By Choi Sung-jin
Samsung Electronics, which is racking its brain to find a new growth engine that supplements its smartphone business, has found a way in the “virtual reality” (VR) business, industry sources said Wednesday.
“VR devices may be complementing smartphones in games and entertainment for the time being, but will soon expand to various sectors such as education, vocational training, health, construction, sports and communication, to grow as an independent industry,” a company spokesman said.
Behind Samsung’s push for the VR business is Vice Chairman Lee Jay-yong’s will to make it a new revenue source. “VR has the growth potential to replace the smartphone, so we need to focus not only on making devices but on developing content to preempt the market,” Lee reportedly told officials mapping out the company’s future strategy.
Samsung is already one of the front-runners. In November, it put to market the Samsung Gear VR headset, at 129,800 won in the domestic market and $99 in foreign markets, and sold hundreds of thousands of the devices worldwide. Samsung’s VR experience booth also stole the show at CES 2016 in Las Vegas last month.
The IT giant is focusing on developing content. At the Mobile World Congress that will open in Spain later this month, Samsung will release not only the Galaxy 7 smartphone loaded with VR functions but a 360-degree camera that can produce VR content, developed by Samsung Research America in the Silicon Valley.
Samsung is making related investments quite briskly, too. It invested $6 million in Baobab Studio, known for making VR content, last year-end, and an additional $25 million in WEVR, a U.S. venture firm that operates “Transport,” a platform for distributing VR content, where people can produce VR images and share them. Last October, Samsung invested in 8i, a New Zealand company that was developing a technology that enables users to enter VR and feel their movements there.
The Samsung Gear VR links to the company’s new smartphones, such as the Galaxy Note 5, Galaxy S6, Galaxy S6 Edge, and Galaxy S6 Edge+. Users download VR content through the phones and put it in the Gear, which means VR can help the sales of phones. But in the future, consumers will be able to enjoy VR without being linked to smartphones. Google is developing a VR device that can do just that, industry sources said.
The VR market’s potential is almost limitless. “People think of only games and entertainment from VR but the scope of its application can be expanded to various areas, including communication, education and training,” said a Samsung executive.
“Before long, people will be able to communicate within VR by touching things and moving within it. In that case, we can make the most of it in education, such as simulation vocational training, health care (training doctors and explaining to patients), and construction.”
Digi-Capital, a company in the Silicon Valley, estimates the VR market will grow from $5 billion now to $120 billion in 2020. The VR device market will also expand from 14 million units this year to 38 million after four years.
All the global IT giants are vying to take the market lead with massive investments.
Apple has started marketing View Master, a VR headset compatible with the iPhone. Facebook plans to sell “Lift,” a VR device for personal computers, in 20 countries, starting in March. Google, which introduced Google Cardboard made of corrugated paper in 2014 and sold more than 5 million units, will put to market a similar device made of plastic. Sony plans to release “Play Station VR,” a VR gaming device, within the first half of this year.