After a VR-free year from Apple, VR headsets deemed "the biggest loser" of 2016

Posted:
in Future Apple Hardware
Apple has been attacked throughout the year for failing to jump on the Virtual Reality headset bandwagon following Facebook, Samsung, Google, HTC, Microsoft, Sony and others. Yet after a year of hype, VR headsets remain a niche that's failing to live up to even conservative expectations.


Wheels come off the VR hype wagon

Apple's "failure" to deliver a VR headset product this year has been the subject of many handwringing articles from analysts and journalists expressing concern for the company given the exciting future promised by VR.

However, a variety of research firms are now reporting much slower VR sales than expected--due to both limited content and high hardware costs.

Further, the fragmented market split between higher end PC and console-based headsets (including Oculus Rift and Sony's PlayStation VR, below) and various lower end smartphone-based headsets (including offering by HTC, Samsung and Google) has resulted in a dearth of compelling content for any particular ecosystem.




An article by Monica Chen and Joseph Tsai for Digitimes stated that the virtual and augmented reality "market was originally expected to pick up strongly in 2016, but demand for related applications has been weakening recently."

The emergence of new flavors of VR in 2017, including Asustek's ZenFone AR based on Google Tango and Acer's VR HMD based on Windows Holographics, has "some market watchers are concerned that the VR/AR ecosystem may not be mature enough to contribute much to the players," the article noted.

VR Fail Sales

A report by James Brightman for Games Industry Biz, citing sales figures from SuperData, indicated that while premium gaming consoles such as Sony's PlayStation 4 were selling well due to aggressive promotions (recently having reached sales of 50 million units, across three years), Sony's $399 PSVR offering fell far short of its estimated forecast of 2.6 million units.

SuperData said that only 750 thousand PSVR units have shipped, explaining that "notably fewer units sold than expected due to a relatively fragmented title line-up and modest marketing effort." The research firm stated that VR is "the biggest loser" of the season. VR is "the biggest loser" of the season - SuperData

Facebook's Oculus Rift is expected to only sell 335,000 units this year, while cheaper smartphone-based VR headsets such as HTC's Vive, Google Daydream and Samsung's Gear VR are not doing much better.

Google's effort to standardize VR for Android with Daydream has only shipped about a quarter million units, nearly half the number it was estimated to achieve, while even Samsung's heavily promoted Gear VR has failed to sell (or give away) more than 2.3 million units across 2016.

VR vs Apple Watch

Samsung's Gear VR is low end, $100 headset peripheral that requires a premium Samsung phone (such as a Galaxy S6, S7 or Note 5). As a vehicle for drawing interest to Samsung's high end, it has clearly failed.

Contrast that with Apple's own peripheral for its late modeled iPhones: Apple Watch, which has sold by millions each quarter, profitably, at prices from $300 to more than $1,000, while creating demand for fashionable bands, drawing attention to Apple Pay and attracting sports enthusiasts to Apple's ecosystem.

Apple Watch


Even if Samsung had shipped each Gear VR at full retail price, its total sales would only amount to a quarter billion in revenue. Apple Watch has contributed billions of dollars in high-margin reviews for Apple each quarter. That hasn't stopped industry wags from portraying Apple Watch as a "failure" while remaining giddy about the hyped potential of Gear VR.

Another similarity between the emerging market for VR headsets and smartwatches is that various industry players--lead by the same firms, including Samsung and joined by Google and Microsoft and their various licensees--also raced to market watches that saw minimal interest from consumers.

However, immediately after launching Apple Watch it took majority market share among smartwatches, trouncing years-old efforts by Samsung Gear and Android Wear, neither of which remain very relevant today.

Apple sees AR as a bigger opportunity

In August, Apple's chief executive Tim Cook told the Washington Post that he thought augmented reality was "extremely interesting and sort of a core technology."




In September, Cook said in an interview with ABC News, "there's virtual reality and there's augmented reality -- both of these are incredibly interesting, but my own view is that augmented reality is the larger of the two, probably by far."

In October, Cook again touted the benefits of AR over VR, stating "There's no substitute for human contact, and so you want the technology to encourage that."

As with the smartwatch, Apple has repeatedly arrived to market with offerings that were years behind the unfinished, inferior products of its competitors, using new technologies and a fresh approach to addressing users' needs and desires.

Apple's iPod was a substantially better music player; iPhone was a vast advancement over the status quo of smartphones, and iPad crushed existing tablets and has never been bested since by any other tablet maker. That bodes well for Apple's next leap into the AR/VR market, particularly given the poor sales and apathetic response current VR headsets are experiencing.
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Comments

  • Reply 1 of 64
    I'm hoping Apple does something great with AR. At this stage the technology fits Apple's MO in general by coming in "late to the game", but with something innovative and "obvious" as it concerns how people actually use, or are comfortable using the technology. Also, it would be cool to have another contributor in developing the technology overall. 
    watto_cobra
  • Reply 2 of 64
    VR is expensive, lacks content, and its based on what hardware you buy.

    AR, on the other hand has been adopted by millions of users already (pokemon go).
    baconstangravnorodomcornchipmike1calibrakken
  • Reply 3 of 64
    VR has hardly been a failure for Sony. How on earth could they sell 2.6 million VR headsets in less than 2 months? Playstation VR has only been on the market since October. Every retailer has been saying they fly off the shelves when they are in stock. Even Sony has said sales have been great and are on track to meet sales expectations. Sony is expanding VR production to meet demand. Playstation VR is sold out just about everywhere. Whoever estimated Sony to sell 2.6 million VR units in less than 3 months is a complete idiot. 
    edited December 2016 goodbyeranchr00fus1fastasleeprezwitsdysamoria
  • Reply 4 of 64
    That's obvious because a tethered headset and joystick are ridiculous things. If it is joystick then I already do that in my 2D flat sreen why would I wear the whole display assembly on my head?

    There is no VR unless you introduce your very self into the scene. That requires an untethered headset and a body kit.
    edited December 2016 dysamoria
  • Reply 5 of 64
    The first picture - of a dude with the beard and the mouth open in wonder - should actually show a pic of Carmack - the guy from "Pseud's Corner" that thought all this VR stuff had any value.
    VR is something you might do in your bathroom (if you were sad enough) but in public, it's all of the downside of Google Glass on steroids.
    AR - indications of interesting/important events close-by - has much more appeal, utility (and class).
    baconstangcalimagman1979brakkendysamoria
  • Reply 6 of 64
    I am not too likely to leave my house with VR googles on my head.  I go everywhere with my apple watch.  Let the others figure out if this will amount to anything.  
    watto_cobradysamoria
  • Reply 7 of 64
    lkrupplkrupp Posts: 4,614member
    AppleInsider said:
    As with the smartwatch, Apple has repeatedly arrived to market with offerings that were years behind the unfinished, inferior products of its competitors, using new technologies and a fresh approach to addressing users' needs and desires.

    Apple's iPod was a substantially better music player; iPhone was a vast advancement over the status quo of smartphones, and iPad crushed existing tablets and has never been bested since by any other tablet maker. That bodes well for Apple's next leap into the AR/VR market, particularly given the poor sales and apathetic response current VR headsets are experiencing.

    I can’t believe it! A positive statement about Apple. I also recall the CEO of Oculus blathering on about how he wouldn’t be developing for the Mac until it had “decent” specs. What a difference a year makes.
    baconstanggilly017calipatchythepiratemagman1979watto_cobrajony0
  • Reply 8 of 64
    That's obvious because a tethered headset and joystick are ridiculous things. If it is joystick then I already do that in my 2D flat sreen why would I wear the whole display assembly on my head?

    There is no VR unless you introduce your very self into the scene. That requires an untethered headset and a body kit.
    A VR body kit?  This is the book for you: "A Philosophical Investigation" by Phillip Kerr.
  • Reply 9 of 64
    AR 2016 = MP3 1999:

    Products exist, but they're ugly and awkward. Apple is developing a sleeker alternative that will transform the category.
    watto_cobra
  • Reply 10 of 64
    paxmanpaxman Posts: 4,383member
    That's obvious because a tethered headset and joystick are ridiculous things. If it is joystick then I already do that in my 2D flat sreen why would I wear the whole display assembly on my head?

    There is no VR unless you introduce your very self into the scene. That requires an untethered headset and a body kit.
    I can't see VR as anything but niche. A headset and a body kit? I just can't imagine too many people will bother. I am not a gamer so perhaps I am missing something. The gaming industry is huge but that doesn't mean VR gaming is or is going to be huge. I assume the gaming industry includes casual gamers including iPhone and Android gaming. Does anyone know what proportion of the industry that is? Of all the the 'semi serious' gamers out there, how many of those are prepared to get into a VR suit to kill and hour or two with their mates? How big a part of the overall gaming industry does the 'semi serious' gamer represent? 
    baconstangcornchipmike1dysamoria
  • Reply 11 of 64
    eriamjheriamjh Posts: 1,002member
    If you Thought google glass looked bad, look at the dork in the article pic.  


    baconstangking editor the grateravnorodomcalibrakkendysamoria
  • Reply 12 of 64
    lkrupp said::
    I can’t believe it! A positive statement about Apple. I also recall the CEO of Oculus blathering on about how he wouldn’t be developing for the Mac until it had “decent” specs. What a difference a year makes.

    eriamjh said:
    If you Thought google glass looked bad, look at the dork in the article pic.  


    Don't you read any previous posts?
  • Reply 13 of 64
    When you say "the biggest loser", are you referring to the hardware or the people that wear them?

    I'll just wait for the Holodecks.
    edited December 2016 calimagman1979
  • Reply 14 of 64
    jbdragonjbdragon Posts: 1,193member
    VR has hardly been a failure for Sony. How on earth could they sell 2.6 million VR headsets in less than 2 months? Playstation VR has only been on the market since October. Every retailer has been saying they fly off the shelves when they are in stock. Even Sony has said sales have been great and are on track to meet sales expectations. Sony is expanding VR production to meet demand. Playstation VR is sold out just about everywhere. Whoever estimated Sony to sell 2.6 million VR units in less than 3 months is a complete idiot. 
    Can you not READ? Sony's $399 PSVR offering fell far short of its estimated forecast of 2.6 million units. SuperData said that only 750 thousand PSVR units have shipped, explaining that "notably fewer units sold than expected due to a relatively fragmented title line-up and modest marketing effort." The research firm stated that VR is "the biggest loser" of the season. Sony HAD a estimated forecast of 2.6 million that they were going to sell. You can estimate anything you want, doesn't mean it's going to happen and in this case fell way short to only 750 thousand. That falls way short of the Estimate!!! Add on's for consoles pretty much always FAILS. As soon as MS pulled out the Kinect from the Xbox One and made it optional,. that pretty much killed the Kinect from what it could have been. I can go down a long list of Console Add-On's that have failed. You get a few games that take advantage of it and then it's over with. It's the whole Chicken and the Egg and what came first!!! Company's aren't going to write the games that make use of it if people don't own it and people won't buy it if there's no games using it. If it's not a part of every console, it's going to fail. It's kind of like why didn't MS release a Xbox 360 with a HD DVD drive built in, instead of sticking with a Add-On. Well at that point it could only ever be used to play movies and games were on DVD and you can't split the market place. You can't release a game on a HD DVD when only a tiny fraction of users would have a Xbox 360 with that in it. Why things like the PS2 HDD add-on failed and the port disappeared on the slim version. Or the Sega CD add-On, or the N64 Memory expansion pack, and so on and so on.
    cornchipmike1calimagman1979brakkenwatto_cobra
  • Reply 15 of 64
    dsddsd Posts: 132member
    Bring on the Apple ARDF.   B)
    edited December 2016 cornchip
  • Reply 16 of 64
    joeztanjoeztan Posts: 1unconfirmed, member
    Disclaimer: I'm an early VR adopter, technology enthusiast and a KickStarter backer for Oculus in 2012.

    My biggest tip to people is to give it a try and see for yourself. It'll open your mind to what the future has in store.

    2016 was the first year that consumer PC VR headsets came out. To me VR / AR in 2016 feels like 1995-2000 when the first serious consumer 3D GPUs were coming on to the PC market. It has taken around 20 years to go from S3 
    ViRGE to an Nvidia GTX 1080, in that time the industry matured and 3D content and applications (from 3D games to supercomputer simulations) became very compelling.

    Nowadays you can't buy any PC/Mac, or even smartphone, without some form of 3D GPU in it.

    In my opinion the current state of Oculus Rift and HTC/Valve Vive on PC hardware is already good enough, and it will build rapidly forward. The real challenge is producing compelling content and making it more affordable. But all emerging technologies started out this way.

    Recently Khronos (the people behind OpenGL and Vulkan) have started the formation of an industry VR consortium (https://www.khronos.org/vr/). Just think about that, VR in 2016 is like consumer 3D GPUs in 1995 when well supported consumer industry wide API weren't even around (we now have mature OpenGL/Vulkan and Direct X support in the two major GPU companies)!

    Notably both Apple and Microsoft are currently missing in the Khronos group, it is an indication of the strategy of both these companies.

    Basically it's too early to tell whether VR will be a niche or the next computing platform, the next couple of years will create a clearer picture. Right now I'm just marvelling at where the technology is at. In 2012, the original KickStarter supporter for Oculus started and four years on we have the first commercial units selling in the hundreds of thousands. By 2020 it'll be really clear where things are at, and Apple will probably jump in at this stage.

    One correction on the AppleInsider post:

    "Facebook's Oculus Rift is expected to only sell 335,000 units this year, while cheaper smartphone-based VR headsets such as HTC's Vive, Google Daydream and Samsung's Gear VR are not doing much better. "

    Last I heard the HTC Vive was not a smartphone-based VR headset.
    edited December 2016 cornchipslprescottmobius
  • Reply 17 of 64
    jungmarkjungmark Posts: 6,324member
    VR is only for hard core gamers. The average person doesn't care about it. It'll be like 3D tvs. 
    baconstangcornchipcalimagman1979dysamoria
  • Reply 18 of 64
    Lots of commentary from people who don't sound like they've used any of these devices at all on an article by research firms who are talking about sales numbers versus forecasts etc. versus experience.

    As an owner of the PSVR, let me just say that I'm completely blown away by it, especially considering that it's a first-gen product. I've had several experiences where my jaw was figuratively on the floor with what I was seeing. Not all the software out there is equally impressive, there are definitely some duds and half-baked demos, but the ones that work well are really, truly amazing.

    I tried a couple passive demos at first where you can only look around, but once I played the Batman game where I could grab Batarangs from my utility belt with the Move controllers and wave/rotate them in front of my face and interact with the environment, I finally got it — it's the future of gaming, and going back to a 2D experience on the TV felt like a second-class experience IMHO. I can totally imagine how much more amazing it'll get with a wider field of view, higher resolution, etc, but again — amazing for a first-gen console add-on product.

    It's not something you can figure out by watching a video online or having someone describe it to you, you have to experience it for yourself. That, I would imagine, is going to be the biggest uphill battle in selling a lot of these things.
    joeztancornchipslprescottmobius
  • Reply 19 of 64

    That's obvious because a tethered headset and joystick are ridiculous things. If it is joystick then I already do that in my 2D flat sreen why would I wear the whole display assembly on my head?

    There is no VR unless you introduce your very self into the scene. That requires an untethered headset and a body kit.
    You have obviously not used this technology. The reason you wear the headset is so you can move and look around in a fully three dimensional environment. This is not the same as moving a controller and watching your view pan around on a TV in front of your eyes. A good example is an interactive "film" type thing on a miniature stage with claymation type characters I was watching, where you could literally peer around a corner to see another character walking down a street that you couldn't see before. Or walking toward an object and looking down into an opening in the top of a ship to see the characters doing stuff inside of it, as if the object is right in front of your chest. By moving your head, and your feet (to a limited degree). Or in a 3D world where you're standing in an alley, and you can look up and crane your head to peer around a fire escape, or around a corner to spot an enemy. It "feels" like you can reach out and literally touch things in front of you. As I said in my previous posts, trying to describe it is difficult. Trust me, it's nothing like your 2D flat screen.

    Edit: maybe you're focusing on the tethered aspect of it, but it's not that big of a deal. Nobody is going to set up a full walk-around multi-camera setup in their living room. The PSVR limits you to probably the average amount of space that most people have in front of their TV/living room area. Move controllers give you wireless dual hand controllers, some software just uses the DualShock controllers which is better suited to some types of games, etc.
    edited December 2016
  • Reply 20 of 64
    sockrolidsockrolid Posts: 2,736member




    VR is the new 3D TV.
    Just another faddish gimmick that may or may not ever become mainstream.

    And that Samsung (?) commercial doesn't help one bit.
    You've seen it.  It shows a guy pawing at the air while wearing a headset.
    If you don't even attempt to show the wondrous vista he sees, you've completely failed to sell the product.
    You're just making it look like vaporware.
    edited December 2016 baconstangroundaboutnowcalimagman1979dysamoria
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