VR: A Harsh Reality When it Comes to Brand Power
Vendors have been jumping on the Virtual Reality (VR) bandwagon left, right, and centre in the hope it will develop quickly into the next big thing. PC and smartphone manufacturers alike have been suffering from saturated markets and sales that have either been stagnant for years or have reached a plateau. While some turned to wearables first, it became clear consumers were not ready to embrace smartwatches as quickly as some brands would have hoped and needed them to in order to change the direction of their profits. This is where VR comes in and early signs are encouraging.
There are many questions that still need to be answered. We set out to help answer some of those from testing US consumers’ understanding of VR in order to get a feel for what expectations they have on price and what their preferred use-case would be. As not all consumers are created equal, we set out to ask these questions to two distinct groups — one of early adopters and one of mainstream consumers.
One big question relates to brand and how some well established brands in the PC and mobile world will fair in this new segment. Will their brand power translate in the new VR world? A quick look at the data shows consumers respond to brand as you would expect: early adopters are mostly interested in more specialised brands while mainstream users are going for the brands they know. There are some surprises though!
We first asked:
“Which VR headset on the market or coming to market are you most considering or interested in buying?”
As to be expected, the Oculus Rift is the clear winner among early adopters. Microsoft’s HoloLens and Sony’s Morpheus follow from afar. What is interesting here is HTC, a popular brand in the smartphone market but with no heritage in virtual or augmented reality, is fairing well among early adopters. This is testament to the work HTC did in positioning Vive and the good reviews the device has had so far, especially around the most recent Consumer Electronic Show. When we move to mainstream, the king of smartphones, Samsung, is capturing the largest proportion of consideration/intention. Samsung was an early mover in the VR segment and this is paying off with consumers associating the brand with the technology as well as trusting the brand to bring to VR the skills and qualities they demonstrate in the smartphone market. In this respect, Samsung was smart in choosing to go with a solution, Gear VR, linked to its smartphones vs. a standalone headset. This move not only keeps the price lower in the eyes of the consumer – most consumers do not actually factor in the cost of the phone when looking at a Gear VR – but allows them to bundle Gear VR and phones both in stores and in consumer minds.
Google Cardboard transcends the gap between early adopters and mainstream thanks to a smartphone companion both very affordable and the first of its kind. It will certainly be interesting to see what Cardboard will develop into but, for now, we cannot underestimate the role Cardboard has played in socialising VR both among the masses and developers.
We were also interested to check with consumers to see whom consumers are waiting for. We asked a very specific question:
“Which of the following brands (not yet in the market) would you trust to deliver a VR product and experience you would be interested in buying?”
The overwhelming majority of both early adopters and mainstream consumers put their trust in the “it just works” brand, Apple. When it came to other brands, it is clear that convincing early adopters will be an almost impossible task. Mainstream consumers however, seem to trust names they might be associating with PC gaming, like HP and Dell. Motorola is the other brand mainstream consumers have highlighted, probably more out of their familiarity with the US smartphone manufacturer’s name.
While there are some signs, mainly talent acquisition, that Apple will be moving into VR at some point, your guess is as good as mine on timing and type of device. As Ben Bajarin suggested, it might well be that a VR headset will be Apple’s TV set of the future. Let’s see!