What you see in the picture below is the "Glass," Google's (NASDAQ:GOOG) latest gadget. It is Google's way of creating a heads-up-display that everyone can use to take pictures, videos, video chat, to record and share experiences from a first-person perspective. This is a product that will forever change the way people work, share and play in a million different ways!
Don't you want it already? At least, I do!
(click to enlarge)(Source: google.com/glass)
(click to enlarge)(Source: google.com/glass)
But Google won't let us have it!
Unless you are a Google I/O attendee (i.e. developer) or follow the instructions given on the product's site:
Using Google+ or Twitter, tell us what you would do if you had Glass, starting with the hashtag #ifihadglass.
- Your application must be 50 words or less
- You must include #ifihadglass in your application
- You can include up to 5 photos with your application
- You can include a short video (15 secs max)
- Be sure to follow us on Google+ (+ProjectGlass) or Twitter (@projectglass) so that we can contact you directly
- You must be at least 18 years old and live in the U.S. to apply
- For more details, please see our full Terms and FAQ.
The deadline for applications is February 27th. If you are chosen, we will reach out to you with an invitation to become a Glass Explorer (please remember to follow us so that we can contact you directly). Explorers will each need to pre-order a Glass Explorer Edition for $1500 plus tax and attend a special pick-up experience, in person, in New York, San Francisco or Los Angeles.
What you've just read is proof that Google has a really good marketing plan and it is really close to launching the product. Bringing in developers allows Google to create an app store for the Glass and get some feedback on use, functionality and possible improvements.
Furthermore, by allowing 8,000 consumers to become "explorers" they achieve two things. They create a core consumer's group for the product, and they will receive feedback on how people are going to actually use and/or abuse it. That said, I believe that "explorers" are a sign that Glass is in the last stages of its development and may be available within the next year or so.
The main reason Google's Glass has the potential to become a huge success and an everyday necessity is the vast number of uses it is suitable for. You can watch how it feels to wear the Glass here.
While we are at work it can help us share information faster and better. We will go through complicated procedures while viewing the instructions on our Glass. For example a doctor could perform an operation while watching an instruction video on his glass, or a mechanic could check our car using a checklist on his Glass. An officer could use it to instantaneously scan someone's face through the wanted list.
TV and cinema will never be the same. Imagine watching a football game through the eyes of your favorite player. Or that you could watch a movie through the eyes of the starring character. Video games will change too. Real-world games, which are played wearing the Glass and moving in the real world will become the new standard.
Using Google Now you'll immediately get useful info as you go about your day. For example, when you wake up you'll be told the weather, what appointments you have or whose birthday it is. As you get into your car you'll learn about the traffic and the Glass will show you the less time-consuming route.
When you go shopping, you'll simply watch a QR code and your Glass will immediately show you the price of the blouse you're looking at, or what's the menu of the restaurant you're passing by. With GPS included you'll never lose your way again either while driving or walking.
If Google does it right, the Glass will become a product used by everyone around the world. So far Google seems to move in the right pace, it's neither hasty nor lacks enthusiasm. Google even decided to bring in an eyewear start-up to help with the design
Google is about to make history by bringing to life a gadget that used to be science-fiction. Given the numerous uses this product could have, Google will easily sell tens of millions of those devices and grow its profits exponentially. However, we don't know when the Glass will be available to the market.
Because of this uncertainty, buying Google stock based on this product's future success is pure gambling, no matter how good the Glass appears to be.
Nevertheless Google isn't expensive at its current valuation. It had $32.31 EPS in 2012 and an average 5-year EPS growth rate of 19%. Using discounted cash flow analysis (with 5% discount rate) we can conclude that Google's fair value is about $850, a little higher than its current $800 stock price.
Having said that, I believe that the prudent thing to do is to wait for at least a 10% pullback to $720 before you start building a long-term position in the stock.