I was wrong.
Really missed the big picture on this one.
Was guilty of thinking like everyone else.
The thing I missed though doesn’t mean the next of $1 trillion+ tech boom we’ve been forecasting isn’t going to happen though....
It means it’s going to be even bigger.
Mark Zuckerberg Has Seen the Future...
Mark Zuckerberg pointed out what your editor was missing. In so doing he revealed the next catalyst for major technology development.
When speaking a conference in Barcelona earlier this year, Facebook’s (FB) founder said, “[Virtual reality is] definitely future technology and that’s not mainstream consumer thing today, but I believe that kind of continues the trajectory going from text to photos to videos to fully immersive scene that you can be a part of…”
That right there says it all. Virtual reality.
It’s going to be massive. Far bigger than anyone outside of the top tech visionaries right now.
And I can tell you he’s right on this one from personal experience.
On Monday the box from Amazon arrived at my doorstep.
There were a couple books in there I was pretty excited about. But I just threw those to the side.
My focus was on the virtual reality gear I ordered.
Honestly, I had no idea what to expect. But my expectations were about as low as the price of it all.
The total out-the-door for the headset was about $26 with taxes. That’s it.
The promises, however, were quite high. Transport yourself into a virtual world for the cost of a decent steak.
Too good to be true?
Well, it was and it wasn’t.
Within about 15 minutes of opening the box, getting the headset set up (image below), and downloading a virtual roller coaster app for my Samsung Galaxy phone, I was in the front car (no line!) listening to the clicking sound of the chain dragging me to the top of the initial hill.
I could see everything everywhere. You can look left, right, up, down, and behind you and see every aspect of the virtual world. All from a free app.
To be clear, it was more interesting than exciting though. Nothing like the real thing. No G-forces or thrills.
So I tried again. Next I downloaded the “Battle 360” app, inserted my phone into the headset and was immediately transported to being a Navy ship gunner with Japanese Zeros coming in from all angles.
That was much cooler. Here’s a sample video of the game if you’d like to check it out.
But again, I’m not much for video games and after about 20 minutes I closed the app and pretty much knew I’d never play that game again.
It was a nice break. And quickly I got back to work and then realized that I was dead wrong about the next big tech trend…
It was going to much bigger than I thought.
The Next Big Tech Race Just Got Even Bigger
If you recall over the summer, your editor predicted the global data boom as one of the next big investment trends.
As we noted in The Next $1 Trillion Investment Wave Has Begun
[Online video] is driving data consumption parabolic and it’s going to take massive capital investments to meet this demand.
We’re talking trillions here.
Remember dial-up? You’ve probably happily forgotten about it by now. Only 3% of U.S. population still has it. Broadband has been the standard for years.
That transition didn’t happen quickly or cheaply though.
According the Broadband Association, the switch from dial-up to broadband cost an estimated $1.3 trillion spread out over the last 15 years.
That was a relatively small project compared to what’s going to be required in the years ahead.
After all, the U.S. consumed about 0.04 exabytes per month in 2000 when dial-up was the standard. Today they’re using 4.2 exabytes of data.
That’s an increase of 10,400% in 15 years. But it was only an increase of 4.16 total exabytes of per month.
In five years data consumption will grow another 20 exabytes per month.
That’s five times more data needed in one third the time and why we expect data network infrastructure to be a major trend in the years ahead.
All that was based on simple factors you, me, and everyone else can in our daily lives.
It’s all really simple too.
The boom is plain to see as we showed you in this chart:
Those are the types of growth numbers which have made the cloud computing sector such a big winner over the last few years. And continuing to drive them in a tough market and stagnant economy.
But all that, frankly, is precisely what I was missing.
You Have An Edge Or You’re Dead
You see, all of this information was known. Widely known.
The information is largely priced into the stocks which will benefit from it all.
That makes predicting the future pretty easy and predicting future stock prices much harder.
It’s easy to say mobile data growth is going to be big. Just like self-driving cars and, in this case, virtual reality will be big too.
Making money from it all is the hard part.
You have to have an advantage in the markets.
In the tech world, that advantage is seeing something big coming and getting in as early as possible.
That big thing I missed at the time when researching the data boom is virtual reality. More precisely, the impact on virtual reality systems on data consumption.
Here’s what I mean.
Now, I’m hesitant to even mention the term “virtual reality” to you. It’s been the technology of the future for decades.
Some recent changes, however, will make it a very common thing. Like the prices dropping (I had my experence for $26) and steady quality improvements.
Digi-Captial estimates the virtual reality equipment market will reach as high as $120 billion by 2020.
The companies making virtual reality a reality are pushing it forward too.
Facebook paid $2 billion for Oculus, a leading virtual reality company, a couple years ago. Alphabet (GOOG), parent company of Google, put big money into virtual reality start-up Magic Leap technology. Samsung launched “Gear VR.” Microsoft (MSFT) is betting big on the HoloLens. And on and on.
That $120 billion isn’t big enough to get the investor in me too excited though. Frankly, if Google ships an extra billion dollars worth of virtual reality equipment in 2020, it will likely mean the difference between a $700 stock price and maybe $720.
Too small to even worry about.
The big impact of virtual reality - and the one the market hasn’t realized yet - will be in data consumption.
Just think of the exponentially more data needed to create a full-fledged, 360 degree virtual reality world.
One hour of an HD movie on Netflix requires about 1 GB of data. An hour of Super HD video from Netflix takes about 4 GB of data.
All that, however, is just for one screen.
In order to send a virtual reality world likely take more than 50 or 100 times more video area than HD video on a TV or laptop.
That’s an absolutely massive difference.
So although I don’t expect virtual reality to be a standard (my experience was good, but not “this is easily the next big thing” level great), it will add another layer of demand onto data networks which are already stretched thin and must be expanded.
That right there is what it will take to make the data consumption boom into an explosion.
And since most un-Zuckerberg-like analysts don’t get virtual reality, or it’s potential impact, or how fast it’s coming, that’s your edge too.