Facebook's (NASDAQ:FB) Oculus is the leader in virtual reality and executives cite the pandemic as a tailwind for the segment. It's still early days in the business of selling VR headsets, but are tech investors underestimating the potential for this consumer technology?
Corinne Cardina, Fool.com's healthcare and cannabis bureau chief, spoke with Nick Sciple, the bureau chief of tech, energy, and industrials, on a Fool Live episode recorded Feb. 11, about why Oculus could be a future growth driver for the social media network, but won't be devastating for investors if its potential doesn't pan out.
Corinne Cardina: We did promise a quick chat on Oculus. Nick, I am not super familiar with virtual reality (VR) as the resident healthcare person. I imagine they've said the pandemic has been a tailwind for the segment because it connects people in the new immersive way. Have you actually put on a virtual reality headset? Apparently, it was a hot holiday item, according to Facebook.
Sciple: I have not, but every single person that I've talked to that has, has said, it's incredible and we've reached the point where we've had hit the inflection point. There's this idea that when I think of brands in virtual reality, I could name you and other brand with the exception of Oculus. Facebook has the ability to just plow massive amounts in the research and development to build up the platform. The other thing is Facebook needs to build up some app store or operating system of its own. We talked about this threat from Apple and Apple's controlling of that ecosystem and the threat it provides to Facebook. This gives Facebook the opportunity if VR really is something that gains traction and they can become the leader, it gives them the opportunity to really control their own hardware stack and maybe escape from the Apple issues there. I don't think the market is pricing the opportunity for VR as much as it should. I'm really excited about that part of the business, but even if VR becomes nothing, I'd still think Facebook can be a great investment for you going forward. An exciting area to watch lots of potential, but it's not thesis-crushing if it doesn't work out.