Does Apple Inc. Truly Face a Virtual Reality Risk?

Well-respected Seeking Alpha contributor Paulo Santos recently put forth the argument that by no later than the second quarter of its fiscal year 2016, Apple will start seeing year-over-year declines in iPhone unit sales.

He gives a number of risks Apple faces that he believes could drive this, but one, in particular, stood out to me: the "virtual reality risk."(You can read the full articlehere.)

Santos notes that the iPhone 6s features a display resolution of just 1334 x 750 -- low compared to displays found on other mobile flagships -- which will prove a disadvantage as the "virtual reality boom" happens.

Indeed, Santos rightly argues that in order for a smartphone to function well as a virtual reality display as part of a virtual reality headset (such as the Samsung Gear VR), it needs to feature a very high resolution in order to display a clear image in which individual pixels cannot be discerned.

Although I can see where Santos is coming from, I believe the "virtual reality risk" that Apple supposedly faces is more or less immaterial. Here's why.

Can a smartphone really deliver enough performance for a good VR experience?Perhaps the most well-known upcoming VR headset is the Oculus Rift. The device features two displays (one in each eye) running at a display resolution of 1080 x 1200 per eye, and each display is refreshed at a rate of 90 times per second.

In order to drive that many pixels and to be able to render content at 90 frames per second requires some very serious computing/graphics horsepower. Just how much, exactly?

Well, Oculus tells users that the minimum computing requirements for gaming on the Oculus Rift are as follows:

  • GeForce GTX 970/Radeon R9 290
  • Core i5-4590
  • At least 8 gigabytes of memory

This kind of horsepower is well above what one will be able to find in the world's best mobile devices, and I don't think people should expect to see this kind of power in a phone anytime soon.

What's even more interesting, though, is that these are minimum requirements. According to NVIDIA CEO Jen-Hsun Huang on the company's most recent earnings call, his "recommendation" for a VR-capable system would be the company's GeForce GTX 980 Ti (a roughly $650 stand-alone graphics card) as the "baseline."

I submit to the reader that it will be a very long time before smartphones are anything close to the virtual reality devices of choice simply due to the fact that they are, and will likely be for a long while yet, underpowered.

Even if some Android phones are "better" for VR, who really cares?There has been a lot of hype around virtual reality, and I do think it could catch on within the high-end PC gaming community, in particular.

At the same time, though, I think the suggestion that Apple may be poised to lose market share because the iPhone 6s doesn't have a display resolution high enough to deliver a good virtual reality experience isn't convincing.

Indeed, I will make the bold prediction that by the time VR capability is something that actually matters to smartphone buyers (which may be never, quite frankly), Apple will have increased the display resolutions on all of its iPhones significantly, rendering this entire "issue"moot.

The article Does Apple Inc. Truly Face a Virtual Reality Risk? originally appeared on

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool recommends Nvidia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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