Following the consumer electronics industry at any distance, you will have undoubtedly been exposed to the concept of Virtual Reality (VR) as a hot new showcase technology for vendors. Interestingly, VR touches all of the product categories that I track as an analyst at gap intelligence, including cameras and camcorders on the 360-degree content creation front, and smartphones from a mobile consumption perspective. Imaging vendors are supporting the market with camera models capable of recording 360-degree footage, while it almost seemed like a requirement for smartphone vendors to launch a VR headset alongside their handsets in 2016. Facebook and YouTube now offer support for 360-degree footage, giving us familiar portals to share spherical content, and giving readers like you an opportunity to relive the adventure of a recent gap intelligence ski/snowboard day trip through the 360-degree video below!

Image Credit: youtube.com

Using a web browser, simply click your mouse to explore “around” as the footage plays. Try viewing on a mobile device too. Even without a VR headset, your smartphone is able to leverage its internal gyros to “look” around as you move the device through the air. Does this inspire you to go out and create some 360-content yourself?

VR the Next Hero for CE?

Virtual Reality (VR) is expected to be among the tech sector’s main divers for year-over-year growth in 2017, with the Consumer Technology Association (CTA) projecting that sales of VR headsets will reach 2.5 million units (up 79% on-year) and generate $660 million in revenue this year (up 43% on-year). To foster this momentum in the market, the CTA has even established an AR/VR Working Group, which presents a set of industry definitions to help both vendors and consumers understand the variety of experiences offered by this emerging category.

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Image Credit: bestbuy.com

While high-quality VR solutions are available in prosumer segments, it is undeniable that Samsung’s Gear VR headset has been critical to the rise in awareness around Virtual Reality and its mainstream applications. Samsung touted sales of over five million Gear VR headsets globally last year, which sounds like strong demand from consumers, but I am skeptical as to what the manufacturer considers “sales” as the majority of activity seen for this device was in the form of free offers bundled with Galaxy smartphone purchases. Samsung is not alone, as Google showcases its own smartphone-powered VR headset in national retail in the form of the Daydream for its Pixel line, and a number of low-end vendors are placing “universal” headsets in the channel to stoke the interest of budget-minded shoppers that want the experience.

360-degree Presence in Retail Growing

Placements of 360-degree shooting camcorders in retail have soared 633% compared to 2015, representing 18% of the action camcorders tracked by gap intelligence at the end of 2016. In December 2016, the segment was represented by 22 channel placements, compared to just 3 in late 2015.

Kodak a Trend-Setter Once Again

Kodak, historical film juggernaut, pioneer of the digital camera, and the first brand to integrate WiFi into a model, once again paves the way for the imaging industry with its early involvement in 360-degree capture. Yet sadly, its entrance into this market, much like several of the aforementioned innovations, would be a bit too soon as consumer awareness is just now being directed in the direction of 360-degree. In 2015, the 360-degree capture segment was occupied by Kodak and Ricoh, but only found at photo-specialty and regional electronics chains. By the end of 2016, 360-degree placements were held by 360fly, Monster Digital, Nikon, and Samsung, in addition to Kodak and Ricoh.

360fly is currently positioned as the dominant 360-degree brand with 54% of the retail shelf. 360fly was the first brand to gain traction in national retail with a display at Best Buy, which was enhanced by a secondary placement of its latest 4K-equipped model several months ago 360fly has now expanded into Target and Walmart with dual SKUs, giving the brand the most visible position in the 360-degree market. Ricoh chased 360fly into both Target and Best Buy with its Theta S last year, providing the vendor's first-ever model at the latter retailer. Nikon also flexes its marketing budget with a fixture containing its KeyMission 360 at Best Buy. Additionally, Samsung’s involvement in the 360-degree camcorder space is quite noteworthy as its first/only imaging product since completely exiting the camera market over a year ago. This expansion shows a growing awareness of 360-degree among consumers, and illustrates that retailers are reacting to stock in-demand technologies for shoppers. The growth is additionally attracting involvement from a wide array of brands ranging from crowdfunded start-ups to industry heavyweights such as GoPro.

Growing Fast, But Will It Be Big?

As for an idea of how big a market 360 and VR could be, the real challenge will be translating the technology to shoppers as more than just a gimmick, and allowing easy access to consumption. With all of the enthusiasm surrounding this emerging technology, vendors will have to be mindful as to not repeat the days of 3DTV hype... when all they were forcing were glasses, versus full-scale headsets on our faces. With an expansion of content availability (Facebook, YouTube), an uptick in quality (4K), and prosumer involvement from brands like GoPro, Lytro, and Samsung, the 360-degree segment has potential for solid growth, and is perhaps the innovation needed for both consumer and pro-level content creators to help invigorate the overall declining video hardware market.