The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First.

 Alphabet Stock Forecast

Summary:

• GV or Google Ventures invested $30 million in plenoptic camera maker Light last July. This was a bet on the future of photography, videography, and Virtual Reality cinema.
• Light’s pocket-sized revolutionary L16 Light Field camera product promises DSLR-quality photography for just $1,699. It has sixteen lenses, each with 13-megapixel sensor.
• The Android-based Light L16 can output 52 megapixel photos and shoot 4K videos. YouTube content creators could benefit from Light L16.
• Light’s proprietary optics and computational imaging technology could help Alphabet improve its Nest security cameras.
• The Light L16 has not yet made its commercial debut. However, Foxconn and Sunny Optical are the manufacturing partners.

Alphabet (GOOG) should spend more to help accelerate mass production of the Android-based, Snapdragon 820-equipped Light L16 plenoptic camera. Plenoptic or Light Field imaging is the future of photography and videography. Taking full control of Light could allow Google to disrupt the traditional camera/camcorder business of Canon (CAJ), Nikon (NINOY), and Sony (SNE).

Alphabet’s venture capital subsidiary, GV (Google Ventures), invested $30 million in Light last July. Buying out the other eight investors (who invested $35 million prior to GV’s entry) of Light should be no problem. After which, Alphabet could invest on an economies-of-scale facility to help cut down the $1,699 price tag of the L16 camera to below $900.

A hefty price reduction could help Light Field cameras gain more mainstream adoption. Alphabet muscling in the consumer digital camera business is not a moonshot undertaking. IC Insights estimates that the stand-alone camera industry currently dominated by Canon and Nikon is still predicted to account for 27% of the $77.8 billion 2016 camera systems market.

The rise of Android and iOS Android phones is already killing the pocket digital camera market (but not the DSLR). It is time Alphabet try promoting Light Field cameras as compelling alternatives to the bulky, expensive interchangeable-lens DSLR cameras made by Canon and Nikon. Aside from mirrorless cameras, there’s no other worthy alternative to the mirror-based DSLR.

CIPA still estimates that around 13 million digital cameras will be sold this year, half of them with interchangeable lens. With an average selling price of $700, I estimate that the camera industry is still worth at least $9.1 billion/year. That is just for cameras, it still does not include the interchangeable lens market.

Alphabet’s Android-equipped phones helped diminish the appeal of compact fixed lens digital cameras. I look forward to Alphabet also using the Android-equipped Light L16 plenoptic camera to diminish the appeal of DSLR cameras made by Canon and Nikon.

The digital Single Lens Reflex camera debut in 1999.  It is a derivative design inherited from film-based SLR cameras used since 1960s. Amateur and professional photographers deserve lighter and more cost-efficient alternative to the bulky DSLR (Digital Single Lens Reflex) camera and its pricey lenses.

The Light L16 has sixteen 13-megapixel lenses/sensors. It is capable of ‘shoot now, control focus later’ for flexible Depth of Field control. The L16 has 28mm, 70mm, and 150mm camera modules that fires simultaneously (up to 10 lenses depending on situation) to capture a picture. Unlike a DSLR camera, a photographer has no need to change lenses when using the Light L16.

(Source: light.com)

Light Field For Virtual Reality

Light Field cameras are also complementary to Alphabet’s huge interest in Virtual Reality/Augmented Reality. Lytro, another pioneer company who is into plenoptic imaging, announced last April that it was quitting the consumer segment to focus its Light Field technology for Virtual Reality Cinema. Light’s L16 is the only remaining consumer-centric Light Field camera.

Going forward, I also believe Alphabet’s investment in Light Field will also eventually be useful in Virtual Reality products. There will come a time when Virtual Reality headsets become affordable enough that they will gain mainstream acceptance. Once Virtual Reality becomes as popular as 2D movies and TV Shows, there will be a massive need for Virtual Reality-enabled cameras who can produce content for the masses.

Sold Out Until 2017

The Android-based Light L16 is still in development/production.  However, strong interest from the public has already rendered it as sold-out until 2017. Foxconn and Sunny Optical have signed up to help manufacture the L16. Light’s engineers are still likely fine-tuning the computational software to combine the images produced to 52-megapixel resolution. The device uses Qualcomm’s (QCOM) Snapdragon 820 ARM-based processor and Light’s proprietary ASIC processor.

I am a freelance photographer/video editor/graphic artist. I greatly appreciate the incredible concept presented by the Google-backed Light L16 camera. I doubt if it could produce images as sharp as my Canon 6D but it sure is very practical.

(Source: light.com)

With 16 integrated lenses and 5x optical zoom, the pocket-sized Light L16 is ideal for photojournalists, street and event photographers. With its 4K video capture, it is also ideal as a back-up camcorder for YouTube producers and home-based videographers.

Conclusion

I hope Alphabet will really acquire 100% control of Light. This will allow the company to leverage Light’s Light Field Camera technology for Virtual Reality and photography/videography. If Alphabet dared to spend $3.2 billion for thermostat-maker Nest, I would think that spending $50-$200 million to acquire Light would just be spare change.

I believe that the multi-lens computational imaging technology of Light has great potential for the $25 billion/year video surveillance market. The problem with surveillance closed circuit TV products right now is that they often produce low-resolution images. The 52-megapixel still image and 4K resolution video capture technology of the L16 should produce crystal-clear images for easy identification of people recorded by future Google’s Nest Cam home security cameras.

I rate Alphabet as a Buy. This company found a viable (not moon-shot) long-term investment in Light. The computational algorithmic forecasts of I Know First also agree with my Buy recommendation for GOOGL.

Past I Know First Forecast Successes with GOOGL

I Know First has been bullish on GOOGL in past forecasts. Since then, GOOGL has been up more than 7%.

This Forecast was sent out to I Know First subscribers on May 27th, 2016. To subscribe now click here