Published October 16, 2016

Weekend Edition: Meet the Product That Will Replace Your Smartphone

Editor's note: There's an innovative technology that will replace your smartphone in the not-too-distant future.

In today's Weekend Edition, tech guru Jeff Brown, editor of Bonner & Partners’ Exponential Tech Investor, details this fascinating product...

As he says, “It will be prolific, pervasive, and profound for society. And the market could be as big as $120 billion by 2020”...


By Jeff Brown, editor, Exponential Tech Investor

Simplicity… ease of use… convenience… a meaningful improvement of some daily task or activity…

These simple things are the hallmarks of successful technology adoptions. The difference between a billion people using a new product or service or just 100,000 people. It’s the difference between a smash hit and a niche product offering.

And it’s how I identified the innovative technology that will replace your smartphone in the not-too-distant future.

Think about something as simple as the telephone. After it was introduced in 1900, it took about 50 years to reach 90% penetration in the United States, as a basic communications infrastructure was being built out. And when it was done, it greatly simplified and improved life.

Or the television… It took about 15 years or so for the TV to reach 90% penetration. This allowed people to receive real-time news, information, and entertainment from the comfort of their own homes.

The cellphone took about 12 years. This extraordinary improvement to our standard of living enabled communications and accessibility pretty much anywhere.

Once Apple came out with its revolutionary iPhone in 2007, it took less than eight years for pretty much everyone to have a smartphone of some kind or another. But what was really important here was that the technology was developed by a company whose background was in personal computers and software, not one of the giant cellphone makers.

All of these technological developments brought convenience, simplicity, and improvements to our everyday lives. But what’s next? Smartwatches, like the Apple Watch, are nice to have, as are fitness trackers like the Fitbit. But they are really not that transformative. The benefits received are simply not compelling enough for a billion-plus people to adopt.

When looking for products and technologies that have the potential to attract a billion-plus users, it’s critical to think about the things that most people do every single day. And today, communicating socially, sending messages, searching for and receiving information, and enjoying entertainment top the list of what modern consumers spend their time doing.

Just think of smartphone applications you and your friends and family use most often… They likely include apps for social media, messaging, and entertainment.

Following Facebook

Perhaps no company understands this better than Facebook. In 2012, Facebook acquired Instagram – and its 30 million users – for $1 billion. Instagram is a social media application that allows users to post photographs so others can see them.

Many thought the acquisition was crazy. But today, Instagram has over 500 million users and was recently valued at $35 billion. Not so crazy after all. A 35-times return on investment in only a few years. Incredible.

Facebook didn’t stop there. In 2014, it spent $19 billion to acquire an early-stage messaging application company called WhatsApp. WhatsApp simply allows users to send messages and pictures back and forth for free. It now has more than a billion users and is forecast to generate $5 billion in annual revenue by 2020.

A third acquisition that is much more telling about the future is Facebook’s $2 billion purchase of Oculus, also in 2014. Oculus is a pioneering company in a technology called virtual reality, or VR. As the name suggests, the technology revolves around computer-generated environments viewed through eyewear that blocks out the real world so that the wearer is immersed in a virtual world.

Oculus delivers VR experiences via an integrated audio and video headset that looks like this:

Oculus’ VR headset

Essentially, the headset is connected to an expensive personal computer system that can run highly immersive games, entertainment, and educational applications. If you haven’t tried one before, it creates a very realistic environment where you can feel physically in touch and more involved in the media that you are consuming.

AR Is the Future

The problem with virtual reality that requires headsets or expensive computers to power the experience is that it greatly limits where and how the technology can be used. It also limits the market potential.

This is where augmented reality, or AR, has an extraordinary advantage.

AR is just what it sounds like… technology that is used to augment the real world. It enables, through some form of goggles or eyewear, the user to see information, graphics, messages, etc. overlaid on top of his view of the real world.

And this is exactly why AR is the next smartphone, in terms of a consumer electronics product that will ship a billion-plus units a year.

You may remember the Google Glass product from a few years ago—one of the first attempts at selling AR to the public. It never achieved mass adoption, but most first-generation products don’t.

Google Glass

Just think of the first personal digital assistant, the Apple Newton, released in 1993. It was a fantastic product at the time, but it was large, bulky, black and white, required a stylus, and had no wireless connection to the internet. It just wasn’t compelling enough.

But Apple took that learning, combined it with a cellphone, and years later launched a product that revolutionized personal communications… the iPhone, of course.

While it certainly won’t take more than a decade for AR to reach that level, the important thing is that the technology has already taken many of its first steps toward mass adoption.

AR devices are like simple eyewear, so they do not limit or constrict a user. Quite the opposite: AR improves a user’s experience with the real world, it simplifies life, and it will save us time and frustration in doing simple tasks, like taking out a smartphone to check the weather, replying to a text message, or receiving a phone call.

Imagine this: You are sitting in a café enjoying your morning latte and a message comes in from a friend asking about dinner this evening. You can speak a command, verbally reply to the message with a response, and instruct the message to be sent. Just like that. Users wouldn’t even have to lift a finger.

Or how about this: Two friends are sitting in a park for their weekly chess match… but there is no chessboard in sight. They are both wearing augmented reality glasses, which look like normal glasses. Through this special technology, they can both see a chessboard in front of them and move the pieces on the board, just as if they were playing with a real chess set.

Imagine the work, educational, and gaming applications of a technology like this. Imagine schoolchildren studying our solar system being able to “fly” from Earth to Mars to Jupiter’s moons and learn about them in a deeply visual, immersive way.

The potential applications are nearly limitless, and the best part is that AR improves the basic things in life that we do every day. Communicating socially, sending messages, searching for and receiving information, and entertainment.

AR will quickly become the next computing interface, the next-generation computing platform, and a completely new way to experience data, video, information, and entertainment.

It will be prolific, pervasive, and profound for society. And the market could be as big as $120 billion by 2020.

Regards,

Jeff Brown
Editor, Exponential Tech Investor

P.S. Augmented reality is just one sector of technology that will someday bring life-altering returns to early investors. You can learn more about another world-changing technology with the potential to create fortunes for early investors by watching my brand-new video presentation right here.