The Best Ways to Profit From Google Inc (GOOG) Glass

Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) is only willing to produce integrated circuits if a company were to meet a minimum quantity threshold, which is something I illustrated in a previous article. It is likely that for Taiwan Semiconductor to manufacture in mass quantity, Google would need to sell at least 1.5 million units of Google Glass within a single year. This isn’t projected to happen until 2016 to 2017.

Because of this, it is definitely a toss-up between Intel and Texas Instruments over the short-term. This is because both Intel and Texas Instruments have a dedicated foundry, so it is an all-in-one solution. However, being all-in-one solutions costs more than the licensing model that Qualcomm currently provides. Therefore, it is likely that at least over the short-term, Intel and Texas Instruments will supply processors to wearable computing devices. However by 2016 to 2017, these companies may be forced to give up their niche, to Qualcomm and Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM).

Conclusion

Personally, I don’t really want Glasses that have a heads up display and an internal computer. However, I do think that the product will reach mainstream at some point. Leading up to the point of becoming a mainstream device, both Intel and Texas Instruments will be able to provide an all-in-one solution for Google.

When Google Glass reaches greater economies of scale, both Intel and Texas Instruments would become unnecessary middlemen. Google will eventually turn to Qualcomm’s technology and will run the manufacturing of systems on a chip through Taiwan Semiconductor Manufacturing. Therefore, investors would be best positioned by owning Google, Qualcomm, and Taiwan Semiconductor Manufacturing.

Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Google and Intel. The Motley Fool owns shares of Google, Intel, and Qualcomm.

The article The Best Ways to Profit From Google Glass originally appeared on Fool.com and is written by Alexander Cho.

Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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