Samsung Expands Virtual Reality Ambitions but Sets Sights on Augmented Reality

The South Korean electronics giant has two new VR headsets in the works, but the company sees more of an opportunity in the AR space.

Samsung (SSNLF) has already dipped its toes into the virtual reality space with its Samsung Gear VR headset, and the company likes what it sees so far.

At the Virtual Reality Summit in San Diego on Thursday, Samsung VP Sung-Hoon Hong said that his company has two new virtual reality headsets in the works. The first, the Samsung Gear VR 2, Hong said “will be presented in a short time,” while another headset will build upon existing augmented reality technology from Microsoft‘s (MSFT) HoloLens and start-up VR company Magic Leap.

Samsung could be more heavily focusing on augmented reality instead of VR going forward, Hong said. “AR has much better business development for Samsung,” he said at the summit, according to Wearable Zone“That’s what we’re aiming for.”

Samsung’s VR business is already quite popular, though. According to analytics firm IHS Markit, Samsung will end 2016 with 5.4 million Gear VR headsets sold in total since the product’s launch in November 2015, giving it “the largest installed base out of all major branded headsets.”

But that might soon change.

“The launch of [Alphabet‘s (GOOGL) ] Google’s Daydream View – Google’s next generation smartphone VR headset — will slowly disrupt Samsung’s dominant market position in the smartphone VR market,” the firm said. “While the high price of Google’s Pixel phone means the 2016 impact will be small, IHS Technology forecasts that Google Daydream View will become the most popular headset for VR by 2019.”

The firm sees the Daydream View knocking the Gear VR off its throne due to broad industry support, a low $79 price point, and its premium smartphone VR experience. Samsung’s Gear VR costs $99.

Also gaining traction in the VR space is Facebook (FB) , which purchased VR technology company Oculus VR in 2014. Facebook’s Oculus makes the Oculus Rift, a $600 VR headset, and also partnered with Samsung on the Gear VR device.

Still, there could be plenty of space in the market for a few major players like Alphabet, Facebook and Samsung, as the firm sees the total number of installed VR headsets reaching 80 million by 2020 from 4 million this year. The firm projects consumers will spend $7.9 billion on VR headsets by 2020, and $3.3 billion on VR entertainment.

Like Hong, however, Apple’s (AAPL) Tim Cook sees more opportunity in the AR market than in VR.

“My own view is that augmented reality is the larger of the two, probably by far, because this gives the capability for both of us to sit and be very present talking to each other, but also have other things visually for both of us to see,” Cook said in an interview with Good Morning America earlier this year.

Samsung is also more concerned with the AR market, and the company is currently working on technology that will let users interact with virtual experiences from the screen in a real-world environment, which Hong said could be revealed at the 2017 Mobile World Conference in Barcelona in February.

Hong noted that the company is developing its holographic technology. “Samsung’s hologram technology is really, really realistic,” Hong said. “It looks really touchable.”

But Samsung doesn’t expect to create successful AR technology alone. Hong said that the company has already examined prototypes of Microsoft’s AR offering, the HoloLens. Samsung is also hoping to collaborate with others in developing more technology in the space, and sees a “possibility to partner” with Magic Leap.

Hong added that Samsung wants to speak to any companies, start-ups and major people involved in AR and VR technology. “If there are any good ideas to make AR glasses, we want to talk to you,” he said.

 

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