Facebook (FB - Free Report) has agreed to acquire New York-based startup CTRL-labs, as announced in a post by its vice president of AR/VR, Andrew “Boz” Bosworth.
While a CNBC report stated that the transaction is worth around $500 million to $1 billion, a company spokesperson quoted the deal size below $1 billion.
CTRL-Labs is developing a bracelet that decodes neuron activities of a user’s arm and translates it into a digital signal that computers can understand. This will enable a user to communicate and control computers. The company will be integrated into the Facebook Reality Labs team.
Reportedly, Facebook has been working on the brain-computing technology, since 2016, as part of its secretive Building 8 division. At F8 2017, the company announced its brain-computer interface (BCI) program, which aims at developing non-invasive, wearable devices that will let people type by simply imagining themselves talking.
In July, Facebook stated that it has made progress in developing such technology in collaboration with researchers from the University of California. A study related to the technology was also published in Nature Communications.
Facebook’s AR in Focus: A Key Catalyst
The latest acquisition is expected to boost Facebook’s AR-related ambitions. Notably, Digi-Capital forecasts AR technology to generate revenues of $70-$75 billion by 2023.
Reportedly, the company has inked a partnership with Ray-Ban creator, Luxottica, to jointly develop AR glasses.
Codenamed Orion, the smart glasses are being designed to disrupt the smartphone market when these hit the shelves between 2023 and 2025. The smart glasses will allow users to take calls, livestream on social media and many other features that are intended to replace smartphones.
Last month, the company announced that its Oculus Insight camera and tracking technologies will be used in future AR glasses, but didn’t reveal much about the hardware’s functionality.
Competition Intensifying in the AR Space
We believe Facebook is increasing its efforts to withstand the intense competition from Snap (SNAP - Free Report) , Google, Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) in the next-generation glasses space.
While Apple has been speculated for a long time to foray into the wearable AR glasses space based on its acquisition of Akonia Holographics, Microsoft’s latest MR-headset HoloLens 2 has helped it up the ante in the AR space.
Moreover, in May, Google rolled out an advanced version of Google Glass called Google Glass Enterprise Edition 2. Further, in August, Snap launched a new version of Spectacles smart glasses, which allow users to record photos and videos in 3D.
Currently, Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
(We are reissuing this article to correct a mistake. The original article, issued on September 24, 2019, should no longer be relied upon.)