A Tale Of Two Technologies: The Narrative And The Numbers For VR And Voice
In the tradition of effective storytelling, the technology industry’s romantic narrative often involves two basic troupes: a garage and a dream. This alluring chronology is so embedded in start-up folklore that it permeates the foundation myths of everyone from Apple to Google, and it actually pre-dates Silicon Valley. Comparable anecdotes are still applied to Henry Ford, amongst other entrepreneurs of the industrial revolution. Ultimately, what these narratives share, whether they start from Detroit or Northern California, is their power to spark a gold rush when compellingly delivered.
Take Virtual Reality. Whilst Zenimax’s lawsuit against Oculus and Facebook now threatens this veneer, VR’s renaissance may not have happened had the story of Palmer Luckey and Co.’s creation not widened the eyes of valley VCs and subsequently the wallets of Oculus’s founders. Rising to public consciousness from Luckey’s lab/parent’s house in Long Beach, CA, the Oculus Rift’s famed Kickstarter campaign brought VR back from the grave, where it had laid mostly dormant since a mid 90’s flirtation with HMDs (Head Mounted Displays) that saw the release of Nintendo’s Virtual Boy and Sony’s Glasstron to meagre sales. Mark Zuckerberg was impressed enough to have Facebook acquire Oculus for $3bn, kicking the industry into its latest wave. The impetus of Facebook’s mandate was so imbued with a sense of possibility, that Sony would quickly announce the Morpheus project that would eventually become the PSVR, followed by HTC’s premiere of the Vive in February 2015.
Meanwhile, a scenic drive up the West Coast in Seattle, Amazon was in the process of finalising its Echo project and its accompanying personal assistant, Alexa. Even though speech recognition in computers has a research history dating back to Bell Labs in the 30s, there was now wind in the tech’s sails following the integration of Siri onto the iPhone. Echo and Alexa, however, would elaborate on Apple’s Siri by becoming the first to implement this technology exclusively into the home.
Reflecting on narrative matters, because whilst VR and Voice are both pivot technologies representing different new paradigms to what consumers have experienced before, their public personas have been worlds apart. VR’s public image has been one of bombast and exclamation, yet the Echo arrived quietly, building its public profile by word of mouth and through Amazon’s established sales channels. 2016 was the year that these technologies finally saw their wider release (VR headsets were previously limited to developer kits and Echo exclusively in the US until September 2016), therefore it is interesting to map them against each other to see what the numbers have to say on what the overall public reaction has been thus far:
At 5.2m sales, 3.64m more Amazon Echos were shipped than the total number of mainstream VR headsets combined worldwide, despite the fact that it was only released outside of the US (to the UK and Germany) in the final 3 months of 2016. Additionally, although Playstation VR was released in October, it saw 750,000 sales into a total of PS4 ownership market (the requisite for PSVR use) of 50m, revealing an adoption rate of only 1.5%.
To give further context, the iPhone sold 3.7m in its first full year of release in 2007 – meaning Echo’s 5.2m has had a 40% higher growth rate for its first year than arguably the defining tech product of the last decade had in its initial release. That voice control quietly became the tech product of the year should also serve as an interesting case study for future adoption patterns. At a price of £149.99 RRP to that of the £549 Oculus Rift and the £759 for Vive, pricing is clearly an influence behind this, suggested by Sony’s higher sales at their £399.99 price point – as well as their ability to sell into a large existing user base.
It is far from the end for VR, as content investment is anticipated to rise in 2017 as hardware creators seek to embellish their ecosystem by doubling-down on the experiences required to justify their multi-billion hardware financing. However, the numbers at this point clearly suggest that voice control in the home, whilst sharing the same sceptical public as VR, has stolen a head start. With Echo consumers on average increasing their Amazon spend by 10%, how Jeff Bezos’ team now leverage this advantage in creating an ecosystem around the product, similar to Apple’s App Store, will prove a defining factor in the tech developments of 2017.