Microsoft Corporation

VIRTUAL REALITY

PREFACE
The world changing technologies have surrounded communications and transportation.


While there are some amazing technologies proliferating, like streaming video on demand, or self-driving cars, none of these will actually change the world. But there is one movement, one technology that is the next step both in the communications revolution and the transportation revolution.


Of course, we're talking about virtual (and augmented) reality and two mega caps, Microsoft (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ:GOOGL) have gone to war to own it.

THE PRIZE
Together VR is projected to hit $150 billion in yearly sales by just 2020, according to a study by digi-capital:



But those numbers are too small and here's why:

WHY IT'S SO BIG
We can sit in the same room as a family member 10,000 miles away. Have a meal with anyone we know at any time in any place. We can sit on the 50-yard line at the Super Bowl. We can sit front row at the State of the Union. We can visit Mars, be an airplane pilot, and go to an African Safari.

Further yet, we can treat anxiety disorders, phobias, even expand the reach of education and further children's imaginations, even adult imagination. Not to get crass, but even sexual encounters will be possible from anywhere at any time. Touch, the physical sense, is now possible. Here's a little image from MIT:



It's that real. Sight, hearing, and touch have already been conquered.

Virtual and Augmented Reality technology is moving so fast, that when we're with someone miles away in a VR experience, it doesn't look like a video game or animated rendering, it's real. If you've never experienced it -- go to a demonstration and feel the enormity of these realties within 15 seconds. It's that powerful and it's that obvious, that quickly.

WAR: MICROSOFT
Microsoft wants to do for virtual reality what it did for PCs, which is, make it as ubiquitous as possible. Every household, every workplace, everyone has it, uses it, depends on it and lives by it.

Microsoft has created its Windows Holographic platform with an eye to turning it into the standard operating system for virtual reality, like it did with Windows when personal computers first hit the market.

Here's what Microsoft presented at Computex:


This is a different and far more combative strategy than Microsoft initially appeared to be pursuing, which was to sell its HoloLens headset and let it compete with Facebook's (NASDAQ:FB) Oculus, HTC's Vive and Apple's soon to be named VR product.

With Microsoft Corporation (NASDAQ:MSFT), its Windows Holographic is described like this:


Bloomberg wrote:


In other words, rival headset makers can connect to Hololens and each other through the new Windows platform. Intel, Lenovo, Dell, Acer, HTC and ASUS have already signed on to use Windows Holographic. But then there's Google.

WAR: GOOGLE
At its most recent I/O conference, Google introduced the idea of its new headset called Daydream. The combative stance from Google is one that focuses on smartphones with a headset that turns existing phones into the screen.

Google's open source Android mobile operating system dominates the smartphone world. Sticking with its open source strategy, even though Google is participating in the creation of "Daydreams," it will also provide the designs for hardware to Android phone makers so they can produce and sell their own versions.

Here's a great take from CNN Money, when they write:


So, while Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), International Business Machine (NYSE:IBM) and China's Baidu (NASDAQ:BIDU) are already in the space, it's these two tech giants that are each making a bet on the future of VR -- one is PC based, one is mobile.

Now we get to choose which one will in. Of course, there is another approach -- to find the technology that will power all of it, regardless of the operating system that wins.

WINNER
This is the opportunity so many investors say they welcome -- say they search for. The opportunity to find the "Next Apple," or the "next Google." We listed a number of tech giants above, but all of them, every single one, are totally and utterly dependent on the back bone of VR -- and that is computing speed.

VR is now "here again" for one very simple reason. One technology company has finally broken the barrier in providing the enormous computing power to make all of these grand statements a reality. What the public, you and I, will not tolerate is a rendering of our augmented or virtual realities that isn't absolutely 100% real. As a populace we no longer have the patience or interest in graphics that look like the 'Atari.'

We want it real -- not a rendering of real. And that is now possible. It isn't Artificial Intelligence, it's Artificial Superintelligence.


One company is this backbone, and it stands to gain the most from Virtual reality, which will in fact be the most important technology ever, until the next step forward.

WHY THIS MATTERS
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Thanks for reading, friends.