Monday, May 23, 2016

The 6 Top Virtual Reality Growth Opportunities

Photo credit: VR - Mobile World Congress 2016 via photopin (license)
As smartphone and tablet sales start to flatten out, and companies race to emerging markets to try to maintain their high growth rates, a new competitive battlefield is emerging that could provide high growth for the next decade. This new technology is Virtual Reality (VR).

Many technology commentators have declared 2016 as the year of VR technology. For the first time, real VR technology available to consumers is coming onto the market. While VR technology has existed for many years in theory, it has never been as reliable and available to consumers as it is now. In fact, Google was a leader in VR with the cardboard product released in 2014, which converted any Android smartphone into a VR device.

In 2016, more refined products are becoming available. Samsung's Gear VR is compatible with certain Samsung Galaxy phones. The Oculus Rift was also released, and so has HTC's Vive VR system. Each system has certain advantages, and while still expensive, they are easily within the reach of consumers who are used to paying high prices for high end smartphones and tablets.

Later in 2016 or 2017, Sony Playstation VR and Microsoft Hololens are scheduled to arrive. There are also a multitude of smaller players developing their own VR systems and competing for niche markets or on lower price points.

Now that VR technology has arrived and is becoming mainstream, what are the key growth opportunities that will drive the next cycle of technology advancement? I will discuss three related to software and content, and three related to hardware in the sections below.

Growth Opportunities Around VR technology:

1) Developer Ecosystems - Software & Apps

One of the critical aspects that will determine the success of these emerging VR platforms will be the software ecosystem that will develop around them. The availability of innovative applications that introduce a multitude of new uses for VR will make these systems popular. We already saw this in the case of the iOS and Android ecosystems. They achieved success in large part due to the developer communities they built up that provided an almost unlimited supply of apps. Creating a successful and vibrant developer ecosystem will be essential to the success of VR platforms.

At the same time, this presents a huge opportunity for developers. Those who enter this new market while it is still young, and grow with it as it expands rapidly in the coming years, will be well positioned to become market leaders. The opportunity is not only open for existing software and gaming companies who will no doubt jump into developing VR applications, but also to new entrants. Startups that can think of new and innovative VR experiences have the opportunity to ride the wave into a rapidly growing market.

2) Gaming, Entertainment, Communications & Social Networking

The growth potential for VR technology appears to be limitless, given the nearly unlimited use cases for such technology. The obvious and most immediate use of VR will be gaming, and this will by itself become a huge market. However, beyond games, VR systems can enhance all types of entertainment activities, such as watching videos or movies, listening to music, and social networking to connect with friends in innovative and new ways.

Companies are investing heavily in communication tools including text, audio and video messaging and communications platforms such as Facebook Messenger and WhatsApp. These tools are already being monetized through advertising and enabling companies to provide services and connect with customers directly through the messaging platforms. Automated "Bots" and virtual assistants are being developed that will be able to provide customer service and other personalized service and information to users.

Imagine the potential of VR to extend all of these technologies to the next level!

3) Professional, Business & Work Applications

In addition to entertainment and gaming, VR technology can also have a place in professional settings. VR can be used in employee training, simulation, video conferencing, telepresence, education, health care and many other applications. Augmented Reality (AR) solutions, which combine reality with additional information on a single display, can become an indispensable work tool enabling workers to complete tasks with an enhanced view of the world and with instructions visible directly in their line of sight. As companies develop software and hardware products to address all of these markets, there will be huge potential for growth in many industries for the most innovative products.

4) Hardware Platforms - Processing and Graphics

One of the reasons for the failure of VR implementations in the past was that hardware platforms were simply not powerful enough to support it. To provide a good user experience would require very specialized and expensive hardware, and even then, the graphics would be poor and unrealistic.

Over the past decade, smartphones have helped to drive mobile hardware technology and provided a huge market opportunity that encouraged hundreds of companies to invest and develop faster and better hardware for mobile devices. This includes more powerful processing, graphics, communications and display technology, all at increasingly attractive pricing, which have now enabled affordable VR systems to be built that can provide a very good user experience.

However, there is still room for a lot of improvement to make VR experiences more immersive and more realistic. This points to the need for continuing to improve these technologies, and as the market grows, more investment will lead to rapid advancements in this space.

5) Full Mobility, Wireless Technology & Batteries

VR systems available today either rely on a smartphone to provide the display and processing power, such as Google Cardboard and Samsung's Gear VR, or they need to be connected to an external computer to provide processing, such as the Oculus Rift and HTC Vive. VR graphics rendering is very complex and computationally intensive. With current technology, it is difficult to integrate the required processing power into the headset. Therefore, these systems require a wired connection to a laptop or PC, which limits the full potential of the systems. Once a product is developed that has integrated display, processing and sufficient battery to last a few hours, it will unlock the full potential of VR systems to become fully mobile and available for use in many applications.

The challenge will be to be able to provide high capacity lightweight batteries that can be integrated into the headset to power these integrated mobile VR systems long enough to provide a good experience. This is probably the best approach in the long term as mobile hardware platforms and battery technology continue to improve.

Another way to to enable a fully mobile and untethered VR system would be to enable wireless data transfer between the VR system and the external computer. HTC has publicly talked about this option but indicated that they have not found a wireless technology that can be reliable enough and provide the high data rate required to make it work. If a suitable wireless technology is developed, it would enable a much better user experience where users won't have to worry about wires, and would allow better "room-scale" VR experiences. At the same time, it would allow VR headsets with less processing power and smaller battery capacity, lowering cost and weight which would make them very competitive in the market.

6) Hardware Accessories

Beyond software and apps, VR systems lend themselves to being augmented with accessories. Some VR products already come with some accessories that enhance the VR experience, such as sensors to enable "room scale" VR, allowing users to physically move while experiencing the VR environment. Other accessories include hand controllers, wearable gloves, omnidirectional treadmills, and the only limit is the imagination of developers! An ecosystem of accessory developers and suppliers is already developing around VR systems, similar to the ecosystem of app and game developers.

What are your thoughts on VR technology?

Have you tried any of the VR systems I have mentioned, or others? What has your experience been like? Do you feel VR is really ground breaking technology, or is it just hype? And what is the wildest application of VR that you can envision? Please share your thoughts in the comments section below.

No comments:

Post a Comment