The Best Google Glass Stocks (Part 2)

Wearable Technology Investments

By Jason Stutman   

Earlier this week, I shared with Energy and Capital readers one of the best Google Glass stocks.

And today, I'll share with you one more.

But first, I want you take a look at the following image:

logitech growth

See the peak on the blue line? Those are gains of about 1,700 percent.

The chart above compares the growth of two well known tech companies. I'll tell you the names of those companies in just a second.

One of these companies has the sixth largest market cap of any publicly traded stock in the world. It is also the largest software producer to ever exist.

The other company makes keyboards and web-cams.

Can you guess which is which?

The time-line here begins at the launch of Logitech (NASDAQ: LOGI) as a publicly traded company. And if my hints weren't blatant enough, that other company is Microsoft Corporation (NASDAQ: MSFT).

Logitech is represented by the blue line, Microsoft by the green.

Ignoring reinvested dividends, investors who jumped in on Logitech in 1997 are looking at higher gains today than those who bought Microsoft at the same date.

And those that got out at the right time could have turned $10,000 to nearly $180,000 in just a little over a decade.

Imagine an opportunity to do the same...

Logitech is a computer peripheral company, meaning its products connect to host computers and devices. The company produces a wide variety of devices ranging from speakers to web-cams to headsets.

Logitech's humble roots began with computer mice and keyboards – what were once the leading methods of computer input.

But technology input methods have changed notably since 1997, and the future of the conventional mouse and keyboard is incredibly bleak.

In its most recent annual report, Logitech has acknowledged a "dramatic shift" that has resulted in "significant weakness" and has "adversely affected" their traditional mice and keyboard sales.

This dramatic shift is almost entirely a product of touchscreen computing and the decline of desktop PC sales. And while Logitech is now offering ultra-thin keyboards that get a piece of the tablet market, the company's glory days are well behind it.

The fact is, touchscreens and declining PC sales are just the beginning of the end.

The real killer of the keyboard and mouse will be wearable technology. And investors like you and me stand to profit from that funeral...

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Peak Portability

Quite possibly the greatest driver of computer technology over the last 70 years has been the steady demand for increased portability.

Though the history of mechanical computing dates back to the early 19th century, the world's first programmable and digital computer was completed in Berlin in 1941.

This computer was known as the Zuse Z3, and it looked something like this:

z3

If you're thinking that's a big computer, I couldn't agree with you more – the Z3 weighed about 2.2 thousand pounds.

To provide a bit of perspective, that's about 9,000 iPhones. Not to mention, the Z3 took 3 seconds to perform basic multiplication and could only memorize 1.4 thousand bits of information.

That might sound like a large number, but only if you don't know the size of a bit – A 16 GB iPhone can handle about 138 billion bits.

The point is, while consumers want functionality, this goes hand in hand with a desire for portability.

And right now, there's nothing more portable than wearable technology.

Nike (NYSE: NKE) has already done it with fitness trackers, Google (NASDAQ: GOOG) is doing it with Glass, and Apple (NASDAQ: AAPL) will do it with the iWatch.

And I can promise you this: that high tech smartphone sitting in your pocket will soon be as outdated as the rotary phone.

Currently a $3 billion market, wearable technology is set to soar.

IHS research estimates a 250 percent increase by next year.

And Creddit Suisse forecasts a $30 - $50 billion market in just 2-3 years!

Speaking of Wearables...

Now, there are two specific mountains to climb when building a wearable device. The first of these is output (display), and the second is input (interface).

You can refer to The Best Google Glass Stocks (Part 1) for more investment opportunities in display, but below I will tell you about one of my favorite plays in input.

If we aren't going to use keyboards, mice, or touchpads, you're probably asking, "How will we control these wearable computers?"

It's a very important question for which I have two answers: motion and voice.

For opportunities in motion technologies, you can read my articles on eye tracking and biometrics.

But for the best play in voice recognition, just see the information below.

Nuance Communications (NASDAQ: NUAN) is the company behind the technology that drives Apple's Siri.

Nuance's technology allows users to have conversations with and give commands to a virtual assistant, eliminating the need for a keyboard and mouse. It can even recognize a user's unique voice and treat it as a password.

This technology will potentially act as a universal translator and will eventually be implemented in our everyday lives.

Imagine telling your front door to open or your fridge to give you a beer. Imagine turning on your lights, brewing coffee, and adjusting your thermostat with just the power of your voice.

The applications are virtually endless...

Speech recognition will be absolutely critical for controlling wearable devices, and Nuance has indisputably been the dominant player in this niche industry.

And though Google has developed its own voice recognition technology, other competitors in the wearable industry will look to Nuance as the leading provider. After all, Nuance's speech software is the highest functioning in the world.

In fact, many of the complaints surrounding Google Glass have been directed towards its recognition and command system – an issue I've yet to hear regarding Apple's Siri.

Nuance is currently trading just 5.58 percent above its 52 week low. For those that are long Nuance, this could be the best entry point you're going to get.

Turning progress to profits,

  JS Sig

Jason Stutman

follow basic @JasonStutman on Twitter

Energy and Capital's tech expert, Jason Stutman has worked as an educator in mathematics, technology, and science... Before joining the Energy and Capital team, Jason served on multiple technology development committees, writing and earning grants in educational and behavioral technologies. Jason offers readers keen insights on prominent tech trends while exposing otherwise unnoticed opportunities.

 

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