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

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applevrheadsetSales 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.

Related Roundup: Apple Glasses

Top Rated Comments

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46 months ago
no one wants to strap these things to their face...
Score: 30 Votes (Like | Disagree)
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46 months ago
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.
Score: 12 Votes (Like | Disagree)
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46 months ago
Demand is weak because the technology is nowhere near good enough to be successful. These things take time.
Score: 10 Votes (Like | Disagree)
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46 months ago

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.
Score: 10 Votes (Like | Disagree)
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46 months ago

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.
Score: 8 Votes (Like | Disagree)
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46 months ago
I think the technology is so new, people are unsure where it fits in. Both for consumer usage, but also in a business setting.
Score: 4 Votes (Like | Disagree)

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