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Why VR will drive the next wave of change

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Virtual reality is set to start moving into the mainstream of the technology market this year creating the next wave of growth for the industry, says ERNST WITTMANN, Regional Manager for Southern Africa at Alcatel.

Smartphone manufacturers rather than games console makers or VR specialists hold the key to mainstream consumer acceptance of VR devices. Smartphone manufacturers will unlock affordable VR for the average consumer. In much the same way as smartphones have put an affordable camera, GPS and powerful computer in our pockets, they will give most of us our first taste of VR.

According to market researcher IDC, shipments of augmented reality and VR hardware will grow sharply to 9.6 million units this year and to 110 million units by 2020. The VR category has been relatively small until now, but the technology is maturing. We’re starting to see excitement for its potential from businesses and consumers alike.

Premium VR devices will represent most VR revenue in the next few years but only a small portion of the shipments, according to numbers from Strategy Analytics. The research firm projects that more affordable smartphone-powered devices will account for some 87% of VR devices shipped this year.

This makes sense since the premium devices are aimed at an early adopter audience, primarily the gamer, that doesn’t mind spending at least $500 on a new gadget. Smartphone manufacturers will offer a lower entry price and tie their VR offerings to a device that their customers already own.

VR is a computer-generated simulation of a three-dimensional image or environment, presented to the user on a screen housed in a helmet or a pair of goggles. The user feels as if he or she is present in a three-dimensional space, able to interact with the virtual world through equipment such as a glove fitted with sensors.

The initial application for VR is creating immersive videogames, where the user feels as he or she really is sitting in the cockpit of a race car, navigating a dungeon filled with monsters, or trying to survive a night in a haunted house. But there are endless other business and entertainment applications for VR as well.

For example, some hospitals already use VR to simulate surgery after getting a 3D image of the brain using an MRI scan. Training applications are also becoming more sophisticated, offering risk-free ways to help people to practice or learn skills as diverse as surgery, flying an airplane, or surviving in a combat zone.

Art students or tourists could wander simulations of the world’s great art galleries without leaving home, offering new experiences to people who cannot travel for financial or health reasons. And films and televised sports events could be made more immersive by making you feel like you’re in a theatre or a stadium rather than your lounge.

For many people, VR still sounds like a fanciful idea. But as smartphones become more powerful and the VR display technologies become cheaper and more mature, VR will become a fixture in our lives.

Many analysts believe that VR is in its growth cycle today where smartphones were in 2007 – so we can expect to see VR really take off by 2020. The technology has great potential to enrich our lives, create new ways to learn, offer exciting entertainment options, and deliver powerful new experiences.

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Half of SA mobile phone users avoid data activity

Research shows 87% of South Africans have cellphones, but 50% have data issues and a quarter struggle to find a place to charge them

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A Pew Research Center survey of 11 nations has found South Africans second most likely to avoid doing things on their cellphones because of fears of data charges. The 50% of users who report this fear is second only to Lebanon, where 66% avoid data use.

As ownership of mobile phones, especially smartphones, spreads rapidly across the globe, there are still notable numbers of people in emerging economies who do not own – or even use someone else’s – mobile phone, a Pew Research Center survey of 11 nations finds. However, in this department South Africa scores well, with only 13% not having phones – in line with a median of 6% of adults in the countries polled do not use mobile phones at all, and a median of 7% do not own phones but instead borrow them from others. 

These mobile divides between have and have-nots are most pronounced in Venezuela, where about a third of adults (32%) do not own or use mobile phones, India (30%) and the Philippines (27%).

At the same time, the new findings show that mobile divides also exist among those who own phones. A median of 46% in these countries say they frequently or occasionally have difficulties getting reliable phone connections, 37% say it can be a challenge to pay for their phones and 33% report finding places to charge their phones is a problem at least occasionally. In addition, a median of 42% report frequently or occasionally avoiding some activities on their phones because they use too much data. 

In some countries, mobile owners’ challenges are particularly striking. In Lebanon, for example, 77% of phone owners report having problems getting reliable mobile connections, and about two-thirds (66%) say they avoid doing things with their phones because those activities use too much data. In Jordan, nearly half (48%) report having trouble paying for their phone, while in Tunisia four-in-ten (40%) say it can be a challenge to find places to recharge their phones. 

“The spread of mobile phones brings a variety of benefits to users in emerging economies, and they can clearly spell out what appeals to them about the arrival of a phone in their lives,” says Laura Silver, senior researcher at Pew Research Center. “Still, our survey shows that these devices bring new challenges and headaches to users at the same time they open up new divisions in their societies. It turns out that digital divides take several forms in these countries.” 

Beyond those concerns, there are other issues that can disrupt life for some phone users and sharers. Around three-quarters or more of mobile phone owners in every country except India report concerns about identity theft, and around nine-in-ten or more in Mexico (95%), Colombia (94%), Tunisia (90%), South Africa (89%) and the Philippines (89%) say they are at least somewhat concerned about the issue. 

For mobile sharers, concerns about device security can also play a role in why people choose not to own their own devices. While cost is the primary reason mobile phone sharers give for why they do not personally have a phone (a median of 34% across eight countries reports this), the second most commonly cited reason is that a previous mobile phone was lost, broken or stolen. 

Additionally, a median of 29% of mobile owners in these 11 emerging economies report they have frequently or occasionally experienced problems finding information online in their preferred language. This problem ranges from 17% of mobile owners in Jordan to 37% in South Africa – the highest of all countries surveyed.

Other key findings from the survey include: 

Nonuse tends to be more common among adults with lower levels of income and education. In the Philippines, for instance, 10% of respondents with more education say they do not use a phone, compared with 38% of those with lower levels of education. This pattern exists in all 11 countries surveyed. Similarly, across most of the nations, older people are more likely than younger people to be non-users. 

Non-users are divided over whether they would like to own a mobile phone in the future. Venezuelan non-users stand out for their keen interest in acquiring a mobile phone; 86% of mobile phone non-users in Venezuela say they would like to get a phone in the future. Elsewhere, these numbers vary markedly, from around half or more desiring a mobile phone in South Africa (65%), Colombia (61%) and Tunisia (52%), to fewer than half in Mexico (41%), the Philippines (35%), India (31%) and Lebanon (9%). 

In some countries, issues of technological literacy are particularly pronounced. For example, around a quarter of Indians (26%) say the primary reason they share a phone is because it is too complicated to use, followed by Mexicans (11%) and Filipinos (10%). 

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MUST you buy into Black Friday? The pros and cons

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Black Friday, once only a North American marketing frenzy, has become a critical entry in the calendars of South African retail business owners.

Research published by Stats SA says that historically, the most important month of the year for retail trade is December, when many consumers are on holiday and go Christmas shopping. But December 2018 was a tough month for retail in South Africa with the volume of sales falling by 1,4% year-on-year.

The poor performance of retailers in December followed a fruitful November, when Black Friday boosted sales to 2,9% year-on-year.

Dov Girnun, CEO of Merchant Capital, an innovative fintech funder that provides working capital to retail SME’s across the country, says Black Friday presents a moment in time in the sales cycle, and business owners still need to consider whether the concept will make sense for their business’s growth.

“Small business growth is a delicate balance between doing what works and taking advantage of the right opportunities. Retail business owners should carefully weigh up the pros and cons before being swept away by the Black Friday wave,” says Girnun.

Girnun outlines the following pro’s and con’s that retailers should consider before jumping on the Black Friday bandwagon.

Shopper enthusiasm

Pro: Savvy customers look forward to a good bargain. They actually plan their year-end spending around this one retail event. They believe that they will enjoy savings and great deals which will often prompt larger spending and additional ‘treats’ for themselves.

Con: There was a time when festive season shopping mainly occurred in December. Black Friday has changed this. What was normally a very good festive season trade, can now mean rapidly reduced December turnover. Retailers need to work this new spending habit into their projections and stock flow.

Significant noise

Pro: If you can deliver agile marketing messaging and have a tactical social and email marketing campaign behind you, you may well be able to fight the clutter and up your sales in a meaningful way. 

Girnun says: “In our experience, small businesses use the funds we lend them for anything that will be additive to the growth of their business: to hire more employees; buy new equipment; refurbish their store; buy more stock – and even for marketing – they don’t necessarily have to be elaborate plans, but each funding step is crucial to the next.” 

Con: As a small business you are up against the big guys: large retailers with huge marketing campaigns behind them. Certain larger retailers will even offer loss-leaders to draw in customers.

Shed old stock for small business growth

Pro: Small business growth is often the difference between sitting with old stock or shedding your load. Black Friday is a great way to encourage take-up of old redundant inventory. Making way for the new.

Con: On this day, over any other, customers are price-sensitive. They expect a good deal otherwise will gladly shop elsewhere. Heavy discounts might be the only way to win that sale over your competitor. But this is often a discount that isn’t worth the sale.

Scaling up for traffic

Pro: Black Friday is a marketing vehicle to assist in scaling up your customer traffic. It is a unique opportunity to attract new customers and satisfy existing ones. Just make sure that your store has the capability to restock quickly and check customers out efficiently.

Con: Sub-par in-store or online service can have a negative knock-on effect on your brand. So make sure you employ more staff and security on the day and upgrade your online systems so that they can carry an abnormal load should it arise.

Realising retailers’ eleventh-hour cash needs and taking the rapid evolution of technology into account, funders like Merchant Capital have the capability of assessing and approving a loan in just 24 – 48 hours, offering retailers an opportunity to scale up if need be at lower risk.

What are your competitors doing?

Pro: If your competitors are in the space, this may mean it’s good for your vertical. Simply being there may be a good way to claim your stake in some way.

Con: If you aren’t in the game, you can almost guarantee it will be a bad sales day. But FOMO alone (Fear Of Missing Out), is a dangerous hill to climb. So think clearly and make decisions that are right for your business!

Girnun says: “The jury is out as to whether Black Friday makes sense for all small businesses. But what is very clear is that retailers need to think long and hard about capacity, strategy, bottom-line, and long-term impact before committing to partake in Black Friday.”

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