Google Glass Will Be Consumed

Jun.24.13 | About: Alphabet Inc. (GOOG)

Google (NASDAQ:GOOG) Glass was created by Babak Parviz after he envisioned contact lenses being embedded with electronics that could project images onto a wearer's eye. That is an amazing idea and though it isn't what Glass has become, the product that will be launched in 2014 is quite amazing as it is currently envisioned.

What is Glass?

Glass will allow a user to view, request and receive information through a combination of display, video or spoken two-way interactions occurring independently or simultaneously through a lightweight head-mounted computing device. Sarah Rotman Epps, a senior analyst at Forrester Research, one of the top technology research firms in the world, states that "Glass is a "when," not "if," product." Rotman Epps further states "Glass will be the next great platform to innovate for, and should be on every company's radar. Glass will be the next Pinterest, Facebook, Amazon and iPhone all rolled into one." Several videos have been released on Youtube and other sites by individuals who have participated in the testing phase of Glass. The potential applications for Glass appear limitless. A physician recently performed a surgery while streaming a Glass video to a Google + Hangout so that others could watch and learn from his surgery. Google has also provided a glimpse of what Glass can do. Robert Scoble, a well-known technology blogger, recently utilized Glass for two weeks. On April 27, 2013, he made various statements on his blog that were astounding, "I will never live a day of my life from now on without it (or a competitor). It's that significant. This is the most interesting new product since the iPhone and I don't say that lightly."

Glass Could Become One of the Fastest Selling Consumer Electronic Products Ever.

It is becoming clearer as the days go by that Glass is going to be consumed. Lets consider just how much it will sell. Below is a chart displaying the unit sales in the first 90 days after commercial launch for three of the fastest selling consumer electronic products ever.

Unit Sales in First 90 Days After Commercial Launch





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BI Intelligence, a respected mobile industry research provider, developed the following forecast of Google Glass unit sales through 2018.

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The exact date of the commercial launch of Glass is not known but BI is estimating approximately 800,000 unit sales of Glass in 2014. Glass is set to be released a year from now and is already generating significant hype and excitement. Glass unit sales will likely never be as significant as smart phone or tablet sales, especially while the product is only functional when tethered to a smartphone, but by the time Glass is actually sold commercially it is conceivable that the hype and excitement will exceed that of the most recent iPhone and iPad product launches. In that event, Glass unit sales in the first 90 days from launch should be in the hundreds of thousands, if not millions and will be one of the fastest selling consumer electronic product launches ever.

Within 5 Years Of Launch, Glass Could Generate $29 Billion In Cumulative Sales

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Google's total revenues for the year ended December 31, 2012 were $50.2 billion. By 2019, BI Intelligence has forecasted $28.8 billion in cumulative Glass sales. Glass could become a significant component of Google's top and bottom lines by 2019.

Glass Will Create And Initially Lead A Fourth Major Category Within Mobile Consumer Electronics Products

According to the Consumer Electronics Association ("CEA") forecast released on January 8, 2013, the CEA expects shipments of connected devices as follows in 2013.

Forecasted Mobile Device Unit Shipments








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Glass will be the creator and initial leader in a fourth primary component of this chart, "wearables." A user can record a video of what they see when they are walking down the street in New York City. A father can take an impromptu video of his son's first bikeride. A user can turn on the video and relay a real-time video of them skydiving in Hawaii to a friend in Los Angeles. While walking out the door to work, working in an office or driving somewhere, a businessman can coordinate and complete daily tasks faster and more efficiently. In most settings the main issues brought up about Glass, privacy and style, will work themselves out once the product is in the public's hands. A husband won't wear Glass while at dinner with their wife. Anyone who uses Glass in a way they should not or when they should not will not be tolerated. The public will have to enforce this in much the same way that smoking in public is enforced nowadays, which admittedly is not perfect. We can't make people stop smoking and we won't be able to make people stop using the most efficient computing products on the market.

What Does This Mean?

Eventually, we will be able to do anything we want to do that we used to do with our smartphones without using our hands. Better yet, Glass will return our queries, manage our calendars, provide task reminders, translations, banking info, and stock information to name a few, in a crisp voice-enabled response accompanied with a video or display response. First, this means significant product sales for Google. Second, it creates a new software and services opportunity for Google. Google's interests in developing Glass are likely first to just open the wearables market. Google is likely to be a big winner in the wearables software and services market. Google will provide search, video entertainment through youtube, social networking through Google +, adserving (albeit not on their own Glass products according to Google), mapping and other services through wearables products. By launching Glass, Google is opening the wearables market perhaps a bit sooner than it would have opened otherwise and Google may be able to prominently install and otherwise offer its software and services products on Glass and other wearable products as a result of its leadership in the wearables space. The true impact of Glass in the next 5 years will not be limited to just BI Intelligence's $28.8 billion in forecasted product sales.

Possible Competing Products

What other potential products could solve the issues that Glass solves? Apple (NASDAQ:AAPL), Samsung (005930.KS), Baidu (NASDAQ:BIDU), Asus (2357.TW), Microsoft (NASDAQ:MSFT), Motorola Solutions (NYSE:MSI) and many others are said to be developing wearable computing devices. Will Apple's iWatch or another competitor's wearable devices be competitive and perhaps a better product than Glass? It doesn't seem as though anyone is convinced of the iWatch. There are many other potential wearable products.

The Wearables Market Will Take Off, And Glass Will Lead

The wearables market is at an early stage obviously but head-mounted products do seem to be inherently more interactive and therefore more useful than products designed to be worn on arms, legs or other areas of the body. A head-mounted device can be mounted close to a user's ears, eyes and mouth so that hearing, seeing and speaking can be easily integrated into the product design. Glass will be the first commercially launched head-mounted wearables product. Google will not only benefit from the sale of a product that will likely be very profitable but also from the direct increased usage of its other services by its users as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.