The Wall Street Journal is reporting that Microsoft Corporation (NASDAQ:MSFT) may be looking to get into the wearable tech market, with the company presently testing prototypes that could, in theory, compete with Google’s Glass. While privacy issues immediately presented themselves when Google Inc (NASDAQ:GOOG) first introduced the Glass, those concerns have largely given way to anticipation and possibility. The question for Microsoft Corporation (NASDAQ:MSFT) is: can they make it work? It’s been some time since the company has done anything truly revolutionary and at times, despite Windows, it struggles for relevance.
Microsoft contact manufacturers
Citing sources close to the project, the WSJ is reporting that Microsoft has contacted numerous Asian component manufacturers to provide the Washington-based company with cameras and other necessities for the device. While wishing to remain anonymous, the source cautioned that there is a strong chance that these prototypes will never see mass-production.
Juniper Research wrote last week that wearable tech may reach $18 billion in sales within five years, and Microsoft, who is currently reorganizing its company to concentrate on “devices and services” clearly doesn’t wish to be left out in the cold as others look to offer something that consumers will spend their hard earned $18 billion on in the coming years. Market-research firm ABI Research expects annual sales of wearable devices will reach 485 million units by 2018.
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Microsoft is “determined to take the lead in hardware manufacturing to make sure the company won’t miss out on the opportunities in the wearable gadget market,” the spokesperson said. This, of course, makes tremendous sense given the reversal of fortunes seen by companies like Apple and Samsung as Microsoft as seemingly sat back and watched.
The construction of these prototypes underlines Microsoft’s willingness to get into the game and compliments its Nokia Corporation (NYSE:NOK) handset division acquisition. It could also join its slow-selling Surface and Surface 2 tablets.
Microsoft Corporation (NASDAQ:MSFT) will need to get in early in the “Glass” market if it hopes to reap the profit margins of the new technology. Competition will clearly lower the price of any “Glass,” and it must give some investors a bit of optimism in the recently listless firm.
“The wearable trend has the potential to boost the currently thin margins of consumer technology products by allowing tech brands to price their products at the kind of premiums normally reserved for fashion accessories,” said HSBC analyst Jenny Lai.