What will be the next “iPhone moment” in the tech industry? What will be the next product that will promise to change the world and consumers will wait in line to buy?
The consensus seems to be that the next big thing is some form of virtual reality. Apple is all-but-certain to reveal a mixed reality headset, maybe as soon as this year. Microsoft has invested heavily in their HoloLens product. And Facebook is betting the whole company on VR, going so far as to change the company name to “Meta.”
For reasons I list below, virtual reality will not be a hit with consumers. But just because it’s not a hit with consumers doesn’t mean you won’t have to use it in the future.
Why the iPhone was a hit
On January 11, 2007 on The Colbert Report, Stephen Colbert awarded Apple, Inc a “much-feared double Wag of the Finger” for the iPhone.
“The phrase is he who dies with the most toys wins, not he who dies with the most integrated multi-platform toy. Apple, split these things back up, or you can count me out as a customer until you send me an iPhone for free.”
This is really the best way to sum up the zeitgeist around the iPhone. Nobody could stop talking about how the device Steve Jobs pulled out of his pocket could do anything, and everyone wanted one.
Before the iPhone, people had a lot of devices. Most people carried around a cell phone for calls and an iPod for music and video. Many, not most, but many would also carry around a company-issued BlackBerry for work calls and email in addition to their Motorola RAZR or LG ENV. Garmin GPSs were installed in cars. Plus, people carried a wallet and keychain too.
The iPhone was a hit because it unified everything with a circuit board into one device. Within five years, the iPhone and Android phones reached total domination of not just the phone market, but the digital device market. iPhones completely swallowed Apple’s iPod business. BlackBerry was driven to oblivion because consumers preferred touch screens. Nobody bought GPSs anymore, everyone just put their iPhone on a windshield mount. Apple is now partnering with state governments to add driver’s licenses to Apple Wallet. In iOS 15, Apple also introduced support for smart locks in Apple Wallet. By the 2030s or 2040s, most people will probably just carry a phone around and nothing else. No keys, no wallet.
People don’t like to carry around things. The more things you carry around, the more likely you are to forget or lose something. Especially if it’s an expensive electronic device. So it’s going to be a hard sell to convince people to carry a pair of VR goggles around with them.
Is VR a hit?
Facebook’s first consumer VR headset, the Oculus Rift, hit the market in March 2016. We are six years into this product. How’s it going?
Facebook does not release unit sales for Oculus (now the “Meta Quest”), but market research suggests they sold 8.7 million units in 2021. We should note the price per unit for the Quest is $299, affordable for most consumers.
For comparison, Apple sold 11.6 million iPhones in 2008. This was the first full year for the iPhone, with the original model selling for $399 in the first half and the iPhone 3G selling for $199 in the second, giving us the same average price as the Quest.
Again: 2021 was Quest’s fourth full year, and it has not yet caught up to where the iPhone was in its first. Consumers don’t seem to have any urgency to use VR like they did the iPhone. We should also remember it was nearly illegal to go outside in 2020 and the first half of 2021. If there was a year for VR to go mainstream, 2020 was it.
As time goes on, the adoption rates of new technologies tend to get faster. Television was adopted faster than the radio. Computers were adopted faster than television. The Internet was adopted faster than computers, and smart phones were adopted faster than the Internet.
If virtual reality really is the next big thing, it will be a break from this trend. As of now, virtual reality has penetrated just 18% of the US population. Again, we are six years since the first mass-market VR headset shipped, and American consumers have more purchasing power than they did in 2000 or 1980. Why hasn’t there been a rush into VR yet?
The answer is simple: because nobody wants it. Perhaps this will change if VR ever gets a “killer app.” Personal computing did not become popular for business until spreadsheets, and did not become popular for the home until the Internet came around. But virtual reality, like 3D TV, is a technology in search of a customer.
Why you might have to use it anyway
On CBS This Morning, Mark Zuckerberg gave Gayle King an exciting demo of Facebook’s virtual reality for business. Now, you too can put on a pair of uncomfortable VR goggles and really feel like you’re in an office!
Zuckerberg demonstrates writing on a whiteboard. The hand-tracking technology is impressive. But this reminds me of something Steve Jobs said about the millions Microsoft sunk into tablet handwriting-recognition tech in the early 2000s: everyone can type faster than they write, why would you handwriting on a device with a keyboard?
In virtual reality, the only limits are your imagination. Facebook could have chosen to demo an office at the bottom of the ocean or in that conference room on the Enterprise. Instead, they believed that a virtual office park in Northern California would be appealing.
Gayle King was thrilled about Zuckerberg’s demo, unlike anyone in the real world. The truth is, a virtual office park is appealing… to Zuckerberg.
For corporate executives and middle management, remote work removes status markers that come with seniority, namely private offices and the ability to monitor people in person. Human beings desire social status, and are keen to defend it. And remote work is a threat to it. If you can’t bring workers back to the office, just bring the office back to them with virtual reality.
Therefore, since Corporate America is not a democracy, expect there to be pushes for adopting VR when the tech matures.
Personal opinion
Maurice Sendak’s opinion on ebooks is roughly the same as mine on virtual reality for business:
Normally, I try to write dispassionate, level-headed articles backed up by data and research. I hope the first 75% of this article comes off that way.
However, I also have to say that virtual reality cannot be the future. I’ve found that the devices are uncomfortable on my face, and although they don’t give me motion sickness, they give it to others. Productivity would be decreased since it’s harder to multitask in VR. And finally, there’s just something dystopian about having to wear a screen on your head.
Therefore, if you share these beliefs, you must join me in refusing to work for any company that will experiment with making virtual reality part of the workforce. There are exceptions: virtual reality will be very useful for medical students practicing surgery, or for soldiers training for missions. But for most people, it will only make them less happy and less productive.
Epilogue: “Jesus Wept!”
In the Community episode “Lawnmower Maintenance and Postnatal Care,” Dean Pelton (Jim Rash) becomes addicted to a virtual reality operating system from the 1990s. He’s amazed at how he can select the time zone by throwing a beam of energy at “MST.” It takes him several seconds to do this.
Jeff Winger (Joel McHale) recruits Elroy Patashnik, the inventor of the system (played by the great Keith David), to pull the Dean out of the system. Dean Pelton’s addiction is broken once Elroy shows him that he can manage “worlds within worlds” even faster with a mouse-and-keyboard desktop file system.
I remember trying one of these VR things ~1997 and thinking 'that's nice but useless'. I see not much has changed then.
Good informative article and good points!