A Kellogg MBA Competitive Analysis: Major Stakeholders in Augmented Reality / Virtual Reality (Sony, Oculus, Valve)

Over the Winter Quarter, our Technology and Innovation Strategy class at Kellogg culminated in a final research paper. The paper looked at the shuttering of Google Glass and what Google’s next steps should be. As part of this, I got to look deeply into the current state of Virtual Reality, which I have been following and waiting for (hello Oculus!) since I was a child, and Augmented Reality. I will be posting portions of the paper (it’s quite long) in digestible chunks here over the next week. Our team was comprised of Melissa Caldwell, Raghu Chirravuri, Olga Gordon, Jeff Hoffman, and me, Michael Nguyen. 

To see all of the sections, see my tag virtual reality.

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Competitive Analysis: Major Stakeholders in Augmented Reality / Virtual Reality

While numerous firms are engaging in VR or AR headset platforms, firms that have major corporate backing to avoid being acquired and have the finances to pose a legitimate threat to Google are discussed below and in summary Table A.

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Sony (Project Morpheus – Virtual Reality) and Valve (HTC Vive – Virtual Reality)

Sony and Valve are similar in their focus on gaming entertainment through VR headsets. While Sony has its own console platform (Playstation), Valve focuses on the PC market, creating a consistent gaming experience for PC gamers regardless of hardware manufacturer or operating system through its Steam gaming platform. In March 2015, both companies revealed they are planning to release their products by the end of 2015. Sony will develop and manufacture its own headset, while Valve will work with partners such as HTC to release headsets, similar to Oculus and Samsung in producing Gear VR. With both firms’ focus on entertainment, these are greater threats to Oculus, discussed below, rather than Google AR and VR.

Facebook (Oculus Rift – Virtual Reality)

The Oculus headset is a tethered (wired) unit that requires a high-end PC to power, creating a sit-down user experience. Oculus has gained traction in VR and AR by creating an ecosystem of applications and new hardware add-ons that add functionality to the device such as body movement and finger tracking for user interfaces.

Oculus initially had a pure focus on gaming and simulation rather than productivity, making it less of a threat to Google. However, with the Facebook purchase of Oculus VR and the announcement of the partnership with Samsung to release Gear VR (more detail below), the Oculus platform is more of a threat. Aside from its current dominance as a social platform over Google+, Facebook has also launched search, advertising, and portal-like products that combined form a significant threat to Google as the default source of information of the masses.

Oculus has released several developer headset kits to the community, with the first consumer-focused version expected in 2015. Oculus has repeatedly stated the consumer product must be oriented to the mass-market not only in functionality but also price. While Facebook does not have direct experience in producing hardware at mass levels, Samsung, its partner on the Gear VR, does. Thus, we believe that Oculus will be able to deliver a mass-market headset more quickly than other competitors.

Samsung (Oculus Rift / Gear VR – Virtual & Augmented Reality)

Samsung’s Gear VR is an untethered (wireless) headset that requires the Galaxy Note 4 mobile phone. Note 4 users simply insert the device into the headset. Using Oculus technology, the Gear VR has an advantage over Oculus because it supports AR through its outward facing camera. Unlike other AR solutions, Gear VR cannot not reasonably be worn outdoors. While Gear VR does not compare to full-powered VR solutions such as Oculus, the partnership creates two concerns for Google. First, Samsung is a dominant global hardware partner for Facebook, with experience in display and mobile technologies. With Samsung as a manufacturing partner, Oculus would have an advantage in merchandising over other platforms. Second, the partnership creates more exposure to the Oculus platform for users and app developers. The Gear VR was released in December 2014 at $199 (non-mass market focused “Innovator Edition”); based on Samsung’s aggression in the mobile market, we can expect rapid iterations on the platform and increased compatibility with new phones.

A Look at the Samsung Galaxy Tab 2 in 2014 [Review]

A few months ago, I got a great present from Midland – a Galaxy Tab 2 10.1” Wifi (Wireless, no cellular 3G) tablet. Even though Midland himself said it was a bit slow, I wanted to check it out anyway as I’ve never owned a true tablet. After installing CyanogenMod to make the tablet run as fast as possible, here are my impressions as well as some app recommendations.

Web Browsing: this is the worst aspect of using the device. I use Firefox, which is well regarded on Google Play, and also what I use on my laptop. Whether you are browsing multiple tabs or just a single one, loading web pages feels much slower than on the same connection with a PC. Firefox tends to forget which websites I’ve opened and sometimes will erase my session completely even when I have not closed the browser, leading to much frustration. In general, while a normal user who tends to open 1 page at a time and read casually will not have a problem with the Tablet, it’s an inadequate experience for me.

I use Firefox along with the AdBlock and LastPass extensions. I suggest paying for the LastPass Premium service so you can access its mobile app – LastPass lets you save your passwords in the cloud and can help you manage your passwords across desktop / laptop PC’s, mobile phones, and tablets. Because of this, I only remember critical passwords from a few sites, otherwise letting LastPass store the rest and making it convenient for me to login to websites wherever I am. AdBlock removes ads from websites. Although I do like ads from time to time, since the Note is so slow at web browsing, every little bit of speed helps.

Apps: If your favorite sites and services have good Android apps, this will take away much of the pain from the spotty web browsing experience. Using Facebook, Twitter, etc., works great on the large 10” screen. The app experience is not necessarily incredibly fast, but I have never felt it to be slow, at least not in comparison to the web experience. As I have been traveling a lot recently, TripAdvisor is a prime example of a website that is terrible to use on the tablet but is quite good on the app side. However, instead of having one general TripAdvisor app that you can use for any location, TripAdvisor only has apps for specific cities. This is great if you are going to a city (Frankfurt, Bangkok, etc.) that does have a specialized app for it, but obviously terrible if it does not (Saigon).

For news, I use Feedly. It does not match the PC version because I cannot enable the Android app to mark an article as “read” if I swipe past the headline. Thus, if I go into Feedly every couple of hours, I will continue to revisit articles that I did not want to read. This has really discouraged me from using the app.

Typing is not a great experience because of the screen dimensions, regardless if you use an alternative keyboard (the tablet can lag at times when using Swiftkey, making me slow down and create more mistakes) or the standard one. This tablet won’t be a go-to device if you are hoping to write long WordPress blogs on it.

Samsung Galaxy Tab 2 10.1Comic Books: I always imagined that this would be the main reason for owning a tablet, at least for me, and I’ve been proved right. My reading of digital comics has really been extensive this year- likely more in the last 3 months than in any 1 year period for the last 10 years. ComicRack makes reading comics anywhere anytime super convenient just as the Amazon Kindle made reading books did.

Media Player: (Movies, Music, Photos) I’m a bit disappointed you cannot use Amazon Prime streaming on non-Kindle Android devices. Otherwise, YouTube has an excellent Android app. I use MX Player to load movies from memory cards. Smugmug has a great app which will download your photo library to your Android device automatically, making it easy to see or search your photos wherever you go, regardless of your data connection. When I am back in the US, I may try some music radio apps like Spotify or Pandora. For now, all I have loaded is Hype Machine, which I have used on the PC, but not yet tried on the tablet.

Books: I think the Amazon Kindle app is solid on the Android. I still prefer reading on a Kindle device as it’s easier to switch pages and read with one hand, but if you only have this tablet, you will enjoy reading on it as well. Adobe Reader is a surprisingly solid app for reading PDF’s.

Games: I haven’t tried much in games. From what I’ve seen of Ha playing, world favorite Candy Crush works great on it. In general, I don’t like playing games on a touch screen or mobile device.

As for the physical device, it feels pretty standard. The resolution is relatively low for today’s devices, but this doesn’t bother me much. All the buttons work fine, and the tablet is not too heavy. I added another 32GB SDHC card to supplement the internal 16GB and a Tech Armor screen protector which makes fingerprints less obvious but also dulls the screen slightly. A complaint I have is regarding the unit’s battery charging. I am not sure how to charge the tablet via USB (meaning I cannot plug it into my computer to charge it), and even when I charge it via a power outlet, it just takes too long – I think it would take at least 5 hours to charge the tablet, which is essentially an overnight charge. iPhones and my laptop (Lenovo x230) get charging done, it feels, within 2-3 hours.

The Tablet 2 is nearly two years old today, and since then Samsung has issued some amazing new replacements, at least in terms of their hardware specifications. If you are able to get a Tablet 2 in good condition for around $100, I definitely recommend one, particularly if you do not need it much for online web browsing.