Google's $1,500 Wearable Tech Test Makes Sense

Google makes Google Glass available for sale.

May 14, 2014 at 10:15AM
Longview

U.S. stocks are slightly off yesterday's all-time high on Wednesday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) down 0.20% and 0.30%, respectively, at 10:15 a.m. EDT. In company-specific news, serial innovator Google (NASDAQ:GOOG) is finally making its intelligent spectacles, Google Glass, broadly available -- although at a retail price of $1,500, it does not yet qualify as a mass-market product. The launch could constitute a major milestone in the nascent wearable devices space -- even if Glass never achieves widespread adoption, the launch is another example of Google's clever approach to product development and marketing.

One month ago tomorrow, Google held a one-day "flash sale" of Google Glass, the eyeglass-shaped digital device that responds to voice commands and places a miniature screen just above the user's right eye (see below -- it's the latest look in cyborg fashion!). Although Google did not release any sales data for that event, it must have been satisfied with the results -- indeed, in a post on Google+ on Tuesday afternoon, the company announced it will sell the device to anyone willing to fork over $1,500.

Google

Source: Wikimedia.

Not coincidentally, the first rubric that appears on the Google Glass Web page to explain what it does is "Be Active," which highlights applications relating to sports and physical fitness. Arguably the first successful wearable devices -- barring the wristwatch -- were heart rate monitors and GPS navigation systems for sporting and outdoor activities. Those remain niche products, however; the key to a mass-market product is offering functionality that everyone wants or needs.

As far as everyday uses for Google Glass, they're the same as the most basic functions of a smartphone, including making calls and sending text messages, taking pictures and recording videos, Web search, news, and so on.

I'm far from convinced that Glass will become a mass-market product. In fact, I'm not sure even sure Google believes that -- at a multiple of the cost of the most expensive cell phones, the price is currently prohibitive in terms of that goal (although we know that prices of new consumer technologies fall quickly over time -- assuming they find enough demand, of course). The reviews I have read suggest Glass isn't a must-have technology at this stage; it will most likely require several product development cycles before it can even vie for that title.

However, the general release of Glass gives Google the jump on rivals including Apple (though not on Samsung, which is already selling a smartwatch) in terms of understanding how people want to use wearable technology. In that regard, this release is just another milestone in Google's sophisticated approach to product testing and innovation. Given the opportunity wearable technology will ultimately represent, it makes all the sense for this Silicon Valley innovator to be pushing forward in this area.

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Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Google (C shares). The Motley Fool owns shares of Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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