Last week Apple (AAPL) held its latest product unveiling event that revealed primarily incremental improvements for its latest iterations of Apple Watch and iPad. But it wasn’t the only company event that introduced a new consumer wearable.
Facebook (FB) also held its annual Oculus Connect VR conference that was not only rebranded to Facebook Connect, but in keeping with the pandemic, it was a virtual event. Interestingly enough, Facebook didn’t frame the event as a “virtual reality” event but rather a showcase for its Facebook Reality Labs that, per the company, creates “category-defining consumer hardware and software that are immersive, social, and increase the depth of people’s connections.” At the core of it, Facebook sees augmented reality (AR) and virtual reality (VR) changing “everything about how we work, play, and connect.” To the everyday person, this could mean something as disruptive and game-changing as the PC and the smartphone.
What was announced at Facebook Connect?
During the online event, Facebook announced its follow-up to the Oculus Quest – the Oculus Quest 2 and pardon us if we roll our eyes over the lack of originality in the naming convention, particularly following Apple’s Apple Watch 6 debut last week. The new Oculus headset is cheaper, lighter, and smaller than the prior model and contains a processor that’s twice as powerful, a higher resolution display, and more random access memory (RAM). In a somewhat surprising move, the new display shifts to fast switch liquid crystal display (LCD) technology from organic light-emitting diodes (OLED), which could be a factor in the new model’s cheaper price point but is a move in the opposite direction of many other products.
Like many new devices, the rate of adoption hinges on content. We the authors at Tematica are firm believers that content is king, with consumers driven to not only adopt new devices and services because of the content but also shifting between existing offerings for the specific content they want to consume. We’ve seen this behavior with gaming consoles to streaming video services. Helping to shore up its Oculus content, Facebook announced Ubisoft Entertainment is working on “new, made-for-VR” versions of the popular Assassin’s Creed and Splinter Cell games.
Project Aria
Following that revelation, Facebook’s Chairman and CEO Mark Zuckerberg announced the company would launch “the next step on the road to augmented reality glasses” in 2021. While Project Aria is a multi-year process, the company will begin next year by bringing to market a pair of smart glasses that won’t have a functional heads-up display. While details were limited, Zuckerberg shared that Facebook will team with luxury eyewear company Luxottica Group (LUXTY), and the new consumer device will have Ray-Ban branding.
We’d note that Facebook is not only concerned with a stylish look and feel for these forthcoming smart glasses but sound quality as well, as evidenced by its comments on spatial audio. In early September, Facebook chief scientist Michael Abrash shared details about “perceptual superpowers” in which an AR system figure out what you’re trying to hear, then amplifies it while damping background noise. “Combined with spatial audio features, the device creates the aural equivalent of a hologram overlay in a pair of glasses.” We suspect we will be hearing much more about “perceptual superpowers” as Project Aria moves past its initial phase.
Out of the gate, many have noted that Facebook’s initial pair of smart glasses will more closely resemble Snap’s (SNAP) Spectacles than Google’s (GOOGL) Google Glass — but again, content is king. During the event, Facebook showed theoretical uses for its AR glasses that included getting an overlay of street directions, music recommendations in a record store, or even visual alert showing you where your lost keys went. Longer-term, Facebook wants to build wearable AR glasses that will integrate with its own software.
Virtual events and Spotify
In the current pandemic world, we’ve had to alter how we work, visit with family and friends, and change many of our normal behaviors. Some businesses, notably the restaurant industry, were forced to pivot their business model while new movie releases and live concert events have been pushed back. In the latest issue of Rolling Stone, Bruce Springsteen shares that normally he would be preparing for a world tour in support of his forthcoming album Letter to You that would start in the coming spring but in his view it could be more like 2022 and “I would consider the concert industry lucky if it happens then.”
We mention this for two reasons. First, we at Tematica are all big fans of the Boss’s music and his “empty the tank” live performance work ethic, and second, the long-term promise of virtual reality headsets and 5G mobile networks could be the answer to not only the current industry struggles but other live events ranging from conferences to sporting events. As we mentioned above, Facebook sees the technology changing “everything about how we work, play, and connect.”
Are we there yet?
Not by half, but there are what we call thematic signals to be had.
Already Spotify (SPOT) has added virtual event listings in its app, which allows music fans to see when their favorite artists will be playing live, if only by a livestream. We’ve seen most major ticketing services shift their focus to online and virtual events in the wake of the pandemic, while music artists have been doing live streams or in some cases paid live-streamed concerts. While we can’t speak for everyone, we suspect many a consumer would enjoy a fully immersive view when steaming video from one of those growing number of services.
Often times the killer app that fuels the adoption of a new technology isn’t the one that is widely predicted. In the case of virtual reality, it could be the promise of escape and entertainment as several technologies come together to open a world of possible experiences without ever leaving home.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.