Virtual reality: Short term fad or the future of mobile?

Virtual reality: Short term fad or the future of mobile?

You’d have to be living under a rock in order to miss the virtual reality craze that has swept over the mobile market in 2016.

The technology has been around for a while, but has only really become a central tenet of mobile manufacturers’ strategy this year. 

This emphasis on VR began in earnest during Mobile World Congress in Barcelona. On the eve of the event, Samsung launched its Galaxy S7 flagship phone using the technology and got its VR headset plastered across the world’s media thanks to a well-timed Mark Zuckerberg photo opp. Earlier that same day, LG had unveiled its first VR product, while in the halls of Barcelona’s convention centre one of the most notable things about HTC’s stand was how similar it was in size to the one next door for its Vive VR brand.

Since then we’ve seen everyone from Huawei and Alcatel to Vodafone and Carphone Warehouse announce virtual reality headsets. Samsung meanwhile has continued to put its product into the hands of consumers by bundling its Gear VR device for free on pre-orders for its most popular handsets.

In 2015, the wearable market was hailed as being the next area of growth for mobile brands prior to the launch of Apple Watch. Now VR is getting a similar amount of hype and attention from the industry’s biggest brands. Apple’s wearable failed to have the catalytic effect many had predicted, and enthusiasm and interest in the technology waned. The plight of wearable technology serves as a clear warning to those banking on a VR boom.

The key difference between wearable technology and virtual reality at the moment is that VR has closer ties to the mobile device itself. The category extends the features of the phone, in contrast to the wearable, which largely mirrors the handset’s functions. For example, Samsung’s Gear VR allows the user to turn their phone into a virtual reality device. The only feature on its Gear S2 smartwatch that is not already present in the phone is the heartrate monitor.

The major problem for VR sellers is that the market is polarised between smartphone-compatible headsets and high-end PC or console-related products. HTC’s Vive headset has a £769.99 price point, a significant difference compared with Carphone Warehouse’s £24.99 Goji VR product. The experience gap between these two parts of the market affects the understanding of the technology and the expectations of consumers. The challenge for retailers and manufacturers therefore is not only to convince consumers why they need VR but also explain to them what type of virtual reality is suited to them.    

Content conundrum

The open-source approach to content creation across the internet means that mobile manufacturers are rarely lacking in applications to add to their products or material for customers to view on it. However, when it comes to VR, the low number of users and the high costs associated with making the content mean that there are fewer VR applications and less material for users to experience.

Sport and music are two content categories that have been touted as potential vehicles for the expansion of VR content. Steven Hancock, co-founder of Melody VR, specialises in the creation of music content on the VR platform. He believes that while the current selection of content is small, the input of the mobile market could change that: ‘Currently there’s very little content and much of it is demo-esque. That’s something we’re looking to break away from – we want to be able to offer hundreds of music experiences. The tech is incredibly new and people are still experimenting with the limitations of hardware and software, so a lot of rules are still being rewritten and it’s very early days.

‘There are a billion smartphones in the world that can function as VR devices. People will begin to realise that if you have a VR device in your pocket you don’t need to buy a separate device. There’s now a shift from a lot of telecoms companies to ramp up investment and the technology, which will be significant in helping people accept the new medium.’

The divisions in the hardware space are mirrored by those in the software domain. The app store platforms for VR range from high-end niche PC gamer territory to Google Play and YouTube VR related accessible content. However, it’s almost impossible to develop content that can be consumed easily across different headsets and the difference between VR experiences is significant.

The efforts to facilitate user-generated content hosted on platforms such as Facebook and YouTube have been championed as being the key to the adoption of the technology. As of yet, the volumes do not reveal a general public desperate to capture and share their lives in 360 degrees. The results are also really lacking the wow factor – while it’s nice to get a panoramic view of a friend’s wedding, the picture quality is not yet at a level to make it an immersive experience.

The case for B2B

One area that manufacturers have noticed has a ready appetite for VR as a tool is the business community. The clear economic and marketing benefits that VR offers to a range of companies are already being demonstrated, as Phil Lander, director of operator sales and b2b at Samsung, explains: ‘We are seeing an increasing number of developers coming forward and creating VR content. We’ve actually seen a huge number of innovations through business customers, or providers into the business market.

‘They’re adopting VR for things such as staff training, and customers such as McDonald’s have used it in store design. It took away that long slow physical process of having to build models through the software and we were able to give a texture and look and feel very, very quickly, in a cost-effective manner – and of course we work with car manufacturers. So they’ve really driven that innovation.

‘Now you see with our partnerships with Facebook and so on an increasing number of VR content. Through Gear 360 we’re encouraging our Gear VR capability customers to go out and create VR content. It’s a really exciting area and we are leading the way in that space.   

‘In the past 18 months we’ve started to see some great innovation. Some of the car manufacturers have launched new cars using Samsung VR capability. At the Rugby World Cup the New Zealand Rugby team offered the chance to experience the Haka in 360 as part of their showcase.

‘That was put together by AIG as a partner of New Zealand Rugby. So you’re starting to see these tools being used not only to promote services, but also for training and education, which is growing very much in the retail sector. Where deploying that in a timely manner is crucial. VR is growing in that space to service that need.

‘It’s growing, it’s increasing, it’s quite specialist in certain topics, but it’s also becoming quite mainstream. Estate agents and holiday providers are increasingly looking at VR to enhance their experience. For oversees customers particularly, looking to buy or go on holiday you can actually get a great experience using VR content so I think that’s an area that will continue to grow.’ 

A legal perspective

Rapidly evolving technologies inevitably unearth new challenges and raise different questions about existing relationships. One area that is rarely explored in connection with VR is the legal ramifications of the technology. From the copyright of material on the devices to injuries sustained while using the headsets, there’s a range of issues for manufacturers and operators to consider.

Sachin Premnath, an associate at law firm ReedSmith, is one legal professional who is already examining the VR market: ‘Assuming that networks and manufacturers are either going to have some kind of joint venture arrangement around packaging headsets with phones, and have data tariffs that incorporate phones, the thing they need to be thinking of is product liability. This relates to issues around people getting nausea or tripping over coffee tables and the impact on the brain. There is no regulation around it.

‘There’s really no direction from the law about how to deal with VR content from the consumer perspective. It’s one of those classic cases of the law having not kept up with technology. Tech surges ahead and it’s up to manufacturers to act responsibly until that regulation is in place to tell them what to do. There’s a framework around consumer protection law, but it’s not designed to deal with this kind of thing.

‘The closest there is is around traditional 2D video games, which arguably have some of the same effects but not as pronounced as in a VR environment. At the moment, manufacturers are using that existing framework and applying their own common sense to draft disclaimers. There is no real governmental guidance and that should come from Ofcom.’

In terms of content licensing, Premnath explains that providers and regulators alike would be examining how far current agreements went and whether they needed to do more: ’Content providers who already have licensed content to mobile networks will be looking at their contracts to see if that run of rights now covers VR. If that licence is drafted very broadly and no one thought about VR then it’s possible that a licensee would said they already have the rights and therefore do not need to pay any more to put it on a VR headset.

‘It’s a really untapped area – there’s nothing happening around this regulation. Ofcom has got other priorities with Brexit, but I would expect something in the next few years.’

Marketing an experience

The demonstrative nature of virtual reality technology is such that a number of retailers have jumped at the chance of showcasing the products in store. Manufacturers have also taken it upon themselves to bring the experiences to more consumers through marketing initiatives. This month, Alcatel unveiled a taxi that will travel around the UK showcasing the brand’s VR device, while Samsung announced that it would be taking a Hypercube VR experience box around British festivals featuring a pyrotechnic virtual gig from Scottish band Biffy Clyro.

For Steven Hancock, co-founder of Melody VR, providing customers with these VR experiences will only become more effective as the technology continues to develop: ‘We work closely with all hardware manufacturers, and at launch we expect to have prominent locations in all their store fronts. We want to move into retail so customers can go instore and demo our service on a VR handset.

‘Resolution is a huge challenge – when all the phone screens were made they were designed to be a foot away from your face and now they’re half an inch so the pixelation you currently see is down to the processing speed of the screen. In nine to 12 months we expect that to change – we’re at the Gameboy era for VR technology and in a few years it will be completely different.

‘No one waited for the iPhone 6 when the iPhone 1 came out, everyone wanted to know what was going on, and the buzz around it made people have to confidence to go and purchase that product – and it’s the same with VR. VR is very accessible; most headsets are either free or available at a range of prices.’



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