Please ensure Javascript is enabled for purposes of website accessibility

Dolby's Glasses-Free 3-D: Will It Matter?

By Steve Symington - Apr 10, 2013 at 9:21PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Dolby and Philips just announced a new glasses-free Dolby 3-D format. Can this help 3-D viewing finally succeed at home?

Do you remember much from the 2010 Consumer Electronics Show?

Yeah, me neither. The one thing I do remember, however, is that 3-D television was heralded as the next big thing.

Of course, we all know how that turned out: Despite the best efforts of such retailers as Best Buy (BBY -1.03%) to stir demand for the latest and greatest 3-D sets from the likes of Sony (NYSE: SNE) and Panasonic (NYSE: PC), the technology fell flat as consumers were largely resistant to wearing the expensive glasses required to make it work.

Even then, after Toshiba introduced one of the first glasses-free 3-D TVs to the market, the product was still prohibitively expensive and, simply put, not compelling enough to convince the masses it was worth their money.

Even so, wildly popular 3-D movies like Avatar proved audiences are more than willing to watch good 3-D content if the venue is right. From an investors' standpoint, then, many of us couldn't help but wonder what it would take for 3-D viewing to actually succeed on a wider scale in our homes.

Enter Dolby 3D
That's why I'm so intrigued by Monday's news that Dolby (DLB 1.12%) and Philips (PHG 1.66%) have collaborated in a joint project to create a new content delivery specification for the Dolby 3D format, which will be part of a "suite of technologies" to more easily allow content creators the ability to make, deliver, and play back glasses-free 3-D content.

To help pitch the use of Dolby 3D, Dolby and Philips enlisted content creation specialist The Foundry, who will integrate the format into its widely used postproduction software products NUKE and OCULA. Incidentally, those products are the same ones behind Avatar's ridiculously cool 3-D effects, so it's telling that The Foundry is willing to open the door to Dolby 3D in its own solution.

In addition, Dolby management claims the new Dolby 3D format is "a crucial milestone in clearing the hurdles to easy and customizable 3-D viewing on TVs, tablets, smartphones, and laptops." With that in mind, while the tech isn't quite there yet, it's reassuring that Dolby and Philips seem to have the right idea. So, if glasses-free 3-D viewing does eventually find a place in consumers' homes, Dolby 3D's head start will go a long way toward ensuring it will play a big part.

Another dimension for Dolby
While this can't be bad for Philips, I'm sure I can't be alone in appreciating this as yet another way Dolby is working to diversify its operations away from its former core business in the relatively stagnant audio format market for PCs and other consumer electronics.

Couple that with the fact that Dolby is currently trading at just 14.6 times trailing earnings, boasts a decent return on capital of 18.3%, and had $743 million in cash reserves with no debt at the end of its most recent quarter, the stock is starting to look like too good a deal to pass up.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dolby Laboratories, Inc. Stock Quote
Dolby Laboratories, Inc.
$75.85 (1.12%) $0.84
Koninklijke Philips N.V. Stock Quote
Koninklijke Philips N.V.
$25.14 (1.66%) $0.41
Best Buy Co., Inc. Stock Quote
Best Buy Co., Inc.
$83.90 (-1.03%) $0.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.