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Vuzix and Google thoughts ?3

13:44 02-Jul-20

Vuzix has updated today, saying that its M400 glasses have been cleared for sale in China.  Although the press release highlights business continuity applications, one could certainly also imagine that the facial recognition I mention below could come into play in Hong Kong and elsewhere.

Separately, E.U. regulators began examining Google's purchase of Fitbit, as expected.  The 11-page questionnaire signals that this inquiry could wind up being at least as serious as the one to come in the U.S.

I held my commentary on the latest press release from Vuzix for the completion of discussion with a top orthopedic surgeon on the matter.  He says:

I think the use of AR in surgery is going to be a big deal. Arthroscopic surgery is huge and I can see value there. I do a ton of surgery with fluoroscopy (live x-rays), and the ability to accurately superimpose the x-ray into the area I'm working would be huge. It's getting to the point where a *lot* of surgery is augmented by technology with some sort of visual component

When I queried further about just using a monitor versus glasses, he added:

Even when they're arthroscopic and largely on the monitor, we still frequently look back and forth at the limb a bit. Would also increase the intuitive ability to perform if AR was showing you a "real" view of where your instruments were, etc. Hard to have your neck bent 90 degrees and be working in a weird upside down position based on camera angle, etc.

So, Vuzix is documenting a socially important real world use case.  However, according to the AHA there are just over 6K hospitals in the U.S. and I'd guess that only a fraction of those are sites for major surgery.  This means that even world wide, I'd expect the device volume for surgical applications to be in the single-digit thousands over the next few years, which is hardly game changing.  Facial recognition and fever screening have greater potential, especially with the U.S. continuing to hit new records on daily new COVID-19 cases, and increasingly authoritarian response as protests across the country fail to achieve focus (see final paragraph).

Another reasons to update my thoughts on Vuzix now, is Google's acquisition of smart glasses maker North.  In the process, North is discontinuing support for its existing devices and not shipping the next iteration, which helps confirm both the importance of smart glasses and the viewpoint that the money is in adding intelligence to them, rather than the devices themselves, at least for the near term.  There will come a point where that changes though.  The value in big data was enabled by ubiquitous smart phones, and always-on cameras would be another step in that evolution.  Thus my interest in Vuzix remains, but still not at this price point.  It bears reiterating that the mass manufacturing stage of development that Vuzix is approaching is deceptively hard.

For Google, the North purchase is about getting the technology, people and patents, not the devices.  It's more necessary diversification away from advertising, which is seriously threatened.  Furthermore, anyone who thinks the prospect of breakup is idle or insignificant wasn't around at the turn of the millennium.  GOOG remains the best mega-cap for those wishing to dance to the extended stimulus music.  Even if this morning's jobs report confirms the rebound indicated by ADP, larger portfolios should be more concerned about being caught without a chair when the music stops.  So, I chose to rely instead on bonds, utilities like CWEN(A) & AES, real estate and patience.  Enjoy the long weekend, everyone!

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