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The East African : April 14th 2014
The EastAfrican 36 OUTLOOK APRIL 12-18,2014 e -AF R ICAN Is Facebook’s takeover of Oculus wise? C≥itics say that Facebook has no expe≥ience in gaming o≥ vi≥tual ≥eality By A SPECIAL CORRESPONDENT Knowledge@Wharton S ince Facebook announced a fortnight ago that it is buying vir- tual reality start-up Oculus VR for $2 billion, questions have circulated about the wisdom of the deal. Critics say Facebook has no expe- rience in gaming or virtual reality, and that Oculus could have found other suitors with a better track record in that space. Wharton experts Kevin Werbach and Kartik Hosanagar, however, feel the deal makes sense and provides Facebook with a new platform for growth in connecting people globally. The Oculus Rift virtual reality gaming headset is the invention of 21-year-old Palmer Luckey of California, a self-taught engineer, hacker and electronics enthusiast. He started out working in his home garage to create a head-mounted display that was both affordable and superior to competing products. The Rift claims to provide an “immersive experience” that mimics normal human vision with a seveninch screen, a field of view of more than 90 degrees horizontally, and reduced latency and motion blur. Over 18 months, Oculus has raised $91 million, including $2.4 million from 9,500 backers on crowdfunding site Kickstarter, and sold some 75,000 development kits to software developers. A consumer version of the Rift is expected in late 2014 or early 2015. Many are unhappy that Oculus is selling itself to Facebook, including several of its backers on Kickstarter who say they feel let down. After the concerting to see a device like the Rift in the hands of a company with almost no experience in gaming hardware or software. But Facebook founder and CEO Mark Zuckerberg is convinced he made the right bet. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate,” he said in a press release. “Facebook buying Oculus was a shock, and not just because of the price,” says Werbach, a Wharton professor of legal studies and business ethics. “While Oculus was a hot company because of its huge success on Kickstarter and the sexiness of virtual reality, no one really anticipated the connection to a social network.” Citing a famous quote by Wayne Gretzky, the former professional Canadian ice hockey player, he adds, “This is clearly a case of Mark Zuckerberg skating to where he thinks the puck is going, rather than where things are today.” As Oculus VR said in a blog post, An Oculus Rift HD virtual reality head-mounted display. Picture: AFP WILL FB SELL RIFT AS A GAMING SYSTEM? According to Kartik Hosanagar, Facebook’s main business model with Oculus could be one where the company earns revenues as a percentage of sales for all apps sold on the platform. In addition to gaming, he lists medical, education and military deal was announced, Swedish video game developer Markus “Notch” Persson, creator of the popular Minecraft virtual environment, tweeted that he has cancelled a deal apps using virtual reality as other opportunities. However, he sees those as more likely avenues for other virtual reality firms with a strong businessto-business focus rather than for a consumer-oriented company like Facebook. to bring a version of Minecraft to Oculus. “Facebook creeps me out,” he said. Other critics note that it is dis- “At first glance, it might not seem obvious why Oculus is partnering with Facebook.” However, the company explained that it sees a cultural alignment where both firms view virtual reality as the “next step” in creating “a more open, connected world.” “Facebook is ultimately a plat- form company,” says Hosanagar, a Wharton professor of operations and information management. “For Facebook, the opportunity is that of building a new platform. After the PC, we have seen two new computing platforms emerge — smartphones and tablets — and Apple and Google rule those. For Facebook, it is important to track other emerging platforms and play a dominant role there.” Zuckerberg, too, describes the Oculus Rift as “a platform for many other experiences.” Apple sits on $159b as ≥ivals go on acquisition sp≥ee By NICK BILTON Special Correspondent BIG TECHNOLOGY companies have a problem anyone would love to have: They are sitting on vast amounts of cash. According to a report by Moody’s Investors Service, US companies outside the financial industry were sitting on a combined $1.64 trillion of cash by the end of 2013. And tech giants like Apple, Google and Microsoft had the most. Apple topped the list, with nearly $159 billion. A decade ago, before the iPhone came along, the company was holding about $5.5 billion. Apple seems happy to let its trove sit un- touched, though the company has not said why. Economist John Maynard Keynes argued that companies tend to hoard cash for three reasons: To perform day-to-day transactions, to protect themselves in the event business slows, and to prepare to make investments should opportunity arise. Apple certainly is not using its cash for acqui- sitions. Compared with its competitors, the company spends very little money buying technolo- gies new or old. Google has spent billions on video sites, ro- bots, driverless-car technology and artificial intelligence software. Amazon has bought robot-makers, e-commerce services and hardware start-ups. And Facebook has spent more than $20 billion in just the last two months on a messaging platform and virtual reality technology. Yet Apple has barely broken the skin over the last decade, buying AuthenTec, a fingerprint sensor company; Siri, the voice service; and Topsy, a data analytics company. Apple has never $1.64tn The amount of cash US companies were sitting on in 2013 even made a single acquisition more than $1 billion. Where are the robots, the driverless cars, the virtual reality goggles? In an interview in February with The Wall Street Journal, Timothy D. Cook, Apple’s chief executive, said the company had looked at big companies but had no urge to buy for the sake of buying. “The money is also not burning a hole in our pocket where we say let’s make a list of 10 and pick the best one,” Cook said. He said Apple was “not going to go out and buy something for the purposes of just being big.” But the money is burning a hole in the pock- ets of investors who want Apple to use some of it to pay dividends, buy back stock or both. Carl Icahn, the vocal billionaire investor, is leading the charge. Rick Lane, an analyst with Moody’s who wrote the report on the company’s cash holdings, said Apple could be holding onto some of its cash for a rainy day. Apple once fell on “very difficult times,” he said, “and had to rely on, in part, the kindness of others.” “Without having to rely on the capital mar- kets, which can be mercurial, it’s a kind of selfinsurance to have that cash on hands for the times when things go bump in the night,” he said. Compared with Google, Apple seems to be fo- cused on the here and now rather than the faroff future. LG devices. The firm has unveiled a new unlocking code .Pic: File Mobile tech start-ups invited for IT award The organisers of Pivot East, a mobile web innovations competition, have invited entries of innovative IT ideas from the East African Community and Ethiopia. M-Lab East Africa said the entrants should have creative ideas that have not been commercialised, have a viable mobile web tech model that can generate income and a team comprising at least two people. The pplication deadline is April 11 and the pitching conference will be on June 24. BRIEFS Kigali’s plan for boosting Internet penetration Rwanda citizens will access the Internet and pay for it on a long-term basis, government officials have said. The initiative is aimed at increasing Internet penetration in the country. Didier Nkurikiyimfura, DirectorGeneral of ICT in the Ministry of Youth and ICT, said they were in discussions with manufacturers, suppliers and banks to find a model that will allow citizens to acquire Internet-enabled devices. “This product is going to enable the clients to pay on a long-term basis so that the cost of the devices shouldn’t prevent them from accessing the Internet,” he said. Chinese firm offers civil servants smart solutions China’s ZTE Corporation is offering Kenya’s civil service smart solutions to enhance productivity. The officials of the global provider of telecommunications equipment and network solutions, who visited Nairobi last week, met with key government officials to discuss possible collaboration. Hu Xin, the company’s chief technology officer said the firm intends to help the government instill efficiency in public service through various smart solutions. LG unveils unlocking code for smart devices LG Electronics has introduced Knock Code, a feature that allows users to unlock their LG smartphones with a knock pattern instead of a number code. Knock Code will be a key feature in the LG smartphone models, including the G Pro 2, G2 Mini, F Series and L Series III, and later in the older models. Knock Code consists of four designated areas on the screen to be tapped in a sequence of one’s choice to unlock the device.
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