The year is 2004. The Boston Red Sox won the World Series for the first time since 2018, we just found out water once existed on Mars, and we are all begging our parents to buy us the new Motorola Razr.
We are 3 years from the first release of the iPhone and about 185 million people have mobile phones (smartphone and non) in the US, or just over a half the population at the time. The earliest data on smartphones I could find wasn't available until 2009, but we can assume adoption was minimal at this point.
Source: Statista. *Data is estimated based on historical growth.
The Razr had a good run. We all mastered T9 word so we could text back and forth with our friends under the table in school. Over 4 years Motorola sold 130 million units at an expensive $499 price point for the time, making it one of the best-selling phones to date. The second version of the phone even had a partnership with Apple which allowed them to build iTunes in to the interface and hold 100 songs. Then the iPhone hit the markets in 2007, and the Razr slowly died out of favor.
The Oculus virtual reality app was the most popular app in Apple's App Store this past Christmas. As much as the VR headset was the fancy gadget that topped many holiday gift lists this year, the technology is still far from being mainstream. A quick take from a recent NY Times article put it best: "…while the graphics were impressive, the overall experience felt more gimmicky than transformative. Watching “Teenage Mutant Ninja Turtles” in 3-D for a few minutes is fun, but it’s harder to imagine enjoying a 90-minute movie with a bulky, battery-heated headset strapped to your head."
Source: Statista.
Research estimates have VR headsets at a total installed base of between 16 and 34 million. Facebook released the Quest 2 in October of 2020, selling for $299, $100 less than the company's initial Oculus Rift priced in 2019 for $400. The Oculus is far below the penetration rate required to truly reach mainstream adoption, but growing quickly. Much like the Razr, the tech is early, flashy, bringing attention to the market, and a few years away from the eventual solution that will appeal to everyday users. Facebook, the leader in this market, is focused on getting VR headsets into the hands of as many people as possible as CEO Mark Zuckerberg explained on a recent earnings call. "…if we reach the point where there are hundreds of millions or billions of people using these devices, I just think that, that's going to be an extraordinary opportunity for us."
My bet is that we are a few years away from VR technology that will take off much like the first smartphones. I look forward to investing in all of the software that gets built on top of it.