This $99 Accessory May Be Samsung's Best Chance at Beating the iPhone

By Sam

The Gear VR. Photo: Samsung

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When it comes to innovating, Samsung has a mixed track record.At times, the company appears to act as a rather shameless copycat, rapidlyincorporatingfeatures from Apple's iPhones into its competing Galaxy handsets. But just as often, it works as a pioneer, pushing the limits of mobile technology, championing concepts like larger displays and curved screens.

And it may have just stumbled onto the next big thing.

The Gear VR, Samsung's latest accessory, transforms its flagship smartphones into virtual reality devices, giving owners of its phones experiences the iPhone -- and other Android-powered smartphones -- can't offer.

Sold out everywhereThe Gear VR made its retail debut late last month. But if you don't already have it, it's unlikely you'll be able to find one, at least not anytime soon. It's back-ordered at virtually every major electronics retailer. Samsung hasn't disclosed sales figures, so it's possible the shortfall could be due to an issue of inadequate production, but there's obviously a demand for the headset.

At $99, it's affordable, and it's garnered mostly positive reviews. CNet's Nate Ralph said he "love[s] it." Wired declared "good VR is here." The Verge's Ben Popper wrote that it left him "in awe." All of them agreed that, if you happen to own one of Samsung's latest phones, buying it was a "no-brainer."

Samsung doesn't have a monopoly on virtual reality -- indeed, the Gear VR was borne out of a partnership with Facebook's Oculus (which is developing its own headset, the Oculus Rift), but for consumers, the Gear VR is currently the best option. The only alternative, Google Cardboard, supports most Android phones and even Apple's iPhone, but lacks the dedicated app store, hardware, and control scheme of the Gear VR.

When it comes to virtual reality, the high-resolution AMOLED displays of Samsung's Galaxies give them an advantage over Apple's lower-resolution IPS panels, with less motion blur and sharper images. The Gear VR has an integrated sensor for better head tracking, and a dedicated touchpad for controlling games. The Oculus Store houses more than 100 apps, some of which are exclusive.

Keeping Tim Cook up at nightIn a conversation with Business Insider recently, analyst Gene Munster identified virtual reality as one of the major risks to Apple's business. Eventually, perhaps in 10 or 15 years, virtual reality headsets could displace smartphones as the dominant computing platform. Apple's iPhone -- which generates the bulk of its revenue -- could be threatened.

But even in the near term, the Gear VR has the potential to affect the smartphone market. In the past, consumers drawn to large-screen displays may have chosen Samsung's Galaxies over Apple's iPhone. The same could be true for the Gear VR, especially as the amount of content for the device grows. Other Android vendors could also face pressure, as Gear VR remains exclusive to Samsung's handsets.

2016: The year of virtual realityBut Samsung's advantage may be fleeting. 2016 is shaping up to be a big year for virtual reality, with a number of alternative headsets slated to make their debut. HTC, in partnership with PC gaming giant Valve, will launch the Vive next year. Facebook will begin selling the Oculus Rift, and Sony will introduce PlayStation VR. Those devices, not held back by the constraints of a smartphone, will likely offer experiences far greater than that offered by the Gear VR.

Still, Samsung's solution will have some advantages. Both the Vive and the Oculus Rift will require powerful (read: expensive) PCs to function, and PlayStation VR requires a PlayStation 4. Official retail prices have not been revealed, but all could cost upward of $300.

Virtual reality remains in its infancy, but Samsung is on the forefront. If it can keep evolving the Gear VR and adding content, it could give its mobile phones a powerful selling point.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple and Facebook. 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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