Over 13 million augmented reality (AR) apps built with Apple's (NASDAQ:AAPL) ARKit have been downloaded since its release with iOS 11 last September, according to app intelligence firm Sensor Tower. During those six months, 47% of ARKit-only app downloads were games, compared to 35% in the month after iOS 11's release.

"ARKit-only" apps exclude "ARKit-compatible" games like Niantic's Pokemon Go, which is possibly the most popular AR game in the world. Sensor Tower claims that the most popular free ARKit-only game is PlaySide Studios' virtual pet simulator AR Dragon, which lets users train a dragon in real-world surroundings.

PlaySide Studios' AR Dragon.

PlaySide Studios' AR Dragon. Image source: Playtime Studios.

Other popular apps include AR measuring tapes, AR children's books, AR furniture placement apps, and AR photo and video apps. Sensor Tower estimates that there are over 2,000 AR (both ARKit-only and ARKit-compatible) apps in Apple's App Store.

That's a tiny sliver of the 2.2 million apps which are available on iOS, but it marks progress for the fledgling industry. Let's take a closer look at ARKit, and how it could shape the future of the AR market.

What is ARKit?

ARKit is an API (application programming interface) that lets developers build AR apps by accessing an iOS device's camera, CPU, GPU, and motion sensors. Apple claims that ARKit, which only works on Apple A9 and higher processors, delivers "breakthrough performance that enables fast scene understanding" which lets developers "build detailed and compelling virtual content on top of real-world scenes."

ARKit works alongside several other frameworks and APIs. Apple's Core ML (machine learning) framework accelerates tasks that require artificial intelligence, like image recognition. Its Depth API, which senses the distance of objects, lets developers access the dual cameras in the iPhone 7 Plus, iPhone 8 Plus, and iPhone X.

A woman wearing an AR contact lens.

Image source: Getty Images.

Its Core NFC (near-field communication) framework gives developers limited access to the NFC chips in iPhones, which lets apps interact with nearby sensors. Apple's recent ARKit 1.5 update adds wall detection and improved computer vision. This means that ARKit apps will be able to "see" and place objects on walls.

Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google also recently launched a similar platform, called ARCore, for Pixel and Galaxy 8 devices running on Android 7.0 and above. ARCore replaces Google's older Tango AR platform, which it introduced three years ago. Yet there are only about 60 ARCore apps on Google Play -- which puts it behind Apple in the AR race.

A $134 billion market opportunity

The AR market might seem like a niche, but it could grow from $3.3 billion in 2015 to $133.8 billion in 2021, according to Zion Market Research. Zion expects that growth to be supported by AR apps for smartphone and tablets, new AR headsets, AR glasses and contact lenses, and customized AR devices for various industries.

Google and Microsoft (NASDAQ:MSFT) have already taken steps into this market. Google relaunched Google Glass for enterprise customers last year, while Microsoft is selling the developer's version of its mixed reality Hololens headset for $3,000.

Microsoft's HoloLens.

Microsoft's HoloLens. Image source: Microsoft.

Apple's moves are more subtle. It acquired several AR/VR firms, including Metaio, Faceshift, Emotient, Flyby Media, SensoMotoric Instruments, and headset maker Vrvana.

It filed patents that show an AR headset for the iPhone, assembled a secretive AR/VR team, and hired Virginia Tech professor Doug Bowman, one of the top VR experts in the country, to lead those efforts. It added new depth-sensing cameras and computer vision chips to its latest iPhones, and showcased some AR and face-tracking features with its Animoji feature for the iPhone X.

Some industry watchers think that Apple will eventually launch an AR headset for iPhones, since its patents show a headset that presumably turns an iPhone into a cheaper version of the HoloLens. However, Apple could still be trying to build an app ecosystem before it launches AR hardware for the masses.

A "big and profound" market

AR is still a tiny market, and it certainly won't move the needle for Apple anytime soon. But the growth of ARKit, especially in contrast with Google's lackluster start for ARCore, indicates that Apple has a bright future in this market -- which CEO Tim Cook called a "big and profound" one during a conference call last year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.