Jan 2, 2019 · 23m · a16z
a16z Podcast | When Is VR's iPhone Moment?
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z Podcast, Andreessen Horowitz general partner Chris Dixon and Bigscreen VR CEO Darshan Shankar analyze the hardware, content, and economic dynamics shaping virtual and augmented reality. They explore friction points, retention drivers, enterprise versus consumer adoption, and why VR is positioned to achieve mass consumer success ahead of AR.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 6.5 Guest teaching 3.5 Guest disagreement 1.3 The host pushing back 1.5
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 11:59 Dismissing standalone mobile AR potential
Shankar directly pushes back against host enthusiasm for mobile AR, asserting that standalone multi-billion dollar companies will not be built on phone-window AR experiences alone.
Hardest push from the host ▶ 12:04 Challenging phone AR utilityDixon presses Shankar on whether looking through a smartphone screen is a sufficiently compelling experience to drive consumer AR adoption before dedicated head-mounted gear arrives.
Biggest teaching moment ▶ 12:39 UIKit analogy for ARKit adoptionShankar educates Dixon on the true strategic purpose of ARKit, comparing it to Apple's Mac UIKit developer onboarding pipeline rather than an immediate consumer application layer.
The host holds their own ▶ 9:08 Explaining ASIC semiconductor curvesDixon demonstrates deep hardware economics expertise by detailing how dedicated computer vision ASICs must follow semiconductor price drops down to $10 to enable standalone positional tracking.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Evaluating VR and AR Hardware and Content Retention | 6 | 3 | 1 | 1 | Host Chris Dixon sets up the interview with detailed domain knowledge across both high-end and low-end VR/AR hardware ecosystems. The guest expands on retention metrics and AAA gaming titles, creating a collaborative baseline. | |
| Immersion Factors and Hardware Cost Reductions | 7 | 2 | 1 | 1 | Dixon demonstrates strong technical grasp by explaining positional tracking, 6DOF, hand tracking, and consumer price drops. He offers personal anecdotes regarding hardware friction and cites industry analyst Benedict Evans. | |
| Microsoft Windows Mixed Reality and Dedicated Processing Chips | 7 | 3 | 1 | 1 | Dixon actively guides the technical discussion on computer vision processing requirements for positional tracking. He explains how semiconductor price curves for dedicated ASICs will unlock standalone VR capabilities. | |
| Mobile AR Limitations and Developer Ecosystem Adoption | 6 | 6 | 3 | 3 | Dixon questions whether mobile AR window experiences are compelling enough, prompting Shankar to reframe ARKit's value as a developer onboarding bridge similar to UIKit on Mac. Dixon acknowledges the insight. | |
| Enterprise AR Applications and Market Timelines | 8 | 3 | 1 | 2 | Dixon leads with heavy theoretical expertise, bringing up the concept of the AR Turing test, world semantics, and Steam user demographics to argue why VR will reach its iPhone moment before AR. | |
| Bigscreen VR: Social Presence, Media, and Productivity | 5 | 4 | 1 | 1 | Dixon highlights the central irony of VR appearing anti-social from the outside while being intensely social on the inside. Shankar details specific Bigscreen VR use cases spanning co-watching media and spatial productivity. |
Statements from this episode (16)
Shankar: VR content drives tens of weekly hours for the first time
“And I think this is the first time in, in the history, the multi-decade history of VR, where The content is compelling enough that people are spending tens of hours a week using these headsets.”
Dixon: VR users cannot achieve flow state without hand tracking
“If you lose yourself and you go into flow state, and if you don't have hands in VR, you don't get that.”
Shankar: Total Oculus setup costs dropped over 50% in 18 months
“The PC, the headset, anything that you need, it's now more than half the price. That's a significant drop in a year, year and a half.”
Dixon: $200 is the magical price point for consumer electronics adoption
“It's generally considered a magical price point for consumer electronics.”
Shankar: Full 6DOF standalone VR headsets will launch within 18 months
“There are going to be dev kits of that next year, and that shows that if you move the price point up, and if you move the timeline of another six to 12 months or 18 months, you do get a fully standalone headset that does have the full capabilities of six degre…”
Shankar: Microsoft WMR headsets launched at $350 compared to Oculus's $800
“But it's also higher resolution. It's at an affordable price point, so they're launching at 350 dollars. Rather than how Oculus launched a year and a half ago at 800. So it's lower price point, easier to use.”
Dixon: $10 positional tracking ASICs will unlock standalone VR headsets
“So once you get positional tracking ASICs that are, you know, that hopefully follow the typical semiconductor price curve, and they drop down, and eventually they're 10 bucks or something, you can put it in a Go, you get positional tracking, and that unlocks l…”
Shankar: Hardly any startups received venture funding for ARKit or ARCore
“And you're seeing the same thing with ARKit, where there's maybe a handful of startups, hardly anyone got funded on ARKit or ARCore.”
Shankar: The major AR app wave requires headsets, not smartphones
“I don't think you'll have that second wave until it's actually in a headset, until it's on a head mount.”
Shankar: Augmented reality is nowhere near its consumer iPhone moment
“But I think AR is, is nowhere close to its iPhone moment in the sense that the price point is sufficiently far beyond what most people would be able to afford right away.”
Shankar: AR headset prices will exceed $1,000 for the next three years
“We're talking about price points that are north of a thousand dollars for the foreseeable future, for the next two to three years.”
Shankar: No major tech player will release consumer AR headsets before 2019
“Not to mention the consumer versions of these devices, whether Apple, Magic Leap, Hollins, none of the major AR players are releasing anything really until 2019 in terms of a consumer usable headset.”
Shankar: VR leveraged mobile supply chains, but AR lacks equivalent components
“The whole VR movement got kickstarted off just mobile devices. The iPhone and the entire mobile ecosystem of hardware allowing cheap gyroscopes and cheap displays, cheap high resolution displays to be used to bootstrap the initial VR headsets.”
Dixon: Steam and League of Legends reveal a 100M+ target VR audience
“If you just look at the data for Steam and League of Legends, there's, you know, a hundred million plus people who really want intense, you know, virtual experiences, and have disposable income, and a bunch of other things.”
Dixon: VR is the most social computing medium ever created
“From the inside, I think it's the most social computing medium that's ever existed.”
Shankar: Post-Oculus acquisition VR forecasts were wildly hyper-inflated
“Back when Facebook bought Oculus, that's when expectations of VR started to get wildly away from reality. Oh, by 2016, there's gonna be 20, fifty million headsets out there. There might be a hundred million headsets by 2017. Some analysts definitely blew a lot…”