Apple, Snap, PayPal, and Google are all jostling for position in virtual and augmented reality this week – while Facebook goes for mass-market appeal with Oculus Go. Chris Middleton reports.
Apple is reportedly working on a wireless headset capable of running both augmented and virtual reality applications.
Rumours of the ‘T288’ project come as Apple searches for the next big idea as its smartphone market share fades against Android, and Apple Watch sales – while healthy at eight million units last quarter – suggest that it remains a niche product, despite representing nearly half of all smart watch sales.
According to the report, Apple is developing an 8K display for each eye, in a headset that would be untethered from a computer or smartphone, and instead communicate wirelessly with a tower-style base station.
The system could be powered by Apple’s own silicon, as it leads the industry trend adopted by Facebook and others of consolidating chip design and production internally, to keep control over new product development and reduce reliance on companies such as Intel.
However, the Apple rumours come in the wake of Intel’s recent announcement that it is shutting up shop on its Vaunt AR glasses. The move appeared to signal the end of Intel’s foray into wearables and augmented reality, after spending hundreds of millions of dollars on research and acquisitions.
Whether or not the Apple report is true, CEO Tim Cook has previously talked up both AR and VR, with a focus on augmented applications. Conceivably, a well-designed, simple-to-use Apple product could do for the headset/glasses market what the iPhone did for smartphones.
Last June, Apple unveiled its ARKit to enable developers to make augmented reality apps for iPhones and iPads. It also said it was working with Valve to bring the Steam VR platform to its Mac range of desktops and laptops.
At present, the AR and VR hardware markets are diverse and complex, but devices have so far failed to capture users’ imaginations in the numbers that analysts have long been predicting – outside of the gaming world, at least, or in niche industrial deployments, where wearable technology is proving to be genuinely useful.
But for the general pubic, headsets and glasses have either been seen as too bulky and expensive (Oculus, et al), too faddy and limited (Snap Spectacles), or too intrusive in privacy terms (Google Glass). VR initiatives such as Google Cardboard have tried to overcome these barriers with ultra-low-cost solutions that focus on the user experience by turning phones into headsets, but have still failed to garner mass-market popular support.
Most devices are also tethered to a PC, phone, or games station – a problem solved by Facebook’s new standalone Oculus Go headset, launched this week. While it has received qualified praise for being an integrated, affordable piece of kit ($199), the new hardware has been criticised for still being too heavy and uncomfortable to wear, with limited motion tracking.
Being Facebook, the Go focuses on social collaboration apps and shared virtual experiences. But despite this, friction, discomfort, and limited practical appeal suggests that the Go will fail to be the breakthrough mass-market hit the industry needs.
To succeed in a world of low-friction mobile communication platforms, VR and AR devices need to be wearable, discreet, lightweight, and – above all – useful.
Nevertheless, consumers are expected to buy 22 million VR and AR headsets or glasses this year, according to a report from analyst firm CCS Insight. In 2022, the number could soar fivefold to 120 million units, it claimed.
Meanwhile, Google has announced the availability of the first standalone VR headset running Google Daydream, with the launch of the Lenovo Mirage Solo. The $400 headset can work independently or alongside the $300 Mirage camera, which is able to capture VR content.
Google’s Daydream VR library includes over 350 games and apps.
Snap crackles with pop solutions
To date, the most popular examples of AR and VR in action have been games or apps on users’ smartphones and tablets, such as Pokemon Go, or the Lenses and AR camera effects that are popular on Snapchat and other social platforms, including Facebook Messenger and Instagram.
But even in those markets, providers are experimenting with developing mass-market hardware – so far without producing an iPhone-sized hit.
Snap, the owner of Snapchat, is focusing much of its efforts on augmented reality. Last week, Snap launched version two of its Spectacles, which are an evolution of the first iteration, rather than a wholesale reinvention.
According to TechCrunch, only 0.08 percent of Snapchat’s users bought version one, and over 50 percent stopped using them a month after purchase. So version two has a lot to do to convince the market.
Hardware aside, AR makes strategic sense for Snap, which calls itself a “camera company”. This is because the majority of AR and VR market revenues are expected to come from areas where Snap already makes money: ecommerce, advertising, apps, games, and location-based spending. Its spectacles need to offer an access point to all of that – including the world beyond Snapchat.
Snap’s latest financial results reveal revenue growth of 54 percent.
Overall, AR-based advertising worldwide has seen 10 percent increases in sales with a 3.1x return on ad spending, according to research published by investor forum Seekingalpha.com. Snap already has an edge in these markets as 70 percent of its 187 million Snapchat users play with Lenses each month.
Last week, Snap launched Snappables on both Android and iOS, which are Lenses that let users play AR games and other interactive experiences with friends. The company has also added a ‘ShopNow’ feature to its Lenses, making it easier for advertisers to measure ROI on Snap products.
Meanwhile news has broken that PayPal has refreshed a 2016 patent for AR glasses that are designed for augmented reality shopping experiences.
The glasses could overlay product information, such as prices, payment options, and return policies, onto physical objects. It could also walk shoppers through the steps to purchase items online, according to the report.
The news should be seen in the context of other payment technology companies, such as MasterCard, partnering with retailers to enables frictionless shopping experiences, via in-store smartphone checkouts and other technologies, and the world’s biggest retailer, Walmart, patenting a range of other systems to make bricks-and-mortar retailing smarter and faster.
Plus: Google on TV
In related news, NBCUniversal announced this week that it is teaming up with Google to bring a range of complementary VR content to existing networks and TV shows.
The two companies will collaborate on “at least 10” multi-episode VR productions around shows like Saturday Night Live, Bravo’s Vanderpump Rules, and Syfy’s Wire. More will follow in the coming months, including projects developed in partnership with E Entertainment, NBC, Syfy, Telemundo, and the USA Network, according to the announcement.
The projects will be produced using Google’s Jump platform and be available on YouTube, and also via Google Cardboard or Daydream View.
• Additional reporting: Sooraj Shah.
Internet of Business says
Last year, MasterCard said that “every connected device will be a commerce device”. Apple, PayPal, and Snap seem to agree, which is why the mooted Apple launch, in particular, would make strategic sense.
Among the many reasons for the failure of version one of Snap’s Spectacles are that Snap publicised the hardware long before it was available; the glasses linked solely with the app, and not with users’ phones; prescription lenses were not officially included by Snap; there was little incentive for wearers to use the glasses; and little idea of what they could do or make with them if they did.
But as we’ve learned from the iPhone and other smartphones, tablets, and phablets – and from Amazon’s Alexa portfolio – the hardware takes second place to the apps, the mobility, the connectivity, the retail opportunities, the brand extensions, the customer loyalty, and the creative opportunities that it enables.
These are all things that Apple knows how to do. In short, Apple’s walled garden of well-designed, integrated hardware, apps, and retail platforms needs a new window for customers to look through, and new hardware to reignite sales and its loyal customers’ love for the company.
If anyone can push AR and VR out of their niches and into mass-market popularity, it’s Apple.
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