smartphone, go to
your mobile browser and then either point the camera at the picture on the slide (Marker) or point
the camera at any flat surface (SLAM). And Voila! You can see and experience the magic of AR
right from your mobile browser thanks to the technology of WebAR. For a better experience we
advice you to print out the Marker’s slides so that you could see AR in action from the horizontal
flat area.

2021
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Phygital Implementation: Construction

Clients Phygital Vendors
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Use Cases

• Safety training • Remote Maintenance

• L&D, training • Data overlay on sites
• Workplace manuals • Human errors reduction
• Real-Time Information • On Job Site Inspection
• Team Collaboration • AR for BIM
• Progress capture • Equipment Monitoring
• Digital twin • Clash & errors detection
• Project presentation • Utility infrastructure locates
• Project Planning • Modifying Projects

2021
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Phygital Use Case: Construction

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
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2. Point camera to the picture

3. Or click and watch here

2021
Powered by
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Phygital Implementation: Retail

Clients Phygital Vendors
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Use Cases
• Virtual fitting room • Collect information on consumers
• Visualize product catalogs • Object visualization at home
• View product information • Personalized product offering
• Warehouse space optimization • Omnichannel experience
• Combine B&M and eComm • Post-purchase consumption
• Enhance brand recognition • Try before you buy
• Gamification • Bring customers into the store
• Search for deals around you • AR advertising
• Educate customers about products • Product Configurator
• Encourage interaction with the brand • In-Store Navigation
2021
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Phygital Use Case: Retail

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
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2. Point camera to the picture

3. Or click and watch here

2021
Powered by
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Phygital Implementation: Healthcare

Clients Phygital Vendors
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Use Cases

• Dentistry • Remote guidance

• Training nurses • Physical therapy
• Medical imaging • Surgery virtualization
• Medical education • Patient rehabilitation
• MRI evaluation • Enhanced telemedicine
• Vein detection • Medical device maintenance
• Remote surgical expertise • Visualize medical data
• Pharma marketing • Navigation in hospitals
• Clinical researchers • Advanced diagnosis
• Virtual patient care • Collaboration between physicians
2021
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Phygital Use Case: Healthcare

SLAM scenes

1. Scan with your mobile camera to

see live AR effects
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2. Point camera to the floor or

your table

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Education

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the picture

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Fashion

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
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2. Point camera to the picture

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Travel

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the picture

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Gaming/Toys-to-life

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the picture

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Space

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the picture

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Space

Marker’s scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the picture

3. Or click and watch here

2021
Powered by
 32

Phygital Use Case: E-Commerce

SLAM scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the floor or

your table

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Food

SLAM scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the floor or

your table

3. Or click and watch here

2021
Powered by
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Phygital Use Case: Pipe Repairs

SLAM scenes

1. Scan with your mobile camera to

see live AR effects
STATE OF PHYGITAL

2. Point camera to the floor or

your table

3. Or click and watch here

2021
Powered by
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Augmented reality promises to

be as influential to our society
as the smart phone
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— Tim Cook, CEO of Apple

2021
Photo: https://www.christianheadlines.com
Quote: http://www.independent.co.uk
 36

AR/VR Patents Outlook

AR and VR patent applications per year worldwide* Leading global AR/VR patent owners
and amount of patents owned**
37 000
35 000
32 100

26 600
10,100 5,050 5,950
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18 700
4,600 3,100 1,900

13 600 14 300

10 200
8 600 2,300 3,300 2,000
6 500
5 400

1,400 1,100 2,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2021
* Aggregate from USPTO, CNIPA, KIPO, JPO, EPO, WIPO; 2021
** Statista (https://www.statista.com/statistics/963685/worldwide-augmented-virtual-reality-patent-top-owners/)
 37

Augmented Reality Penetration 2021

3.5 billion 1.3 billion 0.9 billion

total number of smartphones total number of ARkit devices total number of ARCore
globally* (iOS) devices (Android)
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3.1 billion 0.8 billion 0.5 billion

total number of devices total number of active AR
total number of Snap lenses
globally that support WebAR mobile consumers worldwide

2021
* https://artillry.co/intelligence/
 38

Technologies That Form The Basis Of Phygital

AR, XR accessories Augmented & Mixed Reality
to deepen the (headsets, lenses)
experience
Brain Computer
Interface, Whole brain
Machine Learning, emulation
Artificial intelligence,
Big Data
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Wearables, Beacons

Cyber Physical
Systems, Smart
IoT, Smart
Infrastructure
Sensors,
Robotics

Human-machine
interfaces, Digital 5G, 6GHz Wi-Fi
Twins
2021
 39

Phygital Hardware & Software Challenges

Transition from smartphone-first to AR glasses-first mobile computing.

Release of a mass-market end user device (near-eye display device, likely in the form of AR glasses) with the
appropriate characteristics: wide viewing angle cones (field of view), long-lasting battery life, proper panel resolution,
comfortable form factor, advanced imaging performance, brightness and resolution density among others.

The latter two tackle the issue of displaying AR objects in bright light or outdoor daylight, when the
picture in glasses does not provide a sufficient level of quality.
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Vergence-accommodation conflict (VAC): instead of a stereo sensation when viewing 3D objects in real life, AR
glasses use fixed display plane where different rendered contents for each eye is adopted, which leads to visual
fatigue and discomfort, sabotages stereo acuity, and distorts perceived depth.

Improving the quality of spatial tracking (SLAM) to ensure that 3D objects perfectly fit into any space in a very fast
and invisible for the end user manner.

Independence of tracking quality from lighting conditions, movements and external shaking: overall subjects
stability is not lost, there is no shaking of objects and their displacements.

Enhancement of device performance, which can be solved by transferring all processing to the cloud via 5G (now
processing mainly takes place on the edge device (smartphone), which causes restrictions in use.
2021
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Phygital Market Predictions 2021-2022

Facebook will have Apple releases a Apple releases a Release of a consumer
50,000 employees in visual search feature, feature of creating 3D AR device from major
its division working AR walking and other models from a single technology players
on AR & VR (from AR enhancements. photo among other AR (Facebook, Apple,
10,000 today) enhancements. Samsung)
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Many other companies WebAR becomes truly

Proliferation of 5G, More and more businesses
release mass-market AR mass-market, similar
which reaches 1 billion apply AR and Phygital to
glasses (DAQRI, ROCID, to what Wix did to
users by the end of their core offering, fast
Meta, EPSON, LENOVO, website development.
2022 democratization of the
VUZIX, GLASS,
technology.
RealWear, Unreal, etc.)

2021
 41

About Authors

LETA Capital Devar

LETA Capital is a venture capital firm investing in Devar is a Phygital company founded by Anna Belova
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Russian-speaking IT founders globally at late and Andrey Komissarov. It has been creating
Seed, Series A and early growth stages. augmented reality products and services for their
creation for more than 5 years. The company's main
LETA’s investments cover a wide range of mission is to bring the Internet into the real world.
software startups focused on international
As a tech company DEVAR uses its own Artificial
markets. Our portfolio spans 40 companies
Vision technology stack. Today the company's IP
including InDriver, Novakid, 365Scores, Buddy.ai portfolio includes more than 15 patents in the US,
among others. South Korea, Europe, China, India and Russia.
LETA Capital is founded by a serial IT Phygital products by DEVAR are translated into 25
entrepreneur Alexander Chachava. To learn languages and are sold in more than 40 countries. Its
about LETA Capital investment approach feel services and technologies are already used in 150
free to read our Manifesto. countries.
2021 For more visit https://en.leta.vc/. For more visit https://devar.org/.
Photo by Alex Glebov
 42

Disclaimer
This report provides general information for reference purposes only. Readers should not use this report as a replacement
for legal, tax, accounting, or consulting advice that is specific to the facts and circumstances of their business. We encourage
readers to consult with appropriate advisors before acting on any of the information contained in this report. The contents of
this report may not be reused, reprinted, or redistributed without the expressed written consent of Leta Capital and Devar.
The information on this document is provided for information purposes only. It does not constitute any offer,
recommendation or solicitation to any person to enter into any transaction or adopt any hedging, trading or investment
strategy, nor does it constitute any prediction of likely future movement in rates or prices or any representation that any
such future movements will not exceed those shown in any illustration. Users of this document should seek advice regarding
the appropriateness of investing in any securities, financial instruments or investment strategies referred to in this document
STATE OF PHYGITAL

and should understand that statements regarding future prospects may not be realized. Opinion, Projections and estimates
are subject to change without notice.
Neither Leta Capital nor Devar is an investment adviser, and is purporting to provide you with investment, legal or tax
advice. Neither Leta Capital nor Devar accepts any liability and can be liable for any loss or damage arising directly or
indirectly (including special, incidental or consequential loss or damage) from your use of this document, howsoever arising,
and including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or
inaccuracy with this document, its contents or associated services, or due to any unavailability of the document or any
thereof or due to any contents or associated services.

2021
 43

Definitions
Augmented Reality (AR) - interactive experience of a real-world environment that overlays digital content and information onto the
physical world by using the camera on a smartphone or Snapchat lenses. A system that incorporates three basic features: a
combination of real and virtual worlds, real-time interaction, and accurate 3D registration of virtual and real objects.
Extended Reality (XR) - umbrella term that covers all of the various technologies that enhance our senses, whether they’re providing
additional information about the actual world or creating totally unreal, simulated worlds for us to experience. It includes Virtual
Reality (VR), Augmented Reality (AR) and Mixed Reality (MR).
GDP (Gross domestic product) - a monetary measure of the market value of all the final goods and services produced in a specific
time period.
GDP Per Capita - measures the average income earned per person in a given area in a specified year.
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Mixed Reality (MR) - combines elements of both AR and VR, where real-world and digital objects interact. Example: Microsoft’s
HoloLens.
OECD (The Organisation for Economic Co-operation and Development) - an intergovernmental economic organisation with 38
member countries, founded in 1961 to stimulate economic progress and world trade.
Phygital – set of technologies which enables the close integration of the virtual environment (digital) into real human life (physical).
Virtual reality (VR) - implies a complete immersion experience that shuts out the physical world.
World Health Organization (WHO) - a specialized agency of the United Nations responsible for international public health.

2021
 44

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2021 Most icons and infographics are used from icons8, most photos are from unsplash