Google and Lenovo Chase Facebook in the Standalone VR Market

Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google and Lenovo (NASDAQOTH: LNVGY) recently launched the Lenovo Mirage Solo, a $400 stand-alone headset that runs Google's Daydream VR platform. They also launched the Lenovo Mirage camera, a $300 point-and-click camera for capturing 180-degree VR content.

The Mirage Solo is the second stand-alone VR headset to be launched this month after Facebook's (NASDAQ: FB) Oculus Go. These two headsets might initially seem similar, but they're actually quite different.

Who is the Mirage Solo designed for?

At $400, the Mirage Solo costs the same as an Oculus Rift with Touch controllers. However, the Rift also needs to be tethered to a decent gaming PC, which costs at least $500 to $1,000. The Rift also needs to be synchronized to external sensors.

The Mirage Solo targets consumers who want a better VR experience than what's found on phone-based headsets, but don't want to be tethered to a gaming PC. However, the Mirage Solo's Snapdragon 835 SoC, 4GB of RAM, 64GB of storage, and 5.5" LCD screen are all components that can be found in flagship phones from last year. The device also only lasts up to three hours on a single charge.

The big difference between the Mirage Solo and smartphone-based headsets is the addition of WorldSense tracking, which uses two front-facing cameras and rotational sensors to track a user's real world movements. This enables users to move around VR environments without the need for external sensors or cameras. Other controls are handled by the classic Daydream controller.

The Mirage Solo has access to over 350 VR games, apps, and experiences on the Daydream platform. Users who also buy the Mirage camera can capture VR content, which can be viewed on the Solo.

How is the Mirage Solo different from the Oculus Go?

The Oculus Go costs just $200, making it a more budget-friendly choice than the Mirage Solo. However, the device also has less impressive specs. It sports a Snapdragon 821 SoC, a 5.5" LCD screen, 4GB of RAM, and 32GB of storage. The 64GB version costs $250, and both versions last up to 2.5 hours on a single charge.

Unlike the Mirage Solo, the Oculus Go lacks onboard cameras. However, it uses motion sensors to track a user's movements, which also eliminates the need for external sensors. The Oculus Go can access over 1,000 games, apps, and experiences on Oculus Home, which gives it a much bigger VR library than Google Daydream.

Facebook also partnered with Chinese tech giant Xiaomi earlier this year to produce a Xiaomi-branded Oculus Go called the Mi VR Standalone headset. But instead of accessing Oculus Home, the Mi VR Standalone links to the Mi VR Store for Chinese users.

Will mainstream consumers buy either headset?

Mobile headsets like Samsung's Gear VR and Google's Daydream outsold high-end VR headsets like the Oculus Rift and HTC's Vive by a wide margin last year, likely because they're cheaper and users have easy access to smartphones.

Research firm Canalys' latest numbers show that Gear VR and Daydream headset sales topped one million during the third quarter of 2017, while shipments of Sony's PlayStation VR, the Rift, and Vive remained far below half a million.

Analysts expect the market for stand-alone headsets to grow. IDC claims that stand-alone headsets will account for nearly half the entire AR/VR headset market by 2022, compared to just 14.1% of the market this year. The firm expects stand-alone headsets to account for 19.1% of the AR market in 2022, versus 29.8% of the VR market.

However, investors should take these forecasts with a grain of salt. Many analysts were initially bullish on the entire VR market after Facebook's takeover of Oculus in 2014, but dramatically reduced their forecasts when the Rift failed to gain momentum with mainstream users.

The key takeaway

The Mirage Solo and Oculus Go might mark baby steps in the right direction, but I think obvious issues -- like the short battery life, awkward appearance, and danger of running into things while roaming VR environments -- could limit their overall appeal for mainstream users.

Of these two devices, I think the Oculus Go's lower price tag and bigger content library should give it an edge against the Mirage Solo. However, I don't think either device will move the needle for Facebook or Google anytime soon.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool has a disclosure policy.