LG’s Humble VR Bundle

More Momentum for Virtual Reality

Is this the beginning of a new standard smartphone kit?

Yesterday, LG announced that it will offer a free virtual reality (VR) headset to purchasers of the company’s flagship G3 smartphone. The accessory, called VR for G3, is based on the Google Cardboard blueprint. It enables a smartphone to be repurposed as a VR headset, relying of the phone’s sensors and screen to create a virtual reality experience.

LG is lowering the cost barriers for consumers who are interested in the limited but growing amount of VR content available via channels like Google Play. RoboBliteration — a virtual reality game developed for Android — is included in the package.

LG’s bundle is challenging Samsung for a leadership position in virtual reality among smartphone makers. Samsung is promoting its Gear VR headset, an optional accessory for Samsung smartphones and based on a design by Facebook’s Oculus subsidiary.

The timing is right. It’s still early for content and hardware, but a growing number of film-makers and games studios are producing VR content (see Daily Insight: Virtual Reality Making the Rounds). A killer app has yet to emerge, but CCS Insight believes that 2015 will see key VR content that raises awareness among consumers. VR was a theme at CES 2015, and we expect it to be an important topic at Mobile World Congress early next month.

LG is setting a precedent by making a virtual reality headset a standard accessory for its top-of-the-line smartphone. The bill of materials is likely to be offset by the press the company has already received: the plastic headset may be enough to sway flagship fence-sitters to the G3.

It’s still too early to assess broad consumer sentiment toward virtual reality. We can point to the buzz and fizzle about 3D content throughout the years, but VR momentum is gaining and a number of services are introducing audiences to the experience. Google, for example, recently released a VR mode for its popular Google Maps, allowing Android smartphone users to take virtual street-level tours of cities. The company also has Android APIs to support VR app development.

Virtual reality could drive an upgrade cycle for smartphone manufacturers and content providers. The dust will continue to settle this year, but this is a key business development trend to look forward to.