The $30M Apple-VRvana Acquisition Deal – What You Need To Know

By | January 11, 2018
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The reports from Bloomberg, Catcher Technology and Quanta are all pointing in the same direction: Apple Inc is ‘secretly’ preparing a powerful new ‘headset-like gadget’, powered by augmented reality. Going by updates from the Nikkei Asian Review, the Apple AR glasses will have a 100% transparent system, and will be running on the breakthrough ‘reality operating system’ (rOS). Incidentally, the Cupertino company ventured into the AR space for the first time in 2017, with the ARKit platform for developers (launched with iOS 11).

The foray of Apple Inc into the field of AR is not much of a surprise though. For starters, the company has been looking for a worthy flagship product to follow up the iPhone (iPad’s fortunes are not looking up) – and CEO Tim Cook is also a big fan of the technology. In November, Apple splurged $30 million for the acquisition of VRvana (the maker of the unreleased Totem mixed-reality headset) – another thinly-veiled hint of the company’s planned investments on AR (the actual deal probably happened a couple of months earlier). Over here, we will take a look at some interesting points from the Apple-VRvana acquisition deal:  

  1. Size of the market

    In 2016, the value of the global augmented reality market was a little over $2 billion. By the end of 2021, this value is expected to swell to $83 billion – with the market growing at a CAGR of >55%. Combined together, the value of the AR/VR industry will be more than $108 billion – with mobile AR being the fastest-growing segment over here. The total earnings from the VR/AR are expected to double in each of the next 3-4 years, soaring to $214 billion by 2021. The immense growth and revenue potential of the AR technology is certainly not lost on Apple. The company wishes to have a strong presence in the market – and the takeover of VRvana is the latest endeavour in that context.

  2. Relative lack of competition

    Apple is not going to be first-mover in the AR space – but the absence of excessive direct competition is going to be a big advantage. The much-maligned Google Glass flopped hard in 2015 – and the current Glass EE (enterprise edition) is primarily targeted towards workers in factories. Microsoft Hololens has managed to get good reviews – but it is not a consumer product per se, and a dedicated ‘consumer edition’ is not expected to arrive till 2019. In such a scenario, if Apple moves (and moves fast) to launch cutting-edge AR glasses, that would make a lot of sense.

Note: Apple CEO Tim Cook has reiterated that the company was not unduly concerned about releasing AR tools before others (‘don’t give a rat’s about being first’). The focus, instead, is on making the best AR gadget in the market.

      3. More about VRvana

Will all the buzz on Apple’s ‘secret AR project’, curiosity is building about the VRvana company. The latter is a Montreal-based mixed reality startup – helmed by CEO Bertrand Nepveu (Marc-Olivier Lepage is the COO and co-founder). The company was founded way back in 2005, and was initially known as True Player Gear, Inc. Interestingly, the only product showcased on the official website of VRvana is the Totem headset. It remains to be seen how the technical expertise of VRvana is utilized by those up top at Apple.

     4. The unreleased Totem headset

VRvana’s Totem mixed reality headset has received a lot of praise from those who managed to check it out first-hand (the headset was never shipped). The product delivers immersive and highly engaging ‘extended reality’ experience to wearers – combining the best elements from both VR and AR technologies. At last year’s Consumer Electronics Show (CES 2017), Totem received the ‘best in mixed-reality category’ award – with professionals referring to it as the ‘most impressive product’ showcased at the event. The headset, however, never got beyond the crowdfunding stage – and was never released.

      5. The USPs of Totem

Totem has several interesting features, which make it a more powerful headset than similar products launched by Microsoft and Windows. For starters, the OLED screen (1440p) of the Totem headset has the ability to display truly opaque images – creating a distinctive environment for viewers. The graphics are rendered by pass-through cameras, and true-colour animations can be seamlessly displayed. Users can easily swing back and forth between virtual reality and augmented reality experiences with Totem. Unlike HoloLens, there are minimal lags in the VRvana product, and the latter’s camera-based operations are a cut-above the former’s projection-based functionality. Apple is reportedly keen on making its own AR headset – and Totem can easily serve as a handy point of reference for Jony Ive and his team.

Note: Inside-out positional tracking and hand tracking also feature among the most important features of Totem.

      6. Apple’s acquisition of VRvana is a first (and also, it isn’t)

Metaio, a German AR startup, was snapped up by Apple in the first half of 2015. The New York-based Flyby Media – a ‘spatial perception’ company – was acquired in early-2016. Other notable AR-related acquisitions by the Cupertino tech giant include Faceshift (November 2015), Emotient (January 2016) and SMI (June 2017). It is pretty apparent that Apple has been interested in AR tech for a fairly long time. Even so, the $30 million acquisition of VRvana is unique in the history of Apple – since this marks the first time the company has purchased a startup that is into making head-mounted displays (HMDs). ARKit on iOS 11 is a success – and Apple has plans to build further in this sector.

       7. Important for maintaining Apple’s position as a tech leader

The launch of the much-hyped Apple HomePod has been delayed, and it is not expected to arrive before another six weeks or so. That, in turn, is going to make it more difficult for the HomePod to fight it out with Google Home and Amazon Alexa – both of which are fairly popular. In essence, Apple is already late to the game in the personal voice assistant domain. The series of AR-related acquisitions indicate that Apple does not want to be a late-entrant in the augmented reality/mixed reality space as well. Over the years, the company has emerged as an undisputed consumer technology leader (iPhone revolutionized communications; iPad changed the face of music-listening). Staying a step ahead of competitors (qualitatively) is going to be crucial for Apple.

      8. Moving towards a stiff deadline

According to experts from the tech field, Apple is set to launch a new AR-powered headset/HMD in 2019, with a public rollout expected to happen the following year. Given that the HMD will have its own customized display, a new chip will have to be created (and tested), and it will run on the new ‘reality operating system’ (rOS). There is a lot of work to be done – and completing it all and coming out with top-notch AR glasses with high-end features by 2020 is not going to be easy. With acquisitions like VRvana, Apple is getting the talent and expertise ready on hand for the ‘big AR challenge’.

Note: One thing looks fairly certain: Apple is not going to simply rebrand Totem and release it this year.

       9. Focus on improving the quality of AR

There is considerable speculation on a future where we might find augmented reality being used as a product itself – instead of the technology being used as a feature in other devices. Tim Cook himself is a big fan of AR – but he has also expressed concern over the quality of the currently existing AR headsets (the way in which the HMDs have to be put on also has to be looked into). Totem resolves the lag-related problems in most other headsets – with its latency being as low as ~3 milliseconds. It has been pointed out, correctly, that the currently available AR products fall short of delivering optimal experience to users – and Apple is making an attempt to plug that gap.

Note: While the Totem headset handles latency very well, its considerable bulk remains a minus point. It is certainly not something an average user would like to keep on for hours at a stretch.

      10. Will there be a new headset?

Topsy Labs, a promising analytics company, was acquired by Apple in December 2013. About two years later, it was officially announced that Topsy is going to shut up shop. There are several other instances of the Cupertino company taking over small startups to gain access to the talent and expertise – and shelve the acquired company’s product(s), or shut it down altogether. Although Apple does seem seriously invested in AR, there remains the outside chance of VRvana being acquired for similar motives. If that is indeed the case, new Apple AR glasses might not be in the offing anytime soon.

Note: More than $200 million was forked out by Apple, for acquiring Siri Technologies in 2010. There was a waiting period of around a year, before Siri finally debuted on the iOS 5 platform.

      11. Official confirmations

There have been none forthcoming (about this acquisition) from either Apple or VRvana. However, reliable sources (like Techcrunch) has reported the deal – and also, Apple generally mentions ‘series of acquisitions’ instead of coming out with dedicated news on a single acquisition. Another tell-tale sign of the acquisition deal going through is the fact that there have been no updates posted on the social pages of VRvana after August 2017 (the VRvana website is still active though). Most of the employees of VRvana have also shifted to California, to work for Apple.

      12. Diversification is the name of the game

With AR, Apple is probably looking for a new gadget that would have as big an impact as the launch of the first-generation iPhone back in 2007. In general too, the company has been constantly striving to diversify its field of operations – with recent acquisitions covering various advanced tech fields, like machine learning, security, processor power, cloud services, GPS/location services, and more. The takeover of VRvana is yet another proof that Apple wants to make AR one of its key business focus areas in future.

Note: In November 2013, Apple acquired PrimeSense, a 3D sensor company from Israel. The breakthrough Face ID feature of iPhone X has been created from that company’s technology.

The Apple AR glasses, as and when they are launched, are going to be pricey devices. Their prices can vary anywhere between $130 and $1300, depending on the precise configurations of the headsets. CEO Tim Cook has referred to AR as ‘profound’, Craig Federighi had touted ARKit as the ‘largest AR platform in the world’ – and the Cupertino company is clearly keen to make a mark in this field.

 

 

Hussain Fakhruddin
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Hussain Fakhruddin

Hussain Fakhruddin is the founder/CEO of Teknowledge mobile apps company. He heads a large team of app developers, and has overseen the creation of nearly 600 applications. Apart from app development, his interests include reading, traveling and online blogging.
Hussain Fakhruddin
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