Point of View

Business Leaders Should Get Real With Virtual and Augmented Reality

June 10, 2020

VR has come along way in the last 5 years. With the launch of new types of stand-alone headsets, consumers using VR with their mobile phones like Google Carboard and AR embedded in new businesses. Business leaders must explore where VR is now and how it is likely to be used as a force for disruption in the next few years.


We know a lot of you are probably thinking “It’s too soon!” or “Not another new technology on the horizon—blockchain was the straw that broke this camel’s back!” Why on earth should you bother with what seems to be at best a gimmick or a toy?


Shift your question from “Why should I care?” to “What should I do to prepare my business to use AR and VR in the next three to five years?”


VR is like mobile technology; it can fundamentally change how people interact with technology, and it can be a substitute for several consumer electronics categories. VR is potentially a replacement for (or an important addition to) mobile phones, laptops, game consoles, TVs—any screen-driven device. When the technology is sufficiently comfortable to use, why would anyone have a regular TV when they can have a TV as large as they want and wherever they want it through a VR headset. The same idea applies to traditional computers—you don’t need Star Trek holography for Minority Report-style computing (see Exhibit 1), where you use your hands and voice to interact with a screen floating in front of you. VR and AR can do that.



Exhibit 1: Virtual Desktop working in VR




Source:  Virtual Desktop, Inc.



To continue with the mobile phone analogy, VR technology moving beyond the Motorola brick (DynaTAC) stage of its lifecycle and rapidly heading toward Nokia dominance (mobile phone ubiquity), particularly with the introduction of new standalone headsets like the Oculus Quest. The Oculus Quest provides the six degrees of freedom required for immersive VR, and it doesn’t require cabling to a PC or external cameras. A user can swipe between windows to watch TV in VR or use a virtual desktop computer. Technology advancements will help developers take the next step to more widespread adoption beyond the current game-centric consumers.



Exhibit 2: Virtual reality is moving beyond the “brick” stage




Source: HFS Research, 2020



OK…but we’re talking years, and there are issues…right?


There are several market challenges in the way of widespread adoption of AR and VR. The consumer adoption proof-point for VR stalled because of supply issues with headsets. The Oculus Quest has been on backorder almost since its release in 2019, and COVID-19 has exacerbated the issue. Although this is a short-term problem, it can impact investments in development if businesses don’t see returns. Of course, a lagging supply might just cause pent-up demand to explode when the devices are available again. Supply issues might also impact Oculus, as other competitors will have had time to develop competitive headsets.


Interestingly, if headsets were already more freely available, VR would have been used more during the COVID-19 pandemic; companies wanted to interact more effectively in teams and host more immersive events. Plus, companies could use it to showcase products like providing virtual real estate tours and displaying expensive items like furniture in situ; IKEA used a mobile AR app for this.


The current emphasis for AR and VR is gaming, and marketing is directed at gamers—largely because the original PC-based headsets were expensive and required a high-spec computer to render the graphics. The cost and technical requirements are decreasing as firms like Oculus produce cheaper, self-contained headsets and the market pursues the more casual gaming space, and make the products more mainstream.


Current headsets can be uncomfortable to wear, particularly for long periods. Physically, the Oculus Quest is front-heavy, and wearing it for more than a couple of hours would be hard. Also, headset technology must overcome vision, and motion sickness-related issues before we can use them to replace computers or televisions for long periods.


So, where is this heading? Light is right


The Oculus Quest’s competition is around the corner; the Pico Neo 2, for example, is a similar but more comfortable form factor with better weight distribution and an adjustable headband. The Pico Neo 2 also uses Boundless XR, which enables 5G and WiFi transfer of cloud content and local PC-rendered content to the headset. The Quest allows wired and wireless content, but it requires tweaking to make it work well. A decent out-of-the-box, high-bandwidth, low-latency wireless connection means that headsets should weigh less (improving comfort) and work better (improving usability), and they can be a testing ground for mixed reality and augmented reality uses.


Mixed reality is where we will see an exponential lift in uptake and where it becomes an existential change agent. You’ll have a TV, mobile phone, and laptop—but they will all be virtual. This big change is probably why Facebook invested in Oculus and wants to be an integral part of making VR/AR a ubiquitous user interface technology augmenting mobile phone technology.


When people talk about the use cases for augmented reality, they often mention AR helping mechanics repair products by overlaying technical schematics or helping a logistics company overlay warehouses with live data. While these are likely implementations, discussions often underplay AR’s broader societal impact and how fundamentally integrated into the world these devices could become.


The Bottom Line: Don’t be the VR Blockbuster or the AR Kodak


AR & VR might seem like sci-fi or frivolous given that so far, use cases have emphasized gaming and entertainment. However, big strides in the development of a lightweight headset similar to eyeglasses in size and comfort is likely within the next two to five years particularly as technology advancements enable cloud /external processing to be injected into a stand-alone headset via a fast network like 5G. When this happens, it could arguably impact consumer-facing organizations as much as smartphones did, and it brings with it as many possibilities for innovation. If you’re not thinking about how to use VR and AR with your customers, it’s possible that the VR Netflix is plotting your Kodak moment.

Sign in to view or download this research.


Lost your password?


Insight. Inspiration. Impact.

Register now for immediate access of HFS' research, data and forward looking trends.

Get Started