1) Clearly define your chosen emerging industry in your own words highlighting the relevant products and/or services, the technologies, and the market segments.
Virtual Reality is a three-dimensional computer-generated simulation that lets people experience realistic scenarios in an immersive way that which can be compared to the real-life experience using technologies such as VR (virtual reality) headsets and different types of controllers, which are used in different industries such as the following: Entertainment, Health Care, Military, and gaming. AR (Augmented reality) can also be considered another type of VR as it integrates virtual data and information over a camera feed through tablets or smartphones. The products and services offered by these industries vary from each other but can also overlap at some point. The concept and technologies used on the other hand are extremely similar to each other and only vary a little. For the Entertainment industry, with the use or VR Consoles, they offer a 360-degree experience in movies, sporting events, amusement parks and even TV shows. The Health Care industry, on the contrary, offers surgery training, anxiety disorder treatments, pain management and other health services. Under the Military industry, it focuses on the serious use of VR such as combat training, space training, flight and vehicular application, and medical training. Gaming industry obviously offers games that can be played through game consoles on the VR sets, PC, or smartphones and tablets through the integration of AR in them.
2) Prove your chosen industry is emerging by showing and interpreting evidence, e.g. growth in patents, customers/users, jobs, government investment, private investment, number of firms, sales, price of supplier inputs, production output, employees, etc.
over time – from near the beginning of the industry to the present.In figure 1, from 2016 to 2018 we see the market grow double every year with pc and consoles leading the way due to their high demand. In the succeeding years, pc and consoles just take off because of the boom in the gaming, healthcare, and military industry. Majority of the dominance comes from the gaming industry which overlaps between the console and pc market. Contrary to the mobile market forecast, I personally think that mobile market is also going to be huge because just in 2016 alone almost 10 million mobile device VR sets were sold. Figure 2 shows us the spike in the number of documents published by the top 5 companies who are working with VR and AR technology. These rise in numbers happened due to several reasons such as the following:• Magic Leap’s release of a video of AR integration which was shot directly through their technology in October of 2015.
• VR Investment acceleration in 2015 due to the acquisition of Oculus by Facebook and Google’s investment in Magic Leap in 2014.• Microsoft’s demonstration of its HoloLens AR platform technology.• Introduction of tracked hand controllers by Sony, Oculus, and StreamVR which became a standard.• Google’s shipment of roughly 5 million cardboard VR in 2015 to raise awareness of the technology and giving people taste of it.
• The positive response from the market for the consumer mobile VR. Figure 3 shows that over the course of 7 years, VR/AR startups globally have received over $4 billion in investments from venture capitalists. There was a significant jump in 2014 due to Facebook’s acquisition of Oculus and Magic Leap receiving funding from both Google and Alibaba. Due to these huge acquisitions and funding from big-name companies, there was a rise in investments for the following years in both the old and startup companies.
In 2010 there was a rise in patent filing due to Samsung’s breakthrough with OLED technology which they presented at Consumer Electronics Show (CES). 2014 saw a spike in the number of patents due to companies such as Google, Facebook, Sony, and Samsung announcing their investment in the virtual reality sets and the technology behind it. Four of the biggest patent assignees are Samsung, Microsoft, Sony, and Qualcomm. Figure 5 # of Active and New Investors in VRFigure 5 shows that a total of 229 investors have made transactions related to VR and 170 of those were new investors. A huge growth in new investors was seen in 2014 which can be explained by all the transactions and announcements made by huge companies such as: Oculus’ acquisition by Facebook for $2 billion, Sony’s Project Morpheus, Google’s Google Cardboard, Samsung’s Gear VR, and not to mention Google’s $500 million investment in magic leap that year. According to Digi-Capital’s report, 2016 was the biggest year for AR/VR setting a record high of $2.3 billion in investments.
?3) Develop an industry structure map for your chosen emerging industry and describe how your industry structure affects competition, innovation, and emergence. Figure 6 AR/VR Industry Structure ? ? CompetitionThe industry structure of VR is fascinating because hardware wise it keeps on intertwining with all the other industries such as Military, Healthcare, Entertainment, and Gaming. So, the real competition lies on the software side of the industry which is surprisingly still being dominated by old companies to date but slowly being shaken up by fresh innovation from the startup companies.? InnovationMajority of the innovation in entertainment and gaming are coming from the collaborative innovation of established and startup companies. The healthcare and military industries on the other hand have started to feel the benefits of funding received by startup companies that specifically focus on these market segments.
? EmergenceBased on the 7 elements of industry emergence which helps us determine the position of the industry in its emergence state, VR/AR industry having 5 of its elements under the validation stage and 2 in the diffusion state is clearly showing signs of fast emergence.