As Pokemon Go Stokes Demand for Video Technology Products, Competition Is Intensifying
Growing demand for virtual reality (VR) and augmented reality (AR) products has been among this year's technological highlights, with smash hit Pokemon Go leading to an explosive growth of public awareness. According to a report by International Data Corporation, the trend will accelerate as consumers seek more thrilling, interactive experiences.
The research and consulting firm, which tracks information and consumer technology trends, forecasts shipments this year of 9.6 million virtual hardware units and revenues of $2.3 billion. The report predicts that augmented reality hardware, which is at an earlier stage of its development than virtual reality hardware, will start to grow more rapidly, and that combined, sales of virtual and augmented hardware shipments will "surge past" 110 million units.
The IDC report identified three major device categories for augmented and virtual reality markets:
- Screenless viewers who use smartphone screens to create a virtual or augmented reality experience
- Tethered Head Mounted Displays that use a PC, game console or smartphone to feed a head-worn display
- Standalone Head Mounted Displays that combine processing with a head-worn display.
- The IDC report said that Sony, Samsung, HTC and Occulus are among the leading manufacturers of VR and AR hardware and will drive the skyrocketing growth.
"In 2016, the first major VR Tethered HMDs from Oculus, HTC, and Sony should drive combined shipments of over 2 million units," said Tom Mainelli, vice president for Devices & Displays at IDC. "When you combine this with robust shipments of screen-less viewers from Samsung and other vendors launching later this year, you start to see the beginning of a reasonable installed base for content creators to target."
Lewis Ward, IDC's research director of gaming said that video games will spur the continued growth. "Video games will clearly be the lead rationale for people to pick up an Oculus Rift, HTC Vive, or PlayStation VR this year," he said.
Among smaller trends in video, look for growth in sales of 360 cameras that offer a fuller, more satisfying viewing experience. They allow users to view different parts of a scene, including peripheral areas that would have previously been out of reach without multiple cameras. They allow viewers to immerse themselves in a scene.
Big-name brands like Samsung (SSNLF) , Ricoh, and Kodakare vying with smaller companies like Bublcam, 360fly, and Vuze to become the GoPro of 360-degree viewing devices; that is, before GoPro's revenues tumbled almost 50% in its first quarter year over year. The company's early success may have spawned some of the competitors it faces today in a new technology.
Samsung's Gear VR, Alphabet's (GOOGL) - Get Report Jump VR and Facebook's (FB) - Get Report Oculus Rift also support 360-degree content. Major camera makers like Nikon are also now selling rigs for recording 360-degree videos.
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CCS Insight, which provides information and analysis on mobile and wireless trends, forecasts sales of 24 million action cameras by 2018. FutureSource, which analyzes and predicts consumer electronics, expects action cameras to grow from 1% of overall sales to 14% by 2019.
"The action camera market has undergone a great deal of development over recent months," Futuresource analyst Arun Gill told Investor's Business Daily. "In particular, with 360-degree capture now available, we will see virtual reality applications emerge over the coming months, especially for sports broadcasting."
To be sure, the quality of 360-degree videos remains inferior to traditional fare. Run Direct Magazine, which covers video technology, forecasts improvement in processors, screen resolutions and content development over the next seven years.
Many 360-degree cameras suffer from poor resolution, limited memory and inadequate stitching, the combining of videos to create a panoramic view. Improved software could remedy these issues but developing such systems can take time.
The industry also faces challenges in producing enough units quickly enough. Among others, BublCam and Giroptic 360cam have experienced long delays.
Many developers are offering a preorder option to secure sales.
What 360-degree cameras are lacking in is a good software that could smooth out many of the kinks consumer-friendly 360-degree cameras currently face. That includes low resolution, limited memory and trouble with stitching -- the combining of videos to build a panoramic view.
Among the most promising players may be Lucid, a Sunnyvale, Calif.-based company whose co-founders hold engineering degrees from Stanford and Cal-Berkeley. Lucid applies the same technology used by Hollywood 3D camera production systems to a pocket-sized device with a 180-degree range. The Lucid camera uses binocular lenses to create depth and capture peripheral images more effectively. It also includes two microphones.
Proprietary software reads and processes data in real time, which alleviates some of the stitching problems.
The camera also requires less memory and computer processing power, which helps translate to its $399 price -- more affordable than some competitors.
In April, the company secured $2.1 million in venture capital funding.
Charlotte, N.C.-based Life Clips will release its new HD 360° action camera that its CEO Bob Gruder describes as being able "to capture everything around you." The device will sell for $269.
"When you get to the summit of that mountain, when you finish that marathon or how about that celebration with all your family and friends, sometimes a regular snapshot doesn't do the moment justice," Gruder said.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.