Tech Transformers

This is why Nokia is betting big on virtual reality

Nokia bets on virtual reality
Nokia bets on virtual reality

In July, Finnish telecoms firm Nokia released a virtual reality camera called OZO in what was its first hardware release since it sold its devices business to Microsoft for $7.5 billion last year.

The launch of OZO came as a surprise to many but it marks Nokia's slow first steps back into the consumer space in which it hopes to spark a "consumer revolution".

"If you think about Nokia today, we really have this desire to incubate new growth markets for the company," Guido Jouret, chief technology officer at Nokia Technologies, told CNBC in an interview at the Slush technology conference in Helsinki, Finland.

"Nokia has deep deep expertise in optics, sensors and audio. And when you put all those things together, you say, what new methods do we think are going to revolutionize media and entertainment? And we clearly believe that is virtual reality."

OZO is a ball-shaped device with eight cameras in it. Jouret explained that it is the size of a human head with each camera spaced out at the same distance as two eyes in order to create a realistic perspective when a person watches the finished product.

Consumer version of VR camera?

The price for OZO has not been released and this version is likely to be for the professional market – from Hollywood film makers to broadcasters – as Nokia hopes to spur companies to produce more content for consumers. And eventually Nokia says this could be extended into the prosumer market.

"Clearly we believe that with the current offering, it's clearly to see the market get the content production pipelines going, make it easier for consumers to find content. But the content will be consumed by consumers. The logical progression would be to take this technology to the prosumer type market and consumer," Jouret said.


"We are not going to stop with one camera. So clearly technology will move on."

The CTO envisioned that OZO would follow the progression of the SLR camera which went from professional-grade device to consumer "point and shoot". Currently, virtual reality is difficult to create and could take a long time as different images need to be stitched together to create the effect. OZO claims to do this for the film maker with its eight cameras. It also allows real-time virtual reality streaming, which could be used for sports events, Jouret said.

But Nokia is not going to get into the business of virtual reality headsets. Film created with OZO is compatible with existing viewers such as the Facebook-owned Oculus rift. Hardware is a tough game right now and OZO's release is a bid for Nokia to diversify away from its core business of network technology back into hardware. But unlike the smartphone business which has seen margins squeezed, Jouret said the fact that virtual reality is just in its infancy means that there will be "healthy margins" in it for Nokia.

Return to smartphones?

Despite Nokia dipping its toe back into the consumer market with virtual reality, Jouret said that it is not ready to come back to the phone business. The Finnish company is not allowed to make smartphones until the end of 2016 under the terms of the sale of its devices business to Microsoft.

And if Nokia did get back into the handset market, it would only do so under a brand licensing deal where it would design the phone for another company to manufacture, Jouret explained. But in the future, Nokia's push into virtual reality could see the firm play a part in the smartphone market again.

"These phones are increasingly the playback device of choice for virtual reality, clearly having a say in what goes onto these devices could be very useful. At this point we haven't quite determined what that will be or what form that would take. And again that would be if we do a deal which we haven't yet announced or decided on," Jouret said.

"So at this point the only business we are ready to announce is our virtual reality business. Our mandate is to look and incubate additional businesses, we never said we would stop at just VR and we continue to explore other markets."