© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 1

The Importance of Mobile as a Foundation for Virtual

RealityEric Abbruzzese

Senior Analyst

June 2016

AWE 2016

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 2

Serve as a Litmus Test

Empower Other TechnologyDrive Experiences Raise Accessibility

Build on a Solid FoundationMobile VR as a Foundation for the Overall VR Market

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 3

Mobile Virtual RealityPros and Cons Dictate Target Markets

Low upfront costs

Large initial audience

High accessibility

Less capable tracking

Simple content

Limited input options

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 4

Smartphones at the CoreSmartphone-powered applications trading functionality for accessibility

Lower Cost

Greater Accessibility

More UsersBetter Content

Wider Footprint

Users and Content are Key

Facets of Mobile VR

Enterprise Not a Focus, But a Parallel

Segue to better VR Devices/Content

Just Another App?

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 5

Google Cardboard

Beginning of a Revolution

• Google I/O 2014• Curiosity and

confusion• Inexpensive• Accessibility and

affordability

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 6

Creating an Ecosystem

Hardware and Software

• Nascent but growing • Quick uptake

encouraged• Developer exposure • Varying content

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 7

Games 360° Video Marketing

Education High-end Entertainment

Virtual Reality ContentGames, Videos, and More

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 8

360° Video

The Killer App?

• 360° video is growing as quickly as VR

• Cardboard camera for UGC

• Spectrum coverage:– Price– Use Cases– Quality

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 9

Click icon to add picture

Total VR Hardware Installed BaseBy Device Type (w/ Cardboard Breakout)World Market, Forecast: 2014 to 2021

2014 2015 2016 2017 2018 2019 2020 20210

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

VR Mobile (Other)

Google Cardboard

VR Tether

VR Standalone

Inst

alle

d B

ase

(000

s)

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 10

Click icon to add picture

Mobile VR Device Shipments by VerticalWorld Market, Forecast: 2014 to 2021

2014 2015 2016 2017 2018 2019 2020 20210

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

OtherTourismHigh-end EntertainmentRetail, Commerce, and MarketingMedia & EntertainmentEnterpriseGamingEducation

Shi

pmen

ts (0

00s)

© 2016 ABI Research • www.abiresearch.comThe material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. 11

Thank you

www.abiresearch.comEric Abbruzzese

@ABI_Abbruzzese

abbruzzese@abiresearch.com