When Facebook (NASDAQ:FB) purchased Oculus VR in March of this year, it reignited interest in virtual reality as a medium for entertainment. This has spurred research, interest and development that is expected to take virtual reality well beyond the current uses in the gaming industry. As technological advances have created an environment that is seamless, users can genuinely feel the experience through the use of headsets.
Himax Technologies: A Leader in Display Imaging Processing Technologies
As this technology marches forward there are a few players that are leading the pack. Google Glass (NASDAQ:GOOG) (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Facebook are the expected players that will continue to lead the industry in technological advancements. In addition to these major companies there are supporting companies that play a critical behind the scenes role, and will be rewarded handsomely as the major companies find success.
Himax Technologies (NASDAQ:HIMX) has positioned itself to benefit from technological advancements in the virtual reality market. The company is a leading semiconductor manufacturer that provides chips and technology for mobile devices and televisions, including the virtual reality headsets used by Oculus VR and Google Glass. Currently only 18% of its business comes from partnerships with these companies. This puts the company in a position for tremendous growth. Due to these catalysts, Yahoo Finance is predicting earnings to grow annually by nearly 40% for the next five years.
Currently the delays with Google Glass and Oculus Rift have suppressed the stock price, creating a value stock for investors. The 52-week stock range has been from $5.57 to $16.15. Himax is not only working with Oculus and Google Glass, they also have their hand in television and cell phone technology that will grow the company exponentially. This high level of versatility reduces investor risk and increases the upside. With the stock currently trading in the $6.00 range, this is a true value stock. As virtual reality moves into mainstream, Himax will benefit through increased demand for its chips and technology providing exponential growth.
Oculus VR has led the charge in creating a virtual reality environment that blurs with reality. Himax, a chip producer with technology in Oculus Rift, is poised to ride the coattails of Oculus. This was evidenced by the bump in stock price when the Facebook and Oculus deal was announced in March.
Virtual Reality Software
The growth will be there as head-mounted displays will be around for many generations to come as virtual reality makes headway in the gaming, entertainment, healthcare, education, military, and travel industries. The uses for virtual reality headsets are endless as seen recently by Next Galaxy which is developing one of the first Virtual Reality immersive platforms with EON Reality called Ceek. Ceek is set to be released soon and its platform allows you to be at a place without actually being there using your virtual reality headset. Ceek simulates the communal experience by introducing a new format which totally eliminates static entertainment, and transforms communal events into exhilarating and dynamic environments. This can be enjoyed in the comfort of the user's own home.
For investors it is prudent to be familiar with new disruptive technologies. Therefore it is important to learn all you can about virtual reality. However, I can assure you that it is wise to watch this sector as it may be prudent to get in early before the release of Facebook's Oculus Rift.
"Virtual Reality to Become the Next Major Computing Platform after Mobile"
In July 2014 Oculus Rift will begin yo complete its first pre-orders for hardware. Most of these shipments will be to software developers. As of early July the company had over 45,000 pre-orders for the device. Once the hardware is shipped to developers it will begin working on the software side. The company has decided to push back the hardware launch to give developers time to create software to go with it. The official consumer launch is expected to happen sometime in 2015.
Virtual Realty technology is expected to become mainstream as the product uses go well beyond video games. Additional markets can extend to watching sporting events from home and feeling as through you have court side seats. They can be used in education. As online education becomes more prolific, having a classroom experience and even group discussions with people from around the world, right from your sofa. The technology will go far beyond the VIOP chat where you can see the person you are speaking with. It will transport you to the school and you will feel as if you are sitting in the classroom.
Mark Zuckerberg, the CEO and founder of Facebook, expects the technology to become mainstream. He is predicting that virtual reality will become the next major computing platform after mobile.
Proactive investing will give shareholders the ability to participate in the virtual reality industry as it matures, while stock prices are still low. I would consider the virtual reality sector still speculative but also accompanied by plenty of reward. It's important to note stock prices will begin to reflect their leadership role in the industry. Himax is positioned to grow over the next several years as Oculus Rift and Google Glass will have fully launched.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.