Cloud XR to Bring New Commercial Avenues to Mobile Industry through 5G

Among the biggest opportunities of the 5G era is XR, or extended reality – the spectrum of technologies incorporating virtual reality (VR), augmented reality (AR), and simulated reality. VR, in particular, has felt like the ‘technology of tomorrow’ for some time, but mainstream commercial adoption has been hampered by high entry barriers for consumers. These barriers will be overcome by a combination of 5G networks and a “Cloud X” network architecture that brings together smart devices, a broad network pipe and Cloud applications.

Users wishing to experience the full range of VR’s immersive possibilities have required expensive hardware, such as high-end gaming computers and a head-mounted display.  The global installed base of consumer VR headsets reached 31 million at the end of last year, and, as things stand, is forecast to reach around 68 million by the end of 2022.  This may appear healthy growth, but sales are plainly not at the level of mass market adoption.

This is, however, poised to change through the combination of 5G mobile networks and the Cloud. 5G brings its extraordinary capacity for speed and consistency; its wholly unprecedented data transfer speeds and ultra-low latency. XR use cases, in particular, VR, do not allow for lag – if there is sluggish graphical performance during use, the illusion is quickly broken and the immersive experience lost.

5G ensures this fluidity, and then the Cloud takes on the burden of processing and storage. The Cloud takes devices which previously would have required enormous computing power of their own – if they were to perform at the level required for demanding applications like XR – and makes them conduits to its own vast processing and storage capacity.  In short, it reduces the cost of the device, while making it an access point for far greater Cloud-based capabilities.

This means advanced computer use without the need for a tower unit, cutting edge gaming without the need for a console, and XR without the need for a rendering machine.  For deployment of these uses cases to scale, however, the focus cannot be on technological feasibility – the time in the lab has been well spent, but the technology is now available, and the industry must now step up efforts in exploring commercial routes to market.

This meeting of cutting edge technologies, and the business models to be built behind them, was the subject of the 5G Cloud XR Summit, a flagship event for the GSMA’s Future Networks programme at Mobile World Congress this year.  Sponsored by Huawei, the Summit convened experts from leading operators and their partners to assess the business possibilities from Cloud XR deployment. While there is work yet to be done, the consensus in the room was that the potential here for monetisation is genuinely extraordinary.

Huawei’s Cloud X service, for instance, opens a market of $410 billion to mobile network operators, by supporting them to explore new business models in the 5G era, and extend their commercial horizons into Cloud infrastructure and content aggregation. Work is under way for instance on the commercialisation of Cloud PCs, which users requiring exceptional computing power can rent for just one day, but which permanently retain that user’s settings and preferences.

Use of this kind allows savings not only on outlay for hardware, but in power consumption – as the computing is mostly taking place remotely – making it far more economical for the average consumer, and bringing these capabilities fully into the mass market. As Huawei’s President of Strategy Department Will Zhang put it, “this is a whole new way of personal computing.”

There are, Mr Zhang explained, broadly three commercial routes to making good on the promise of Cloud X.  At the basic level, operators can build a Cloud X platform, based on 5G connectivity, which guarantees a level of service for its customers. They can then build Infrastructure-as-a-Service and Platform-as-a-Service business models on top of the Cloud X infrastructure, to offer content providers a plug-and-play business model for connectivity. Operators can then build their own immersive content services on Cloud X, to directly tap into the new markets offered by these new capabilities.

While VR gaming understandably captures the imagination of many, there are applications of Cloud XR far beyond the recreational. As China Mobile’s Chief Scientist for Wireless Technologies Chih-Lin I pointed out, while there is heavy interest in and uptake of VR gaming, “the key element of success for 5G is in its use cases” – as a natural partner of 5G, and a major way in which it will yield returns on investment, Cloud XR must offer more than just diversion or it risks looking faddish. Thankfully, that diversity of application is already there, and a great deal more is being done to add further value.

Microsoft’s Nancy Li demonstrated through an intriguing presentation that there are applications for instance in areas as various as manufacturing and healthcare, where high-risk processes can be practiced virtually ahead of the real thing. “We’re using mixed reality to launch the new wave of digital transformation. This next generation is direct, two-handed manipulation – you don’t need to learn how to use it,” Nancy told delegates; “but our Cloud services really depend on the new 5G networks.”

Deutsche Telekom’s Martin Liboska brought the session’s attention to ways in which users will be able to interact with materials, ideas and each other in new ways through a convergence of existing borders between the real and the digital: “we are at the dawn of another major revolution of how people consume, create and share content – and its operators and their core assets who can overcome the barriers. 5G is laying the basis for intelligent connectivity.”

If all this sounds a bit like sci-fi, it shouldn’t – because ordinary people will soon no longer need to afford the technology that powers these use cases. “We’ll be bringing devices to people who have never used them before,” explained Ms Li; “we want to work with operators because, if we can render all the processing in the Cloud, we can make things like headsets much smaller – that’s definitely the direction we’re going in.” In fact, Huawei is already working on light and comfortable XR glasses, which it looks like will, very possibly, become in time the new form factor.

To turn all this budding potential into business realities, though – and to not just offer but bring these use cases to a mass market – the mobile industry and its partners must now deliver meaningful collaboration.  XR services are new to operators – the value chain is very different to traditional services such as voice, messaging and connectivity – and that naturally means no player is yet established. Cooperation is therefore to the benefit of all.

In particular, work is needed on a common service reference architecture, a common service platform and a common set of APIs. When these goals have been met, businesses offering XR services will be able to reach 100% of their customers independently of which network they subscribe to; and when XR arrives at that level of user-friendliness, the entire industry stands to enjoy considerable rewards.