'Weak Demand' for VR and AR Causing Concerns for Companies Investing in the Technology

[MacRumors]

Sales related to virtual reality and augmented reality products "have been weaker than expected," according to data collected by a number of market research firms and shared by DigiTimes.

A lack of content and expensive prices, specifically for VR headsets, are two factors said to be at the center of the weak demand for the technology as 2016 closes out. The results could potentially have a negative effect on companies investing in VR and AR technology development, including Apple.

The market watchers noted that Sony's PSVR, Google's Daydream View, HTC's Vive, Samsung Electronics' Gear VR, and the Oculus Rift all ended up with sales figures weaker than their initial expectations. Coming out of Black Friday and Cyber Monday last week, the research firm SuperData noted that VR headsets have been "the biggest loser" this holiday season.

Because of the slower-than-expected consumer adoption of each technology, companies rumored to be investing in VR and AR products are believed to be feeling "pressured" about such investments. Specifically, HTC was noted as "seeing decreasing share in the worldwide smartphone market" while waiting for its Vive headset to contribute profits.

Many research firms' numbers also have shown that VR product sales in 2016 have been weaker than expected due to lack of content and high product costs. VR/AR technologies also require more improvement in order to stimulate demand from both the consumer and enterprise sectors.

It will take more time before the VR/AR market may begin enjoying robust growth, and such a slower-than-expected development is putting pressure on firms that have invested resources into related development, such as HTC, which is seeing decreasing share in the worldwide smartphone market while its Vive has yet to start contributing profits. The year of 2017 could be a difficult one for HTC.

Although Apple's relation to such technology has leaned more towards an AR experience -- most recently suggesting a feature that would be integrated into the iOS camera app -- the company has been rumored to be developing a full-on VR headset as well. If included in pre-existing apps within iOS, an augmented reality experience by Apple would be less risky for it to undertake, but some rumors also point towards a separate product category coming down the line.

It's unclear when Apple's decade-long investment in VR/AR development might come to fruition in a consumer product, but some basic AR experiences have already proven popular on the company's devices, including this summer's gaming phenomenon Pokémon Go.

Article Link: 'Weak Demand' for VR and AR Causing Concerns for Companies Investing in the Technology

 

[OafTobark]

Ahem, Apple, are you listening?

 

[magicschoolbus]

no one wants to strap these things to their face...

 

[coolfactor]

Technology is moving faster than the human population can absorb it. There is a threshold.

 

[maflynn]

I think the technology is so new, people are unsure where it fits in. Both for consumer usage, but also in a business setting.

 

[daanodinot]

Demand is weak because the technology is nowhere near good enough to be successful. These things take time.

 

[Avieshek]

It's like 3D TVs, one needed special glasses. It's just called Headsets here and hence the expected case.

 

[spiderman0616]

Technology is moving faster than the human population can absorb it. There is a threshold.

I have Playstation VR, and it is absolutely fantastic. I have been using it almost every night for the last month, and it makes gaming so much more fun and immersive. However, I agree with your statement. There are a lot of people clamoring for tech to move faster faster faster, but I don't think the general population is ready. Smartphones, tablets, and laptops are still what people want, even if there's been a slowdown in how many of those items people are buying.

We are at the point where we can get all the information we need, create all the content we need to create, and do all the work we need to do on the devices we already have. People should remember that when they tear into Apple for not bombarding the market with brand new device categories every 6 months. The every day ordinary consumer has had enough for now.

I will stick to my guns on VR though--it is fantastic tech, even in its early stages. I really have enjoyed it so far.

 

[dannys1]

I didn't see that coming /s

 

[jayducharme]

no one wants to strap these things to their face...

I think this is the main problem. The gear is still to bulky and uncomfortable. When VR can be achieved with minimal or no headgear (certainly a huge challenge), then it will see wider adoption. Cook was right: AR is the way to go, since it can be adapted into a variety of technologies.

 

[mcdspncr]

I would love to get into VR but unfortunately Xbox doesn't support it yet. But more than that, given the large investment I'm concerned the functionality and application/game support isn't there yet. I'm frequently a guinea pig for Apple products because I trust they will likely be good, but I'm a little bit more reluctant to become a guinea pig for expensive VR gear with limited game selections. If the major gaming consoles could launch true 4K VR w/ 120+ FPS for a semi affordable price and at least some backwards compatibility, I'm sure it would take off like wildfire

 

[Glassed Silver]

Demand is weak because the technology is nowhere near good enough to be successful. These things take time.

This.

I tried the Oculus Rift DK1 back at Gamescom 2013 I think it was and then recently their final product when an electronics store in my city had a truck over where you could walk in and experience a couple of products from various brands and the latest Rift, while greatly advanced, still is too pixelated for me to feel a lot of immersion. That or the public setting where a salesperson or two can't stop talking about the product and how you feel.

These things are marketed poorly and whilst I'd still consider getting one next year they have to come down in price big time, for ****s sake, sell them at a loss to get folks on board and a critical mass joining your online store fronts for games.

Might take a lot of capital, but last I checked Oculus is backed by a filthy rich company.... *cough*

Oh and I think there's still too few games for it... Basically, unless you like racing/driving games in general or unrealistic games of some kind, there doesn't seem to be too much in store for you.

Also, if you wear glasses, these things are no fun... Yes, they are made to "fit" with glasses, but they are annoying to wear in combination. Give them proper adjustable optics like binoculars.

Might raise the price and it might not be as simple as binoculars, but I have a hard time imagining people will enjoy these to the point of "let me buy the successor on launch day" if the user experience and value proposition stays the same.

I think this is the main problem. The gear is still to bulky and uncomfortable. When VR can be achieved with minimal or no headgear (certainly a huge challenge), then it will see wider adoption. Cook was right: AR is the way to go, since it can be adapted into a variety of technologies.

I think that both technologies shouldn't even be compared against each other.

One technology is literally about escaping reality and entering another [fantasy] world whilst the other is designed to let you focus or extend your experience of the real world.

They are completely different. His statement is probably still true, but not because either technology "wins" over the other like one car outsells another car, but more like how one car will outsell a particular boat.

Little overlap.

Glassed Silver:mac

 

[dynamojoe]

I'd like to see Apple release a kit but that might interfere with their love-fest with Facebook (owners of Oculus). Apple doesn't want to mess with that relationship right now, especially considering their own failed attempts at social anything.

 

[MacDevil7334]

no one wants to strap these things to their face...

This. Aside from video gaming (not something I'm really into), I haven't heard of any way VR might add something meaningful to my life. And any benefit it offered would have to be pretty spectacular to make me want to strap one of those ridiculous headsets to my face.

 

[rp2011]

I have no doubt that AR and VR will be everyday products and a hit game or toy tittle will one day generate a company a lot of money. But for now it's not quite made consumer friendly.

I see a high end industrial software and hardware solution for professionals in different industries but i also see this tech commodified ala last years "hover boards"

As long as Apple can incorporate and support that hit game tittle on their existing devices one day like Apple TV or iPhone, then it's all good. But a stand alone thing = big loses.

 

[Mr. Dee]

AR & VR are just capitalism creating solutions looking for a problem. Its where Steve Jobs is missing significantly. The guy just had a knack for creating things we wondered how we ever lived without them. Pioneering the graphical user interface - it was just ridiculous to think we could really type in archaic commands for the rest of our lives. If Steve did not start that fire, Bill Gates would be pushing MS-DOS 16.0 on us right now.

He pushed the need to make computers look good for a change, its not about dull, beige boxes sitting in a corner. The iMac really inspired the industry to take aesthetics seriously and create computers that didn't just focus on beauty, but functionality too.

Honestly, could you imagine carrying around 60 CDs with you in 2016? The iPod was just a logical means of carrying and easily accessing your music wherever, whenever you wanted.

Look at smartphones pre-2007; they were the hottest things, yet I never desired to own one. When Jobs demoed the iPhone in 2007, it was a eureka moment, you immediately knew this is what you wanted in a phone for a change.

The MacBook Air was a revision of what an everyday notebook computer for the masses was all about. Initially an expensive luxury for a few, it would eventually come down in cost due to efficiency in manufacturing and economies of scale. Which computer do you think is the most popular among Mac users today? Its the MacBook Air of course. Certainly, no one would predict that in 2008.

Steve Jobs rightly saw that, not everyone honestly needs the full power and complexity of a MacBook Pro, Air or MacBook. Hence the iPad, because we all have that friend or family member who simply just wants to check email, browse the web, use social media, basically just consume content. An obvious market was there all along and it was tapped into.

The iPhone 4 was really about making a better smartphone: Retina display, FaceTime, A4 performance etc.

The Retina MacBook Pro which was probably in the pipeline focused on what we are we doing with computers and what are we planning to do with them 5 years from now. When was the last time you really used an optical drive. If you are a creative/professional user, what do you want out of staring at your screen all day. So, there was obviously a market.

The iPhone 6 Plus was really about tapping into market demand, responding to the competition and this was obviously a smart strategic move. We don't know if the iPhone 6 designs and the iPad Mini were ever blessed by Steve Jobs, but they did find a niche.

When we arrive at present day, we see more solutions looking for problems. We now have a glorified notification wrist band. The rest of the industry is gung ho on stuff that honestly has no mass market appeal. AR/VR are not a recent holy grail, this is something the industry has been tackling for ages.

I am sure Steve Jobs had access to it before anyone. If he saw a potential for mass market appeal, he would have already designed a vision for where it would make sense when the technology was ready. He didn't and he didn't tackle everything, like the TV and smart watch, home automation or vehicles. He was narrow in his focus. Not denying he experimented with the ideas, but that's not different from keeping x86 versions of OS X in development for 5 years without anyone outside of Apple knowing.

I don't know what Jobs would have done today (I wish he had done the surgery from early then we would have found out). Its just, we are going through a period of doldrums right now. I sense, if we were to know the real truth, everybody: Microsoft, Facebook, Apple and Google are all panicking. They are throwing everything at the wall hoping it sticks but the reality is, we are back to the days of 1985 to 1996. The industry is truly rudderless.

One of the obvious things you learn from Steve Jobs and Silicon Valley is that engineers are at their core tasteless and talentless. Jobs pragmatism and lack of ability to write code balanced things out, not to mention the vision and logical common sense. This gave Jobs the ability to see both sides of the coin and to really use it to put both sides under manners, the engineers and the consumers. This is something the industry lacks right now. As much as Jony Ive might have been Jobs soulmate at Apple, he is consumed too much by design and aesthetics and fails to balance it out with being practical.

 

[BryanJ]

I own the HTC Vive and it is truly a remarkable experience. I love demoing it to my friends and family that have never tried VR before. However, when I am not demoing I barely play it because there isn't much replayability to it. But if they can find cheaper hardware than VR would take off for sure. Also, many people that haven't tried VR may feel it's just a gimmick.

 

[BeefCake 15]

I'd like to see Apple release a kit but that might interfere with their love-fest with Facebook (owners of Oculus). Apple doesn't want to mess with that relationship right now, especially considering their own failed attempts at social anything.

Apple doesn't even want to acknowledge their subpar graphics cards for gaming on the mac, their lack of interest of pushing good games on ATV..why would we expect them to bring in anything worthy on VR/AR with the current leadership and direction?

 

[Sasparilla]

Google's daydream view will be one to watch over the next year (its only been out for less than a month and only runs on the Pixel at this point which, has only been out for a month or so), since it requires a new tech standard on Android to support it). It's $70 and after the latest Galaxy S and the rest of the Android high end supports it over the next year could sell very well - since its down in tech impulse pricing and much nicer than cardboard. But we'll have to wait till there are enough phones that can use it before saying its not selling.

Most other things are expensive without a compelling use case. Cheap without a compelling use case but novel experience might sell okay.

 

[soupcan]

The devices are expensive as crap, as are the computers required to run them. Then comes the fact that the only "games" available are really nothing more than tech demos, which completes the circle as to why people aren't interested.

 

[NT1440]

Until there is some actual utility to VR (I think AR in infinitely more interesting as it doesn't remove you from reality) it's going to be a niche. I know we have gamers who just know that this is the next big for the next 5 years, but even the advertising for this stuff misses the mark.

Seriously, anyone see the VR commercials that always show a bunch of kids sitting around, passing a helmet for what is clearly a "gee whiz" 5 minute adventure in a park or something, that doesn't add up. VR is exclusionary, solitary (physically), and can't be marketed as a "pass this party favor around". It's an extreme niche, and perhaps will take off in the gaming field that operates on being physically solitary (even when playing with friends virtually), but the notion that you'll share this with grandpa more than a one time thing at christmas is ludicrous.

AR has massive potential because it's the natural extension of smartphone, that is adding the relevant information to your personal life, not removing you from it.

 

[rizzo41999]

I thought AR is "profound?"

 

[Ishayu]

I was at DreamHack Winter 2016 trying the HTC VIVE along with some pedals playing a racing game in a booth set up by Intel, and it was really, really bad. It's perfectly understandable this doesn't sell - it's not fun.

The display latency was nauseating, the resolution was terrible at 960x1200 per eye, and that's while you're sitting in a race car with your face close to the ground. The road was literally 4-5 pixels tall.

I don't know why anyone would invest in this garbage. I'm certainly not paying 7200kr for the headset alone, plus 5000kr for the pedals, and of course good money for the rendering equipment, too. Not in a million years. The resolution needs to go WAY up first and the latency needs to come down, and we need much, MUCH better motion tracking. It was downright sickening.

 

[2457282]

I have never been a fan of VR, but think that AR will have a place in our lives. AR in the car seems like a good use case - provides heads up display to the driver, can also provide POI information to passengers in a non intrusive manner and without any bulky headgear. I think that we still need to miniaturize components before it can be incorporated into glasses without adding weight or bulkiness.

 

[gsmornot]

IF they want to sell more of these, get them into grocery stores. That is where most of my money goes.