15th May 2020
Apple has confirmed that it has bought virtual reality company NextVR, which it was rumoured to have acquired last month by industry source 9to5Mac, valuing the deal at $100m.
Details and Implications:
Worldwide shipments of augmented reality and virtual reality (AR/VR) headsets were forecast to reach 8.9 million units in 2019, up 54.1% from the prior year, according to a report from the International Data Corporation that was released in March 2019. It predicted strong growth to continue, with global shipments to climb to 68.6 million in 2023 with a compound annual growth rate (CAGR) of 66.7% over the 2019-2023 forecast period.
As usual, Apple is being tight lipped about the acquisition, issuing only the statement: “Apple buys smaller technology companies from time to time and we generally do not discuss our purpose or plans”.
NextVR in turn has updated its website with a simple holding statement that reads: “NextVR is heading in a new direction. Thank you to our partners and fans around the world for the role you played in building this awesome platform for sports, music and entertainment experiences in Virtual Reality”.
So, the $100m question is why has Apple bought NextVR and what will it use the technology for?
To understand this, you have to look at the history of NextVR. First, it is quite old for a VR company – founded in 2009, long before the latest VR frenzy and before companies such as Facebook-owned Oculus. This means you would expect its technology to be well developed, not in its infancy. Second, it is not a hardware VR company like Oculus and many others, instead its focus is on capture and conversion of video content for the virtual world. So, filming events and then making them viewable inside a VR experience.
Next you have to look at Apple’s plans for VR. Way back in 2018 it was being reported that Apple was working on its own VR headset technology (codenamed T288), which was slated for launch in 2020 – will it be glasses like Google Glass or a full-on headset is one of the big questions. With Apple under increasing pressure to deliver upgraded and iterated versions of its core consumer products to drive its revenue – iPhone, iPad and Watch – the addition of an entirely new device that compliments these would certainly be attractive, but it would need people to have the reason to buy.
Which brings us to the world around us right now. Live sports and entertainment attendance are some way off in most major countries. The ability to capture live sports or gigs being played behind closed doors and to deliver fans the stadium experience, but from the safety of their own home, could be an amazingly popular service.
The combination of millions of people being deprived from their favourite entertainment experience, a general upskilling in digital technology due to new ways of communicating in lockdown, an advancement in technology – not least the roll out of next generation mobile networks and Apple’s usual approach of not being first into a market but being the best – Oculus, HoloLens, HTC Vive, PlayStation VR are all already in market – means that this may turn out to be quite a significant acquisition.