Internet related News · 2016-03-06

Virtual Reality to lead smartphone sales resurgence?

virtual reality

In early 2000s, the USP of a mobile phone was its compact size.  As Internet connectivity on mobiles became better, large screens became the selling point. Phones continued to have greater capacity, larger screens & bigger batteries. Smartphone makers continued to add more features in the ubiquitous mobile device; higher megapixel cameras, quad core processors, bigger RAM, metal unibodies & so on.

However, in the past 2 years, there seems to have been a plateau in these features. Smartphone makers are now looking for newer, out of the box propositions to sell their devices. 3 such solutions are modular devices, lifestyle devices (like smartwatches) & Virtual Reality (VR) headsets paired to the phones. Motorola, Samsung, LG have all experimented with smartwatches & VR headsets.

But smartphone makers are slowly but surely leaning towards VR reality to renew consumer appetite. According to a new market research report, the VR technology market was expected to reach US $15.8 bn by 2020.

“With a slowing smartphone market, 1 of the ways to generate additional profit is to become a major player in new categories like smartwatches, cameras or virtual reality goggles,” Agence France-Presse quoted Head of Mobile at research firm IHS, Ian Fogg as saying.

Right now, the mobile phone is the single most important device in VR. Technology giants have already entered the VR market with plans to unveil smartphones & smart devices, that will enhance the experience, expecting a surge in the global sales.

While Facebook acquired Oculus VR in March 2014, Sony was developing ‘Project Morpheus’. HTC & Valve Corporation, on the other hand, were jointly developing ‘HTC Vive’, a head mounted display. Microsoft, too, had revealed its ‘Microsoft HoloLens’ device that was likely to be made available in early 2016. Apart from these, many other companies were waiting for the right opportunity to enter the VR market.

According to a recent report by news agency Reuters:Weak global economic conditions are further clouding prospects for what is expected to be another tough year for the mobile industry. Researcher IHS tips the industry’s revenue to grow by just 1.1% this year to $373.1 billion, well below the expected 6.3% shipment growth.

At the recent Mobile World Congress in Barcelona, Spain, Samsung released its latest flagship smartphone, the new Galaxy S7. While many were unimpressed with slight additions to its already existing predecessor Galaxy S6, the company, however, sent a clear message on its seriousness about VR, calling it the “next platform”.

But the question still remains – will VR really shore up the otherwise falling smartphone sales in the long run?

In an incisive report quoted by Bloomberg, Deutsche Bank AG analysts led by Ross Sandler drew a parallel to early sales of smartphones by companies.

This group wrote in the 68-page report published last Thursday that according to them, the VR ecosystem was in its ‘2007-smartphone’ moment in terms of the adoption cycle. “It took 4 to 5 years for smartphones to reach 100 million users in the US, we expect a slower adoption curve for VR, but still strong enough for an enormous market.”

The report, however, also cautioned that there was a risk, that in the next 2 years, people may actually turn negative on the space due to a high rate of hardware sales without the accompanying Content needed. The analysts drew a parallel with the launch of Apple’s iPhone in 2007 & the extra time it took for popular apps from Snapchat, Facebook, or Uber Technologies to be launched & help build a user following.

“After all the hardware adoption in 2016 & into 2017, media outlets & analysts may start asking, “Well, where is the killer app?” & “Why are all these VR systems collecting dust?”

They hinted at a “fairly high probability” that the ‘Gap of Disappointment’ may be a theme for the Consumer Electronics Show & Mobile World Congress in 2017.

On a secondary note, remember when smartphone makers constantly offered higher megapixel cameras every few months in an effort to up sales? While smartphones makers signal to an upcoming era of VR, it seems that the megapixel war is finally over. According to experts, smartphone users have finally stopped caring about megapixels that companies keep adding to newer models.

“To some extent, you get to a point where more megapixels doesn’t produce better quality pictures,” Time magazine quoted Ryan Reith, an analyst at research firm IDC. However, it remains to be seen whether the VR temptation will keep the interest levels of the consumers piqued for long enough or will they just stop caring about it just as they did about the megapixels.

 

 

 

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