Gear VR may thrill gamers, but value to Samsung and business is unclear

Samsung's announcement of the Galaxy Note 4, Galaxy Note Edge and the Gear VR virtual reality headset raised questions over whether the new devices can help correct the company's lackluster first half financials, which were partly blamed on slow Galaxy S 5 sales.

Samsung's announcement of the Galaxy Note 4, Galaxy Note Edge and especially the Gear VR virtual reality headset raised questions over whether the new devices can help correct the company's lackluster first half financials, which were partly blamed on slow Galaxy S 5 sales.

It's a tough prediction to make, analysts said. The main reason is that rival Apple could burst on the scene with a larger iPhone and a smartwatch at an event set for Tuesday, undercutting much of Samsung's impact in the market.

The new Gear VR announced Wednesday should excite the gaming community, while its more practical applications for business users are far off. The Gear VR came out of a year-long Samsung partnership with VR innovator Oculus VR.

The Gear VR headset is used along with the new Note 4 "phablet" smartphone. The 5.7-in. Note 4 fits inside the Gear VR to provide a 1440p Amoled display and all the processor power needed for a low-latency, mobile virtual reality experience. It is an "Innovator Edition" beta version, not a final consumer product. Pricing was not announced.

The Gear VR will come with a new Oculus Mobile developer tool, which will be the main ingredient in determining whether exciting or practical new apps will be built.

"With VR [in the commercial space], it is still early days, even though VR has been around for so long" for industrial and military applications, said Carolina Milanesi, chief of research at Kantar Worldpanel. "The apps are what makes the difference."

During its announcement, Samsung officials mentioned that airline pilots already train on expensive VR headsets, but there are also a range of healthcare apps that could come into play for a less expensive, consumer-grade device. These apps could include training tools for surgeons for delicate operations or industrial repairmen for complex assembly processes.

"I don't see Gear VR being big in enterprises in the short term, except perhaps in some highly specialized spaces," said Jack Gold, an analyst at J. Gold Associates. "VR glasses for enterprises will require more of a see-through ability, kind of like Google Glass does, than a blocked vision approach like Gear VR. It's unclear how many apps will be developed for the Android Note 4 phone that can be used with the 3D features of Gear VR."

Analysts also said new apps built with Samsung developer tools will be key to adoption of the new Note Edge, which has a curved screen that wraps  around the right edge of the display. From there, users can get quick access to alerts and frequently used apps, including the camera shutter, even when the case is closed.

"The success of Edge will depend on the apps," Milanesi said. "This will make a difference between gimmick and true enhanced user experience."

Gold said the Edge is really a "halo" product that "shows Samsung is thinking about design and trying to counter the upcoming announcement from Apple, which always tries to out-style the competition."

While Samsung presented its Note 4 as the most important of the three new devices it announced, analysts were unimpressed and questioned whether the device can dramatically improve Samsung revenues.

"The new Note 4 is an incremental improvement to the Note 3 with improved screen and processor and some tweaks to the S Pen," Gold said. "It will appeal to the phablet crowd, but is evolutionary, rather than revolutionary. Nevertheless, Samsung leads in the phablet category (smartphones with screens larger than 5.5-in.) and needs to to maintain its credentials there."

Gartner analyst Hugues de la Vergne said the Note 4 and Note Edge 4 show how all hardware vendors face challenges. "Just about all smartphone hardware features will be incremental improvements at this point," he said. "Such improvements will keep Samsung ahead of their Android competitors in mature markets like the U.S., but the real risk is a larger screen iPhone."

All the major U.S. carriers have said they expect to carry Samsung's new products in the fall, but pricing has not been announced.

Join the Computerworld newsletter!

Error: Please check your email address.

Tags galaxyAppleOculus VRconsumer electronicssmartphones

More about AppleGalaxyGartnerGoogleSamsung

CIO
ARN
Techworld
CMO