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  Tyler Suiters  0:11 

  Hey everybody, Tyler Suiters with the Consumer Technology Association. We are the owners and producers of CES, the most influential and largest tech event on the planet. We are here to help you get CES ready. The show runs January 8-11, 2019, in Las Vegas. And today we are focusing on an evolving category in the tech world, AR and VR, augmented reality and virtual reality. First a bit of a level-set and a thumbnail definition of each for you. VR is a digital recreation of real-life settings. So you put on those headsets and you are transported somewhere else. AR, augmented reality is laying virtual elements on to the real world. So you are in your place in time for the most part, but you're able to interact and engage with things that aren't necessarily on the planet, yet.

  In either event, they both have remarkable potential and applications game changers. Think about what this would do for healthcare, agriculture, manufacturing and business, education, retail as well. So what started to some degree as B2C is now very much moving into the B2B play. So today, we are talking with two global technology companies who are driving AR/VR technology, Samsung and HTC global giants. That's all coming up on this edition of CES Tech Talk.

   

  Tyler Suiters  1:47 

  With us now is Dan O'Brien. He is general manager of America's for HTC. Dan, thanks for joining us and talking all things tech today, specifically VR of course.

   

  Dan O'Brien  1:59 

  Oh, this is great. Thank you so much for having me. I really look forward to this

   

  Tyler Suiters  2:02 

  A long career in technology for you, especially on the hardware side. HTC, though, has been home to you for more than a decade now. And HTC is clearly a pioneer in VR headwear. Why did the company target VR as an area of your strategic focus?

   

  Dan O'Brien  2:21 

  You know, it's a great question. Thanks for asking. Really as a company, we've always thought about how people are going to engage and interact with digital content. We were so early on in the smartphone space. Where we were actually ODM, making smartphones for other companies. We really found that we were very early on with things, like the first Windows Mobile touch phone, the first Android phone, and things like that. So when we saw what was happening and what was coming into maturity of the XR world, things that are in augmented reality and virtual reality.

  We looked at all the problems that we could solve and augmented reality at the time was challenged with a lot of problems that we felt like we couldn't solve for the ecosystem of players that had to be involved to make it successful. Whereas virtual reality, we actually could solve real problems for content developers, for consumers, for channel partners and we felt like there's a real business here that we can actually get this product to market. And we can actually get people rolling on what they can do in virtual reality.

  We felt like there was a real tangible piece here that we can make everybody successful from developers, channel partners, content creators, hardware creators. We really felt like we could make a big difference there. Then we really feel like the vision of the future of how people will engage with digital content will be with virtual reality headsets and with augmented reality headsets. It really sets us up to be an early technology leader when it comes to the space.

   

  Tyler Suiters  4:11 

  Well, let's talk about that opportunity a little bit Dan, because you're in an interesting space that the launch of the original Vive was very much consumer focused. Now you're moving toward the Vive focus as a brand name.

  So HTC is really innovating across the b2c, but also the b2b spaces. How are you navigating these somewhat distinct audiences that seemed to be separate, at least in the use case scenarios?

   

  Dan O'Brien  4:41 

  Also a really great question. I think when you look at the early days of Vive, starting in 2016. Where we launched our original headset. It was very consumer focused. A lot of that was also driven by the fact that, who understood how to create content in VR, was game developers and they created these game experiences. They understood the software engines that you would use in order to create this type of content. It was a very consumer focused content creation and who would enjoy it. It was really developers, gamers, in this very early adoption audience. Which aligns very much to a high-end gamer or tech enthusiast.

   

  Dan O'Brien  5:26 

  Then we really started to think about, how do we move and teach other verticals and other professionals about how to create that kind of content. There was a very natural progression between this early adoption, gaming audience and content creators. And this later adoption, but also very innovative, well-funded B2B professional developer base that would start to learn how to create those types of experiences. So you've seen now where the market not just HTC, but the market is actually been driven a lot by innovative, early adopter consumer and now is being picked up by also that professional B2B space where they're starting to see a lot of savings, collaboration, efficiencies, training, in use cases. So what we have also seen though, is how we have pivoted our company. It's not just trying to approach just a B2B to C, or B2B category, but we've approached it from an entire ecosystem. We actually have four major divisions inside of the Vive business, which is very different from the smartphone business. We have our hardware and technology division. We have our platform, which is Vive port in content distribution. We also have a first party studio where we create our own applications, whether it's gaming or education or arts driven. And then we also have an accelerator with our Vive X where we invest in other companies and other solutions. So we have seen where we need to have an ecosystem to support the B2C community, which has been also supporting our B2B community as well. So it's been a great ride for us so far, and being able to address the needs and the problems for both of these different verticals and customers.
   

  Tyler Suiters  7:18 

  So let's focus on the consumer side for a bit. Dan that's really where VR came to the forefront. I think from a general awareness standpoint. I'm talking about a non tech audience really, but 2016 was a major launch year for consumer products and VR. Widespread introduction of hardware to consumers. It's hard to believe that was a little less than three years ago, but what do you see for 2019 after you've been through a cycle or two on that? And how the landscape has changed to some degree and lessons learned that you apply to what's ahead in the immediate future?

   

  Dan O'Brien  7:56 

  Sure well, when I look back in 2016, and where we are in 2019. We continue to see a very healthy velocity and the adoption of VR products by consumers and professionals. And this is really needed. This is needed for the industry, this is needed for the technology to continue to progress and move towards that early mass consumer.

   

  Dan O'Brien  8:24 

  We're also going to see consumers more widely adopt the technology this year, going into 2019. But not just on the hardware, but also through broader content applications delivered through new platforms. So you're going to start to see VR in 2019, become more commonplace not only in the home, but in your work environment. Maybe in schools. You're certainly going to see it in location-based experience like arcades. You're also going to see a lot more of your friends just having this and being able to use this technology. So I think from a consumer standpoint we have seen a great progression using all the way back to our original Vive, which is three years in the market at this point. To the introduction of all in one products or standalone products that don't require a PC. You're going to see the entrance of new products, new product price points, and a lot of content that will help us broaden that phase.

   

  Tyler Suiters  9:26 

  Okay so looking ahead to the immediate, immediate future Dan. CES 2019, talk about HTC's plans there to, engage not just the business professional audience and all the synergy that is involved with being at CES in the tech sector, but also the larger global audience that you reach of those who aren't the show that you can still reach through media and through messaging.

   

  Dan O'Brien  9:50 

  Sure, it's great, thank you. So we have a variety of announcements coming this year. Not just in hardware, but we're going to be really focused on driving leadership in the VR category. At CES 2019 we have a great theme for addressing what we call, life in VR. Which is really about expanding what we can do in VR, broaden the consumers and what they're empowered to do in VR. Which is going to help us close the gaps between what consumers are faced with VR, their understanding of it today and what they can really understand and appreciate about what they're going to be able to do with it in the future. So I think that's really exciting. It's great for end users, we're going to continue to be focused on being the best premium VR option for our consumers. We have a lot of really exciting announcements and we look forward to everybody listening in and for those that have the opportunity to be at the show to experience it there.

   

  Tyler Suiters  10:52 

  Alright, taking off the HTC hat for just a moment Dan. You are a CES veteran, right. How many shows will this be for you by 2019?

   

  Dan O'Brien  11:01 

  Oh geez. I'm aging myself a little bit but, probably 15=?

   

  Tyler Suiters  11:07 

  No, no, you're building your credibility. That's not age. That's seasoning.

   

  Dan O'Brien  11:10 

  Thank you.

   

  Tyler Suiters  11:11 

  Yeah. Well as a CES veteran, as a tech professional that's been with some major international tech innovators in your career? What are the non-VR categories, that categorize that as VR and AR innovations are you most excited about seeing it and discovering while you're at CES in Las Vegas?

   

  Dan O'Brien  11:31 

  In 2019, I think artificial intelligence is going to continue to drive so much of what we're going to see as the solution base. Whether you're in VR or whether you're in your social engagements. The artificial intelligence, the software behind it, how it's going to be impacting all segments and verticals is pretty powerful. I think blockchain and what that means for commerce and payments. How that's going to change and how that's going to bring us further innovations. Decentralizing payments is going to be very exciting. Then I think the really big piece of people are going to just to see a lot of information on this 5G technologies in 2019. How 5G is going to literally change so much about what we do in our day to day interactions with digital content. It's going to fundamentally change, the technologies that can take advantage of 5G are not necessarily smartphones and things like that. It's more interactive, higher-bandwidth requirement products. I think it's going to be really exciting how consumer electronics is going to be able to take advantage of all three of these technologies and the types of products we're going to see in the future.

   

  Tyler Suiters  12:57 

  So you're really bringing it back to VR? In terms of the use cases that you and HTC envision in the years ahead. You're going to need 5G as an innovation platform to deliver all the content and the interactivity you need. For all of these innovations you envision to come to life and come to life accurately and effectively right?

   

  Dan O'Brien  13:23 

  I do. Selfishly, I want to bring it all back to myself and the technologies that we're working on.

   

  Dan O'Brien  13:38 

  Yeah. And you just made the case for getting to as many areas of CES 2019 as possible. So I appreciate you taking care of some of my job as well, along the way. It's great multitasking.

   

  Dan O'Brien  14:39 

  Thank you. No, I appreciate it. I think there's a lot to be said for coming to the show. Being exposed to a variety of different tech and really trying to broaden your understanding of how this can apply to your everyday life and problems that you might be facing. And the solutions you want to solve for that market will really be receptive too because, there's billion-dollar companies and ideas that are going to suffer from the XR technologies. Artificial intelligence, blockchain and 5G. Combine these worlds and you've got the future in hand.

   

  Tyler Suiters  15:15 

  Right, a lot of the horizontal elements. Absolutely. Well, Dan O'Brien is not only a CES veteran and budding spokesperson for us here at CTA. He is a general manager of HTC, Americas and Dan appreciate your time and expertise. Really looking forward to seeing you in Las Vegas sometime soon.

   

  Dan O'Brien  15:34 

  Great. Thank you for having me. Look forward to seeing you all there.

   

  Tyler Suiters  15:42 

  Yoon Lee is Senior Vice President of Content & Services and head of the Product Innovation team at Samsung. Yoon a pleasure to have you with us today to talk VR.

   

  Yoon Lee  15:53 

  Thank you for inviting me.

   

  Tyler Suiters  15:55 

  Very broad-based question to start. This is the world in which you live and breathe. What has you most excited right now about what you're doing in VR at Samsung?

   

  Yoon Lee  16:10 

  I think we gave birth to the mobile VR area, probably sometime in 2014 with the Note 4 (Samsung Galaxy Note 4). Since then it's been a very exciting journey. As you all know VR, then came along AR. Then we're all wrapping those two with other mixed realities. Internally we're calling it XR, because it's a reality. But what kind of reality is what we're going after. It could be virtual, it could be augmented, it could be mixed or it could be something else. So with that angle, we're very excited about the expansion. Also, it's actually following a very classical [inaudible] trend. There were a lot of new adoptions, heights and attention at the beginning. Then just like the innovation hype cycle, in certain sections, such as VR, in particular. We're dipping down a little bit in stabilizing and so that it's ready for the next second way of takeoff.

   

  Yoon Lee  17:34 

  Which is very typical of any area that didn't exist before. So we're witnessing that. And my prediction is that this will eventually come out of that dip cycle and that maybe 2019-2020, particularly with the proliferation of 5G. I think this will reach another level of experience for sure.

   

  Tyler Suiters  17:57 

  Well, that's an interesting point Yoon. The developments and implementation of 5G nationally here in the US and internationally for your market as well. How key is that connectivity to driving greater use, broader adoption of VR. Both in the consumer end and commercial spaces.

   

  Yoon Lee  18:19 

  So if you look at the first generation of VR, many were isolated experiences. So for example, the most popular one at the beginning was something like a roller coaster. Where you can have similar experience without visiting. Something like that wasn't really about connectivity, it was more about isolated experiences. Connectivity has become a very natural requirement in the VR space. Because when you are virtually there, you also want to virtually be at some point, like concerts or events that's happening around you now. But current technology, as it stands, is limiting.

   

  Yoon Lee  19:14 

  Wi Fi is limiting due to latency. Certainly the cellular network technology is limiting as well. So we see many desires, and even use cases. In certain cases, primitive level of implementations on being at a certain place without physically being there or being at an event without physically being there. But experiencing something simultaneously has been both an explicit and implicit need from consumers for a while, since VR took off. But technically, we weren't able to cater up to that expectation. And the 5g will finally give it some crack in the opening of that experience.

   

  Tyler Suiters  20:05 

  So as far as a market driver, Yoon and I've heard it described before that one of the challenges is that VR doesn't have its killer app yet. We don't know what will be the singular category or vertical for usage, entertainment, commerce, skills training, what's your early favorite? Or is it do you see advantage of all of the above and wait to see how it plays out?

   

  Yoon Lee  20:31 

  I think I think that's a bit of a generalization of VR. VR does have killer apps, it just doesn't have a killer experience. So it kind of goes back to my 5G notion. Killer app really is about killer use cases. There's so many exciting use cases in VR. Technically, it's still not there yet. The headsets are too clunky, the resolution is not good enough. We haven't figured out how to overcome the motion sickness. Plus, the connectivity piece is not there yet, to give some sort of a real time experience with others.

   

  Yoon Lee  21:18 

  One good use case for example, that I've been thinking for a long time is  like virtual seats at concerts. So, imagine that you go to a concert, even the best seats. Physical seat, right. Can be only occupied by one person and it's expensive, it's up for grabs. Even the best seats is below the stage, you don't get an opportunity to sit right next to a performer. Or even at an angle where it's the most interesting to you. You can't do that, you can't occupy a seat on the stage and not be distractive to other concert goers, right? All those problems will go away if you have a virtual seat on the stage, using a VR. Where thousands of people could double-quadruple book and have a vantage point where not even the best seat at that concert could give you. So that's a killer use case, that's a killer app. We just don't have the killer experience. So, we're very focused. We know what I think which area requires VR and AR.

   

  Yoon Lee  22:37 

  We are maturing the technology so that the experience is at a level where it feels second nature to them. It feels very convenient to them, that it has no friction between the experience and signing up.

   

  Tyler Suiters  22:55 

  So never heard that described that way before. It's fascinating in that, not only could everyone have a say courtside seat to the Golden State Warriors, you could have a bench seat or an on court seat.

   

  Yoon Lee  23:07 

  Absolutely.

   

  Tyler Suiters  23:08 

  In all those instances is that in your vision, a live shared experience? Or does it have to be at least for the foreseeable future? Record and immersive after the fact.

   

  Yoon Lee  23:22 

  I think live is the best; recording could be a consolation prize.

  Yoon Lee  23:30 

  But depending on the type of what you want to consume. Sometimes it's not interesting if it's not live. So for example, you don't wake up in the middle of the night to watch days of our lives. But you do wake up in the middle of the night, if there is a big sports event going on sports is the only thing that people are willing to wake up in the middle of the night and watch live. Even if it's the most immersive experience, the courtside experience that we can give to them. If it doesn't happen live, the excitement diminishes significantly. So there's an element to this being live or not being live. Very closely tied to what kind of content that you're going to be covering.

   

  Tyler Suiters  24:21 

  Does that put the premium on the manufacturer, on the equipment maker, the hardware itself on. And I want to phrase this the right way, more of the quality of experience, rather than the diversity of experience. In that it's less about the size, the fit and the adaptability of the VR hardware itself. It's more about how good that experience is, and how close you feel to being in that arena, in that stadium at that time.

   

  Yoon Lee  24:54 

  Yeah what we've experienced in the past, in the technology section is human imagination always comes first. Then it's quickly followed by a crude hardware implementation, because, software needs some sort of an outlet, right. Hardware is a conduit to experience, whatever you're imagining, through software. Then once you go through that cycle, then there's another imagination that comes out. Which typically requires better hardware, which typically requires the existing hardware. It's just too much for existing hardware and infrastructure to cater up to that experience. VR is in that stage right now. So again it's not a shortage of killer apps, it's a shortage of killer experience. Typically that killer experience is really lack of hardware experience, too heavy, too clunky, not enough resolution, not fast enough for sharing, virtually real time. Maybe even better processing power to make things more smooth. So I think we have no shortage in software imagination, but we do have a lot of catching up to do in the hardware space as well.

   

  Tyler Suiters  26:12 

  So Yoon where does AI fit into all of this both practically and experientially? I mean, this is the horizontal topic we see across CES of course, but across the tech sector more and more.

   

  Yoon Lee  26:26 

  Yes. So AI is really near and dear to my heart. Because I wrote a thesis in 1991, for my master's degree, in AI. When I was attending school at Michigan. It took a long time to implement AI at the real level.

   

  Yoon Lee  26:48 

  Again, human imagination and human theory was far more advanced than what hardware could really do in terms of processing. I think, right now we have enough data, we have enough processing power, we have enough imagination, we have everything kind of put in place to implement AI. What AI really is all about, is making things more contextual. Earlier I mentioned that we're moving from content centric, to context centric.

   

  Tyler Suiters  27:21 

  Right.

   

  Yoon Lee  27:21 

  I think this is a reflection of now AR is really coming into play. When it was content centric, we still had to press the button to activate based on your needs. So in other words, like content sharing from different screens. As you move from indoors to outdoors, you still had to activate that right. But if we truly get immersed into a more context centric world. Then AI, the artificial intelligence would know what your intentions are, and then it should be able to cater up to your intention. So from convenience, to the type of content that you prefer, to your type of consumption. I think all those three areas will benefit from AI. AI will make it a lot more convenient by removing friction, because it knows your preferences. AI will deliver the right content and setting because it knows again, you. Last but not least, you might have your unique way of consuming content or experiencing through VR and AR, to basically know you and cater up to that expectation. So I'm very excited because AI really certainly is no exception to the area of VR.

   

  Tyler Suiters  28:55 

  Yoon Lee knows where of he speaks on VR. He is the Senior Vice President of Content & Services and head of the Product Innovation team at Samsung. As well as being a CES veteran and Yoon we're looking forward to seeing you next month at CES 2019.

   

  Yoon Lee  29:12 

  Thank you. I look forward to seeing you guys as well.

   

  Tyler Suiters  29:15 

  All right, coming up next time on CES Tech Talk. At CES we have a remarkable place where you can establish a lead or search for a prototype and it's never been easier. The section is Design & Source. You can find a partner, expand your business goals, make a connection and we're talking about Design & Source with a global company. You'll know this name, that is relatively new to the fortune 500. Nonetheless, Alibaba is making waves.

   

  Tyler Suiters  29:46 

  We are here to help you get CES ready. So download the CES App, you can build your personal agenda, find your favorite exhibitors and speakers. Sync in real time across all your devices and new this year, connect your LinkedIn account to see which connections of yours are also at CES 2019. A reminder, the show is January 8-11 in Las Vegas. The information you need is at CES.tech. As always, none of this is possible without the real stars of this podcast: our engineer John Lindsey and our producer, Tina Anthony. You all are the best in the business. I'm Tyler Suiters, we're glad you're with us. Let's talk tech again soon.