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The outlook for wearable cameras is getting a fresh boost from word that Google (GOOG) is exploring a new class of the devices, leading to a burst of speculation about their use in everything from warfare to sports and education.

For little Ambarella (AMBA), a developer of advanced HD video compression technology that Google plucked from relative obscurity as its partner on wearable cameras, the news could be an earth-moving deal.

Ambarella, with less than $200 million in revenues, makes chips that enable wearable cameras total mobility while recording full HD video that can be streamed back simultaneously - and wirelessly -- to other viewers.

To be sure, older versions of wearable cameras have been around for a while.

Novelty "spy camera" wristwatches that take still images are at least as old as the circa-1960s James Bond movie franchise. Helmet cameras have been used by the military for decades, and more recent versions of them were used prominently by journalists during the Iraq War.

Lately, stun-gun maker TASER International (TASR) has made headlines by marketing a wearable camera to law enforcement personnel. (Presumably, it makes legal sense to keep a video record of who you zap with an electric charge before you read them their rights.)

But the Google-Ambarella partnership has the potential to take wearable camera technology to new heights.

Still, don't expect it to move the needle for Google today or tomorrow. After all, Google already has $57 billion in revenues, and products that transform the culture, like Apple's iPhone, don't come around every day.

However, the needle is already moving for Ambarella - the stock has soared since the Google announcement in December. Ambarella is a member of the Barron's 400 Index, which adheres to a growth-at-a-reasonable price (GARP) selection strategy.

Even at these elevated levels, though, Ambarella is not out of sight from the fundamental growth and value requirements of the Barron's 400 (B400).The stock has a forward P/E of 21.8 vs. the B400's average 29.19; a Price/Book ratio of 6.5 vs. the B400's 6.46 and an Operating Margin of 22.9 vs. the B400's 17.32.

The ROE (TTM) comparison is a bit rich - 34.2 for Ambarella vs. the B400's average 19.29 - but nothing that a New Year's pullback in AMBA shares could not even out.

The Google-Ambarella partnership has modest initial goals, at least publicly.

It will be used in the Google "Helpouts" service, an educational application that lets teachers and students see live video from each other's perspective in sports, fitness, art, cooking, engineering or "any other hands-on activity," according to the companies' recent joint announcement.

"'Helpouts' allow people to get expert advice in real time over video," said Udi Manber, Vice President of Engineering at Google. "With easy-to-use wearable cameras, the other person sees what you see, and the interaction becomes efficient and simple."

This new wearable camera is set to be unveiled at the Consumer Electronic Show (CES) in Las Vegas from January 7-10.

It does seem a reasonable bet the new wearable camera could be worn on the head somehow. (It sounds unlikely you could get useful and oriented point-of-view imagery from the other person's perspective by mounting such a device on the wrist or feet.)

If the new Google wearable camera is mounted on a person's head, it also seems reasonable it could be tied in ultimately with - if not outright integrated into - Google Glass, the company's much-anticipated eyewear computer that is expected to see consumer release in 2014.

But there are other potential applications here for Google, also. The tech giant has been on a robotics acquisition tear, buying eight robot companies in recent months, according to The New York Times

The two-legged and four-legged robots these acquisitions are producing clearly could benefit from live HD video display of an advanced nature that a human controller could view from afar.

The remote viewing aspect of a wearable camera that is wireless, and therefore mobile, may have even more profound application in the field of transportation.

A number of major companies, including major automakers and Google itself, are developing technology for driverless cars. (What Google may be up to in the field of drones is a subject of further speculation.) The Google-Ambarella announcement states explicitly that the new wearable camera stabilizes video even when users are in motion.

Experts agree it will take years of regulatory review - not to mention technological development - before autonomous vehicles are ready for prime-time on U.S. highways. But preparations toward that goal are well underway.

In the meantime, the budding Google-Ambarella partnership seems like it can take any number of auspicious turns on a road to successful innovation. Wearable cameras may be here to stay.

CONCLUSION: A long play on AMBA is a bet this attractive company of smart operators can continue on its current trajectory. Along the way, the company is a logical takeover candidate by a long list of potential suitors for whom its technology is both complementary and something that can be leveraged in the video compression and mobile space. Google rarely makes stupid choices for its partnerships, and this is not one of them.

Source: Wearable Cameras: More Than A Tech Fashion Accessory