Virtual reality is here … well, sort of. I have two questions. As a user, is it worth buying products like the Samsung Gear VR today, and, as an investor, is it worth investing in today? Like the early smartphone market, while I believe VR will eventually hit the big time, it’s pace of growth has not reached fever pitch. Not yet anyway.
Virtual reality is now entering the early marketing stage. If successful, I think it could create another growth segment like smartphones and tablets. I would say it will be at least somewhat successful since a slice of the pie is interested at this early stage. The only question is how successful?
Example: smartphones like the iPhone and Android-based devices have the longest and strongest growth wave over the last eight years even though their growth rate is slowing. The younger tablet growth wave with devices like the iPad has been much shorter and shallower. So the question is where will virtual reality fall in comparison?
How successful will virtual reality be?
The success of VR depends on so many issues and there is no way to predict the size and timing. Much depends on how well the industry advertises, markets and creates interest in order to jump-start this new segment. We have not seen much of this yet. And what we have seen so far is not very impressive. Not yet anyway.
While visiting a shopping mall last week, I passed the Best Buy Mobile store. I always tend to stop in and check out whatever is new. This week there was a Best Buy worker standing out front with a pair of Samsung Gear VR goggles letting customers give them a try. So I did.
While the clerk knew more about these goggles than the average customer, the whole experience left me both impressed and uninterested. When you wear these VR goggles, you see a three dimensional image of a messy urban apartment with someone at a computer. As you turn around, you can see the entire apartment as if you were standing in the middle and turning in a circle.
Impressive, but you are stuck in that one position. As I moved around, the picture stayed stationary and in place. So while this is exciting to see, it is still just the early generation. As VR continues to mature and evolve, it will get better, expand and titillate all our senses.
So while this was a new experience and while it was cool, today, after that introduction, I was unimpressed … for now anyway. This still feels like the very early generation. Then again the first iPhone and Android were not that big a deal either and it ended up growing rapidly in coming years.
Early stages of virtual reality
We must remember that this is just the very early stages in the new virtual reality path. I expect VR to get better, more impressive and more usable as time goes by. But for now it still seems more of a promise than reality.
The travel industry could use VR to let us visit foreign countries without leaving the comfort and security of our comfy living room chair or to show us what each new city looks like. The adult industry is considering ways to let the user have experiences with actors and actresses of his or her choosing. Architects can show clients their ideas in almost real life before a brick is laid.
The real estate community is another example. Imagine having your agent visit you in your home and whipping out these VR goggles. You can see the inside of every home you are considering before you even leave your home. There are countless opportunities ahead.
Entertainment has a unique opportunity as well. VR could change the movie experience. Imagine, rather than sitting in a seat and watching what’s up front, you could turn around and see the entire movie set. This would be a great accomplishment, but the question is will customers really like this new world? Would they be bumping into each other? VR will change and expand the rules for movies and entertainment.
Music to investors ears
So the real question is will this new VR technology transform industry after industry, or just create another slice in the pie? We won’t have an answer to this question for years. However, growth will still be occurring in the development stages of this new technology. That’s music to investors ears.
Change does not always improve everything. Remember the Imax experience? That was supposed to change the movie experience forever. It didn’t. It did create a new slice of the movie pie. A slice that is still with us. However, Imax didn’t transform the movie industry.
Remember Segway? When it was introduced in 2001, it was going to transform the world. Promoters said everyone would want one and own one and drive them to work, the mall, the store and so on.
Instead, 15 years later, the Segway is not that big a deal. It only is popular in one slice of the pie. Sure we see them around, but they are not mainstream and did not change the world as early promoters promised.
So we shouldn’t get too far out ahead of ourselves with VR. When we do sometimes we win, but most times we do not.
Conclusion on VR goggles
With all that said, from the user perspective, let’s take virtual reality goggles with a grain of salt until we see whether they can and will transform the industry or just be successful in one slice of the pie. So far they are cool and interesting at first glance, but I am not convinced they will change the world. I do see VR making a contribution at least. The kind and size of that contribution is the only question.
The investor, however, loves this idea. There will be plenty of excitement in this entire space as it grows and changes in coming years. The only question is choosing the right companies to invest in. But, that’s always the challenge.
After all it took a decade for smartphones to change from the BlackBerry to the iPhone. Once it did, it changed the world. So perhaps we can look forward to the same thing here. Perhaps.
I’ll be writing more about VR in coming months focusing on different companies, technologies and industry changes. Who knows, VR may surprise me sooner rather than later.
