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The demo will blow your mind. My biggest takeaway was that AR probably has more potential in the long-term than VR. VR is immersive sure, but you quickly run into physical boundaries or your mind becomes out of sync with your body. AR has all the benefits of VR but layered on top of your physical environment, enriching it and providing a reference point.

To speculate, I'd say VR will find its killer app in gaming/entertainment (similar to TV), and AR will become the next great I/O interface between humans and computers (similar to phones/tablets).