Why Virtual Reality Will Be Bigger Than Smartphones

Every so often, a new technology comes along and captures everyone’s imagination. Venture capitalists get out their checkbooks and analysts make enormous market projections. Next thing you know, the media’s calling it the next big thing or megatrend that’s going to make everything else obsolete.

Welcome to the virtual/augmented reality (VR/AR) craze. Funny thing is, we’ve been here before with VR. Lots of times. If I had to pick a technology that’s always about to become the next big thing but never delivers, VR would be it, hands down. And those would be real hands, not virtual ones, by the way.

Actually, the technology’s been around for a very long time, just not in mainstream use. Jaron Lanier’s VPL Research is credited with selling the first VR goggles and gloves for gaming and other limited applications back in the 80s. He works for Microsoft (NASDAQ:MSFT) now. Wonder what he’s working on there, HoloLens, perhaps?

Of course, VR has been portrayed in a laundry list of movies going back decades to The Lawnmower Man in 1992 and Disclosure a couple of years later. And while Minority Report came a decade later, it provided a window into a not-so-distant future where we’ll be able to interact with the virtual world as effortlessly as we interact with the real world today.

In terms of books, Sci-Fi author Neal Stephenson created a sort of virtual reality version of the Internet called the Metaverse – complete with avatars and everything – in the breakout book Snow Crash, c. 1992. And Philip Rosedale’s Linden Lab actually developed a 3D virtual world called Second Life around 2003.

In an interesting twist, Stephenson joined AR startup Magic Leap last December. Maybe that should tell you something. While virtual reality has been the next big thing for as far back as I can remember, this time, it’s different. Yes, I know we always say that, but this time, it’s true and I’ll tell you why.

We finally have the processing power, high-speed memory, miniaturization technology, and for some applications, network bandwidth to make virtual reality a reality. That’s the supply side of the equation; we’ll get to the demand side in a minute. First, let’s talk about the difference between VR and AR, at least in today’s ever-changing technology lexicon.

Virtual reality is when you’re fully immersed in and possibly interacting with an alternate 3D world, place or experience such as a video game, concert or movie, for example. Facebook’s Oculus Rift, Samsung’s Gear VR and Google’s Cardboard platform are examples of VR implementations, although, of the three, Cardboard is definitely the poor man’s version.

Augmented reality is when real or computer-generated 3D video or information is seamlessly overlaid onto your visual field. There are limitless applications for AR because it will essentially replace today’s displays. Instead of having to look at or touch a screen, you’ll be able to view and interact with video and information naturally, as an integrated component of your real world experience. At least that’s the theory.

HoloLens and Google Glass are both examples of AR. So is Magic Leap’s technology, but since the search giant led a $542 million investment in the Florida-based startup last year, the two technologies may actually come together in a future product.

Of course, no one really knows what Apple’s up to, but the secretive tech giant has some patents, has made an acquisition or two and is rumored to be hiring in the space. That said, Apple typically lets others mess around for a few years before delivering a category killing product, so I wouldn’t be surprised if its foray into the virtual domain is still a ways off.

In a 53-page report to investors, noted Piper Jaffray analyst Gene Munster called the combination of VR and AR the next technology megatrend, “the next evolution of computing,” and said “it has the potential to be as profound a technology platform as the smartphone today,” according to Barron’s Tiernan Ray.

The report also says, “Our optimism around the theme is based on consumers’ insatiable appetite for new tech experiences.” While I agree that’s true, I think the demand side of the equation is infinitely broader because virtual or augmented reality has the potential to make every computer and entertainment interface disappear.

Technology has enhanced our lives in countless ways, but when technology becomes so seamlessly integrated with our real-world experience that those enhancements become effortless to use, that’s the best of both worlds. When the man-machine interface becomes a human one, that will be the biggest technological game-changer in our lifetimes.