WhatIs.com's definition of a natural user interface (NUI):
"A natural user interface (NUI) is a system for human-computer interaction that the user operates through intuitive actions related to natural, everyday human behavior."
This article will discuss the progression of natural user interfaces and why Advanced Micro Devices (NYSE:AMD) is well positioned to benefit from this large trend in computing.
Most science fiction writers have better long-term vision than Wall Street
Anybody who has read science fiction books, (including comic books), or watched sci-fi movies and TV shows, knows that many of the writers were technology visionaries. Mobile phones, mobile video phones, verbal computer interfaces, handheld electronic medical diagnostic devices, etc., were first envisioned by sci-fi writers.
Natural user interfaces should be an obvious trend to anyone that is remotely conscious. But, it seems that Wall Street does not take notice until many quarters of sales growth, and usually not until many quarters of profit growth.
Apple (NASDAQ:AAPL) introduced the iPod in 2001 and the iTunes store in April 2003, but it was not until 2004 that the stock finally started to reflect this growing trend. Wall Street hated Apple, and simply did not want to believe the reality of this huge music trend that was playing out before its eyes.
Steve Jobs did not write code, and was not an engineer. He was a visionary technologist, and a businessman.
The trend in natural user interfaces
The first computers required punch cards. Then, the next round used typewriter keyboards. Finally, the mouse and windows were added.
The next large breakthrough was the iPhone and the current proliferation of consumer touch screen devices.
While there have been some programs for verbal typing, there is no currently available operating system that relies primarily upon spoken demands.
The Xbox One changes everything, in my opinion
The Xbox One's brain is a multi-core AMD APU that completely relies upon verbal and gestural commands, rather than a keyboard, mouse, or touch screen.
Why people do not consider this device to be a major breakthrough, in the long trend towards increasingly natural user interfaces, is a mystery to me. Of course, there is a handheld controller for playing video games, but the main operating system is completely controlled by voice and/or gestures.
Understanding the real world is best handled by the parallel processing capabilities of the GPU
Almost all supercomputers, which are primarily used for understanding the real world, rely upon parallel processing.
The Graphic Processing Unit, or GPU, is based upon parallel processing architectures.
Natural user interfaces, such as that in the Xbox One, rely upon hardware that processes sounds and video into understandable digital commands.
As devices are called upon to "hear" and "see" the real world, they will increasingly rely upon the GPU portion of the microprocessor chips that power those devices or the servers that they connect to in the cloud.
AMD and Nvidia (NASDAQ:NVDA) are many years ahead of any other companies in the world in the GPU area.
While Intel (NASDAQ:INTC) sells a lot of low end GPUs, it is far behind AMD and Nvidia in high end GPUs.
AMD is the pioneer and leader in APUs
AMD is the pioneer in combining the Central Processing Unit, or CPU, on the same piece of silicon, as the GPU.
Both the Sony PS4 and the Microsoft Xbox One rely upon a single APU, rather than a discrete GPU.
As discussed in this Seeking Alpha article, AMD and some of the most powerful chip companies are working together to better integrate and unleash the power of the GPU.
Natural user interfaces will rely increasingly upon the GPU, and less on the CPU
A less complicated GPU can perform a single chore, such as recognizing a preprogrammed fingerprint. But, running the entire operating system based upon sounds and images requires a very powerful GPU, whether in the device or in the cloud.
The cloud will increasingly rely upon the GPU
As most future devices are becoming increasingly "thin," as best exemplified by Goggle (NASDAQ:GOOG) Glasses, the cloud will increasingly rely upon the GPU.
AMD is the only company other than Intel which has vast experience and IP in providing the chips used in cloud servers. Since AMD has superior GPU and APU capabilities than Intel, I believe that AMD will become the biggest beneficiary of the move to natural user interfaces.
AMD focuses on devices/equipment that require instantaneous GPU access
Even the best fiber connection to the cloud has a lag/delay that is unacceptable to most video game enthusiasts. Therefore, this is an excellent market for AMD's APUs.
Self-driving automobiles, airplanes and military equipment are other large market examples of where a powerful GPU is required, because relying upon a cloud connection will generally be too slow and unreliable for instantaneous processing.
AMD is extremely well positioned, probably better than any other company, to benefit from the long and powerful trend toward increasingly natural user interfaces.
Wall Street appears to be oblivious to the relevant facts regarding AMD and natural user interfaces that have been sighted in this article.
The current major disconnect between Wall Street and reality is a large opportunity for long term investors, who have the vision and patience to take advantage of this situation.