Category: Markets

The virtual reality (VR) market has been heating up, with dozens of major players and startups rolling out their versions of the original Oculus.

The clear winner is currently Meta Platforms Inc. (NASDAQ: META) with a reported 90% market share in the VR industry. This is in line with the company’s massive spending in the sector. Meta has spent over $100 billion on building out its VR and metaverse goals, which has yet to pay off, resulting in a roughly 70% decline in its stock price this year.

Despite Meta’s massive market share and willingness to spend absurd sums of money in the space, this hasn’t deterred others from trying to cut out a slice of the market. The runner-up is likely ByteDance Inc. — parent company of TikTok — with its Pico headset series, but Apple Inc. (NASDAQ: AAPL) is set to release a VR headset in 2023.

While many have failed to compete on the hardware side, others have found success on the gaming, marketplace and infrastructure side of things. Dozens of popular VR games like Beat Saber and Contractors have made millions with their fun takes on the VR genre.

VR is a brand new platform, which means startups have the ability to carve out viral popularity and become the next VR for Call of Duty. Further, startups like Gameflip have sold over $140 million of in-game and digital content and building out the next generation of gaming marketplaces. Gameflip is raising funds on StartEngine, which means anyone can invest!

While many are expecting Apple’s headset to be a massive player in the VR headset realm, it might end up dead on arrival. Not only will dethroning Meta be difficult for anyone — even Apple — there are also a number of other factors going into this. Mainly, while the VR market is expected to grow even if Apple manages to take a substantial portion of the current market, it wouldn’t be taking much.

Meta’s Quest Store has only sold about $1.5 billion in games and apps since 2019, resulting in under $500 million in revenue. For its VR headsets, that number is slightly better at 15 million headsets sold. At an average of about $500 per headset, that translates into roughly $7.5 billion in revenue. While these aren’t small numbers in the grand scheme of things, it took over $100 billion to get there. Given Meta’s market dominance and the relatively small size of the potential market share that Apple could take, it could spell disaster.

Apple’s VR headset is set to be priced between $2,000 and $2,500. This is over four times as much as Meta’s popular Quest 2 and double the price of its premium headset, the Quest Pro. While the headset is likely to have more features, the real problem will be the lack of infrastructure. There are PC VR options, but Meta has spent billions of dollars building out its VR apps, games, story and other infrastructure over the last several years. With Apple’s massive market share, it will be hard to attract developers to come to its platform to make games and apps. This ultimately creates a chicken-or-the-egg problem by which Apple needs developers to gain traction, but developers need Apple to gain traction before they will develop on the platform.

This isn’t the first time this has happened to a major player either. Most famously is the Microsoft Corp. (NASDAQ: MSFT) flop with the initial release of its Windows phone. This exact problem happened, and it cost them billions and took years to recover.

It’s anyone’s guess what will happen, but there might be a better and different play entirely. With new markets like this, it’s often easier for startups to take advantage of the lack of key players in certain niche areas of the market. With changes in recent law, anyone can invest in startups. Startups like Gameflip offer high-risk, high-reward startup investing options that, if successful, can carve out profitable niches in these emerging markets that scale to become bigger players as the market grows. Several other VR startups are raising funds on StartEngine, and StartEngine itself is also open for investment.

 

Source: finance.yahoo.com

VinFast is shipping 999 of its electric vehicles to California as the Vietnamese company looks for a place in the U.S. market.

The Vietnam-based electric vehicle maker is taking the slow boat to California as it sends its first batch of 999 VF 8s, the company’s 5-seater electric SUV, to America aboard the Silver Queen, a Panamanian charter ship.

The Silver Queen is expected to arrive in the Golden State about 20 days after departing from MPC Port in Haiphong, Vietnam.

The company, which held a ceremony to mark the occasion on Nov. 25., said the first VinFast customers in the US can expect their cars by the end of December.

“The export of the first 999 VF 8s is a significant event for VinFast and Vingroup and a proud historical milestone for the Vietnamese automotive industry,” Nguyen Viet Quang, vice chairman and CEO of Vingroup, said in a statement. “It affirms that Vietnam has successfully produced high-quality standards electric vehicles that are ready to compete in the international market.”

The news of the shipment follows the company’s Nov. 17 announcement at the Los Angeles Auto Show, where VinFast said it had received an order from Autonomy, the nation’s largest electric vehicle subscription company, for more than 2,500 VF 8 and VF 9 vehicles.

Established in 2017, VinFast is part of the VinGroup conglomerate, which was founded by Pham Nhat Vuong, Vietnam’s first billionaire.

“The VinGroup has a lot of resources and they are investing those resources to enter the American and European markets,” said Tung Bui, information technology management professor with the University of Hawaii at Manoa’s Shidler College of Business.

Filling the Void

Bui said it was too early to tell how VinFast will fare in the U.S., “but they have followed the marketing strategy of Hyundai when it entered the U.S. market in 1986:”

“There is currently a void for affordable luxury EVs and VinFast is trying to fill this void with an entry point of $45,000,” he said. “They also have an aggressive second-to-none warranty service: 10 years or 200,000 whatever comes first. This is a strong signal of quality.”

Bui said that the company’s timing is good, since battery technologies are getting better and cheaper.

“In the domestic market, VinFast is rolling out a line of electric motorcycles,” he said. “Vietnam is still recovering from Covid, the economy has nicely return to full production, and they are benefiting from the US-China trade war, with many factory relocating from China or developing in Vietnam.”

Vietnam’s economic recovery accelerated over the last six months on the back of resilient manufacturing and a robust rebound in services, according to a World Bank study.

The report said the recovery is facing such risks as growth slowdown or stagflation in main export markets, further commodity price shocks, continued disruption of global supply chains, or the emergence of new COVID-19 variants.

VinFast said in July that it had received a $1.2 billion incentive package from the State of North Carolina for its electric vehicle manufacturing facility at the Triangle Innovation Point in Chatham County.

The facility will cover 2,000 acres, with sections for electric cars and buses production and assembly, and ancillary industries for suppliers. The factory is designed to reach the capacity of 150,000 vehicles per year.

Closer to Customers

“While VinFast has a production facility in Haiphong they believe the investment in the NC plant positions them to compete more effectively in the U.S. against Tesla and other EV manufacturers,” said Michael Goldberg, a professor with the Weatherhead School of Management at Case Western Reserve University. “It reminds me a bit of Honda’s decision to open a production facility in Ohio in 1982 to get closer to customers here.”

Goldberg said “it will be a challenge for VinFast to control costs in the US as opposed to manufacturing in Vietnam but they think it is a risk worth taking.”

“Like many conglomerates in Asia, VinGroup is involved in quite a few businesses and have deep pockets,” he said. “So VinFast is not a thinly capitalized startup in the EV space. They can count on support through VinGroup as they go through their capital intensive market launch in the U.S.”

In September, VinFast Chief Financial Officer David Mansfield said the company is looking to conduct its U.S. initial public offering sometime in 2023, according to Bloomberg, which would make VinFast one of the first Vietnamese companies to be traded on an American market.

Ivan Small, associate professor of anthropology and international studies at Central Connecticut State University, wrote last year that many auto companies “ranging from Peugeot to Isuzu have entered and subsequently exited the US auto market,” and startups have an even harder time.

Growing a Global Presence

VinFast’s “investment in the American market demonstrates the company’s commitment to succeed by growing a global presence,” Small said in an article posted by the ISEAS–Yusof Ishak Institute, a research institution under the scope of the Ministry of Education in Singapore.

“By focusing on electrical vehicle sales in America, VinFast sees an opportunity to leap frog into a transition market where industry leaders are no longer necessarily established original equipment manufacturers,” he added.

Small said Vinfast sees competition with companies like Tesla (TSLA) – Get Free Report as well as many others, such as Amazon (AMZN) – Get Free Report backed Rivian (RIVN) – Get Free Report,, “that are banking that they can attract new customers based on experimental innovation and competitive price points.”

“New technologies often attract younger buyers willing to try brands that are not yet established,” he added.

Small said that “rather than focusing on access to next door China, the world’s largest auto market, Vingroup has turned to the second largest, yet ‘original, global auto market – the United States, to establish international brand recognition.”

He cited several likely reasons for this strategy, including ongoing Vietnam-China political tensions, “the historical complications for foreign automotive companies depending on Chinese joint venture partners, and the Chinese government’s sensitivity to green vehicle competition, a key industrial development sector that has received strategic support from Beijing.”

Source: finance.yahoo.com