Please ensure Javascript is enabled for purposes of website accessibility

Samsung's "Next Platform" Impresses Facebook's Mark Zuckerberg

By Jamal Carnette, CFA - Feb 27, 2016 at 8:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Looking for "the next big thing" in tech? Samsung says look no further.

Samsung's Oculus-powered Gear VR headset is available for free with Galaxy S7 and Galaxy S7 Edge preorders. Image source: Samsung.

As anticipated, Samsung (NASDAQOTH: SSNLF) released the newest iteration of its flagship Galaxy line of phones, the Galaxy S7 and Samsung S7 Edge, in the lead-up to Barcelona's Mobile World Congress. The new unit brings forth a few surprises from last year's predecessor. Samsung re-embraced the waterproof feature the company had in the Galaxy S5, but abandoned in the Galaxy S6. Additionally, the new Galaxy S7 brings back expandable memory by reintroducing the microSD slot the Galaxy S6 abandoned.

It's hard to classify any of these features as revolutionary to Samsung's prior offerings. For that ground-breaking feature, it seems Samsung is moving into virtual reality in a big way, even going as far as calling VR its "next platform." Helping sell Samsung's ambitious vision was Facebook's (META -0.76%) Mark Zuckerberg, who stated, "[t]ogether, this is by far the best mobile VR experience you can offer" when discussing the Galaxy S7's VR platform.

2016 may be the year of VR
It's starting to look like virtual reality will finally arrive in 2016. Samsung's Galaxy S7 and S7 Edge will come bundled with Samsung's Gear VR headset, but the South Korean conglomerate will not be the only company pushing VR devices. Zuckerberg's exuberance for a competitor's device initially seems odd, but makes sense because Samsung's $99 headset is powered by Facebook-owned Oculus VR. While Oculus has a VR headset of its own -- the high-end Oculus Rift, which retails for $599 -- it appears Zuckerberg is willing to encourage other entrants with the goal of speeding up consumer adoption.

Another entrant appears to be Alphabet. An earlier report from The Financial Times chronicled Mountain View's new moves in the space. The FT reports Alphabet will bring a durable, high-quality VR headset to market in addition to its low-cost Cardboard device. Perhaps the most important move is Alphabet is bringing VR functionality into the Android operating system versus relying on an app. This should encourage third-party developers currently not offering VR-enabled experiences to do so as the experiences become more commonplace.

Will Apple be forced to follow?
Apple
's never been concerned with first-mover advantage. Instead, Cupertino works on perfecting the user experience before releasing a product. But with Samsung, Alphabet, and Facebook working hard to control the VR experience, Apple could find itself late to shape the future of the nascent ecosystem. Apple has purchased multiple VR firms and has a secret team of "hundreds of people" to work on VR technology, but not bringing the functionality to the iPhone 7 in September would put Apple at risk of being nearly 1.5 years behind Samsung and nearly a year after Facebook's Oculus Rift.

There's a lot at stake: Market research firm TrendForce estimates the total VR market (hardware and software) will top $70 billion in 2020, an increase of nearly 80% annualized from 2016 estimates of $6.7 billion. If so, Samsung is correct that VR will become the next platform and investors should pay close attention to who's winning at shaping this new technology.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$160.03 (-0.76%) $-1.22
Apple Inc. Stock Quote
Apple Inc.
AAPL
$138.93 (1.62%) $2.21
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,174.75 (-0.21%) $-4.51
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,181.62 (-0.27%) $-5.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.