Next ICT Growth Engine
Samsung Electronics has set to strengthen its leadership in the virtual reality (VR) market, which is rapidly emerging as a growth engine in the global information and communications technology (ICT) market after smartphones.
Samsung Electronics has released the Gear VR and expanded the investment in content production from 2014, becoming the leader in the early VR market. However, the company has decided to strengthen its leadership in the market by expanding the investment in the overall ecosystem as global leading companies, including Apple, are seeking to take over its top position.
At the Wednesday meeting of Samsung Group affiliate presidents on Feb. 17, Samsung executives talked about the VR industry. Koo Yun-mo, the senior vice president of Samsung Electronics’ mobile communications division, gave a presentation on the VR market outlook in the future and plans to apply it in other industries. After that, Samsung executives tried out VR devices and experienced 3D images.
Earlier, Samsung Electronics vice chairman Lee Jae-yong said, “VR has a growth potential that can substitutes smartphones. The company should dominate the market in advance by focusing on developing not only devices but also contents.” Accordingly, Samsung Group is expected to expand VR technologies by combining various areas, such as medical care and education, in other affiliates as well as Samsung Electronics.
Currently, Samsung Electronics has continuously launched an upgraded version of the Gear VR, a VR headset which allows consumers to enjoy VR games and videos, dominating the VR hardware market. In particular, the company released the consumer edition of the Gear VR, which is less than half the price, at the end of last year, seeking popularization in earnest.
In order to take the initiative in the VR market in the future, Samsung Electronics will establish the ecosystem from A to Z. Koo said, “Creating the ecosystem is vital to be successful in the VR market. We will set to create the ecosystem that range from technology for camera shooting, platforms that can make the best use of the videos and devices that allows consumers to enjoy quality contents.”
As part of the strategy, Samsung Electronics will unveil a 360 degree VR camera, which is designed to produce contents, as well as the Gear VR at the Mobile World Congress (MWC) 2016 for the first time. In addition, the company has been focusing on the VR ecosystem creation by securing web browsers, the VR content platform.
In a bid to provide quality contents, it will strengthen cooperation with its partner companies in other industries. Samsung Venture Investment Corporation, the venture capital arm of the Samsung Group, has recently invested US$25 million (30 billion won) in WEVR, a U.S.-based venture company that develops platforms to play VR videos. At the end of last year, the company also invested US$60 million (7.2 billion won) in VR startup Baobab Studio.
The reason why Samsung is so interested in the VR market is that it is considered a new promising industry at the moment when the company lacked its growth engine after smartphones. Other global leading firms are also scrambling to tap into the market. Digital Capital, a U.K.-based investment bank, forecasted that the global VR market will grow by more than 30 times from US$5 billion (6 trillion won) this year to US$150 billion (180.7 trillion won) in 2020.
Google has created a VR business division this year in order to enter the market in earnest. Moreover, it will release an additional VR device, not low-end cardboards. Apple is also showing much interest in the VR market. Recently, Apple CEO Tim Cook said, “VR has a lot of values in practice,” and hired Doug Bowman, a researcher and professor at Virginia Tech who specializes in virtual and augmented reality.