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Your smartphone may soon be a virtual theater

SAN FRANCISCO, CA - MAY 19: iPhone covers are displayed during a press preview of the new flagship Apple Store on May 19, 2016 in San Francisco, California. Apple is preparing to open its newest flagship store in San Francisco's Union Square on Saturday May 21. The new store features new design elements as well as community programs including the "genius grove" where where customers can get support under a canopy of local trees and "the plaza" a public space that will be open 24 hour a day. Visitors will enter the store through 42-foot tall sliding glass doors.   Justin Sullivan/Getty Images/AFP


Google’s annual developers’ conference, known as the I/O, has now become what Apple’s events have ceased to be: A window into the near future of consumer tech. This year’s event revealed two important bets Google is making for the post-smartphone era.
The short version of Google’s (for the sake of convenience I will keep calling it that rather than Alphabet, as the holding company is now known) vision appears to be as follows. The phone will upgrade to a universal mobile device with virtual reality capability. It will have all the basic communication functions, but wearable or home-based devices, untethered from phones and equipped with better voice recognition software, will gradually take over.

Virtual Reality
It’s a compelling scenario. The smartphone is too big for things like messaging, casual navigation and fitness tracking. When it makes sense to use one — say, when you feel uncomfortable speaking your messages out loud, or if you’re reading this column rather than a short email or text message — the capabilities, such as a keyboard and a web browser, will still be there. We will, however, gradually learn to use the device that we now know as the phone as an immersive entertainment and communication gadget: to watch multidimensional movies, play games that perfectly imitate reality, talk to friends across distances as if they’re in the room with us. VR versions of apps like YouTube already exist, and it’s possible that in a few years, such versions will be the ones most people will use.
To that end, Google gave the Android operating system, which runs on 80 percent of the world’s smartphones, a major makeover. Dave Burke, Google’s vice president of engineering, provided a very general technical overview of the changes, but only one of these is truly meaningful for users: Latency — or the time between the user’s eyes moving and the image reacting — is below 20 milliseconds on the latest Android version, called N (it hasn’t been named for a sweet delight yet). That’s as good as the reaction speed on more high-end VR devices such as Facebook-owned Oculus Rift, which will only work with a powerful computer. Unlike Google’s previous cheap version of VR, delivered with the help of an intentionally rough-looking cardboard box for a phone-holding headset, VR in Android N will be uncompromisingly immersive.
I have a beta version of N on my phone, a Huawei-made Nexus 6P, which is the only model sold today that’s capable of delivering VR to the new standard. Sometime in the fall, Google promises more phones from eight manufacturers, as well as better headsets to put the phones in.
Apple, which is still reaping almost all the profits from the global smartphone market, appears to be readying a VR device for market, too, and it’s likely that the iPhone will be that device. The Cupertino, California, company has been hiring people experienced with VR and enhanced reality technologies, suggesting an interest in Microsoft’s headway in these directions. Microsoft, though, is on the same path as Facebook’s Oculus — its product, the HoloLens, is not phone-based.
Apple has also acquired a number of small AR/VR companies. Typically, it hasn’t announced where it’s going with this, however. In February, Piper Jaffray analyst Gene Munster suggested that on the basis of the hires and the acquisitions, Apple may be ready with something in 2018.
That’s two years down the road — not a critical gap for the company, which waited about that long after the first decent smartwatches emerged to release its own and outsell all other producers (even if, by Apple’s own high standards, the Apple Watch is not a major success). Apple iPhone fans may be happy to wait until Apple catches up to Google which, LinkedIn searches suggest, has about twice as many people working on VR. Yet Google’s effort with Android N appears to be part of a strategy designed to shape use patterns rather than just market improved devices. The company’s other upcoming offerings appear complementary to turning phones into VR gadgets.
One is a messenger app called Allo, which will, like the Russian-designed Telegram and — so far mainly in intent only — Facebook, provide a platform for chat bots. These pieces of software allow people to talk to them in natural languages to get them to perform specific functions. I use one on Telegram that helps me find pieces of classical music, but one can also get a bot to find news on a certain topic from specified sources, book plane tickets or a table at a restaurant. Chat-based interfaces often beat traditional ones, which use search windows or even catalogs, because they’re better suited to voice or short-typed commands. Allo integrates Google’s digital assistant, which will make suggestions based on what’s being discussed in the chat. That sounds annoying — another opportunity for advertising to seep into our lives — but it could also be useful functionality, depending on how it’s realized.
Bots with different degrees of artificial intelligence are useful for devices with small screens such as smartwatches. At I/O 2016, Google presented a new version of its watch operating system, Android Wear. It makes it unnecessary for a watch to connect to a smartphone to perform most of its functions. Google is working on making it unnecessary to carry a phone in one’s pocket, say, on a lunch break: With its enhanced capabilities, it will only come out of the bag on train rides or whenever its owner has some time for immersion.
Voice commands are the order of the day for home-based devices, like the popular Amazon Echo and soon its direct competitor, called Google Home.
The smartphone industry appeared to face a dead end as growth slowed and it became difficult to imagine how new phone models would improve on existing ones. Google has now taken a leap forward, and it’s laid out a road map for users to change their habits. They may not want to do that, and the Android ecosystem may not benefit too much from Google’s vision, especially if Apple agrees with it and makes an effort to catch up. Yet at least this is light at the end of the tunnel for phone manufacturers, app developers and content producers: advances in VR and in untethered wearables could fuel the market for years to come.

Leonid Bershidsky copy
Leonid Bershidsky is a Bloomberg View columnist. He is a Berlin-based writer, author of three novels and two nonfiction books

. Bershidsky was the founding editor of Russia’s top business daily, Vedomosti, a joint project of Financial Times and the Wall Street Journal, and the first publisher of the Russian edition of Forbes.

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