Is Google Gearing Up to Unveil VR Headset at I/O 2017? – May 17, 2017

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Alphabet Inc.’s (GOOGL Free Report) Google is rumored to unveil a standalone virtual reality (VR) headset at its annual I/O developers conference on Wednesday.

The new gadget is expected to have advanced features compared to Google’s Daydream View headset. Unlike Daydream, the new headset is likely to be a standalone device and therefore doesn’t need a smartphone.

The most exciting feature seems to be “inside-out tracking,” a technology that eliminates the need of setting up external hardware to track user movement. Instead, the tracking device is placed inside the gadget.

In short, the headset is expected to have all required hardware embedded in it. Though information about the software powering the device is scant, it’s most likely to be Android.

We believe Alphabet’s continuous focus on innovation and technological prowess are contributing significantly toward driving up its shares, which have rallied 20.7% compared with the Zacks Internet-Services industry’sgain of 18.2% on a year-to-date basis.

Tango Offers Google Edge Over Others

Tango, called Project Tango during the test phase, is Google’s augmented reality computing platform.

The platform uses computer vision to enable mobile devices track their location without the need for GPS or any other external signal. It can be used to develop user experiences such as 3D mapping, indoor navigation, physical space measurement and environmental recognition.

Alphabet Inc. Net Income (TTM)

At CES 2017, Google unveiled the first phone that features both Tango depth sensing cameras and Daydream virtual reality, hinting at a potential merge of the two systems. We think Google might have come up with something on those lines in the new VR headset to gain an edge over other similar devices like Facebook’s (FB Free Report) Oculus Rift and HTC’s Vive.  

Also, if rumors are to be believed, Google will be joining Microsoft (MSFT Free Report) , Facebook and HTC in the race to build “inside-out tracking.”

Stupendous Growth Expected in This Market 

According to IDC, the augmented and virtual reality headset market is anticipated to grow at a compound annual rate of 58% worldwide with shipments reaching 99.4 million units in 2021. Also, the research firm claimed that revenues from VR headsets will grow from $2.1 billion in 2016 to $18.6 billion in 2021.

Jitesh Ubrani, senior research analyst for IDC’s Mobile Device Trackers, said, “With all the technological enhancements, there will be a wide range of products and price points.”

The strong growth projection is encouraging for the likes of Google. With the future of the AR/VR headset market looking more than promising, Google’s VR headsets could add to its coffers going ahead.

Bottom Line

Importantly, the AR/VR space is still at a nascent stage. Therefore, companies like Google, Microsoft and Facebook are all vying to grab a significant share of the market.

Given the continuous efforts toward releasing and upgrading products in this space, it will be interesting to see who manages to attract consumers.

Zacks Rank

Alphabet currently carries a Zacks Rank #2 (Buy). Another stock worth considering in the broader technology sector is Monolithic Power Systems, Inc. (MPWR Free Report) , carrying the same Zacks Rank as Alphabet. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term expected earnings per share growth rate for Monolithic Power is 17%.

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Source: einnews.com