Aquila Could Be Big for Facebook Stock
Let’s face it: in order to keep growing, Facebook Inc (NASDAQ:FB) needs more connected users. The key word is “connected.”
There are millions of people around the world without running water; imagine how many there are without Internet. To overcome this problem, while getting a chance to show off a combination of technology and altruism, Facebook has come up with an original solution that could literally take off.
Ultimately, it’s a solution that can only boost Facebook stock in the long run and it has a name: “Aquila” (which means “eagle” in Italian). Aquila is nothing short of a drone that brings Internet to people from the air.
In a world where countries like Australia appoint a cybersecurity minister, the time may have come for Internet-delivering drones and Facebook’s Aquila has accomplished its first mission. The high-flying, long-range solar plane designed by Facebook has the potential to bring the Internet to 1.6 billion people now living in places without remote access to mobile broadband networks.
Aquila’s success may yet be too far away to affect Facebook stock now. However, Facebook shareholders who are in it for the long run should appreciate this achievement. (Source: “Australia Now Has a Cyber Minister,” Gizmodo, July 19, 2016.)
What You Need to Know About Aquila
The Facebook Aquila has completed flight testing to a 2,150-foot cruising altitude. It used up just 2,000 watts of power, which is the same amount required to run a hair dryer or microwave oven. The project is part of “Connectivity Lab,” a program focused on building new technologies—including aircraft, satellites, and wireless communication systems—with the ultimate goal of bringing the Internet to the most remote areas of the planet.
During the low-altitude flight, the solar airplane remained in charge for 96 minutes (more than three times longer than the minimum required for this mission), allowing Facebook to collect valuable data to improve the project.
The Aquila drone, after testing, should be able to fly nonstop for three months. It uses lasers to beam Internet access to targeted areas without any need for additional infrastructure. That’s why it’s so brilliant. (Source: “Facebook’s solar-powered internet plane takes flight,” The Guardian, July 20, 2016.)
Facebook has not become as popular in Africa as elsewhere, though. The continent simply has too spotty an Internet capability, other than in the urban areas of North Africa. Aquila will need time to develop in this area and elsewhere, but it’s a long-term profit-generator.
So, Facebook stock will not be making any big moves soon but it is a project with long legs; the strategy has no flaws in the tradition of “if the Mountain doesn’t come to Mohammad, Mohammad goes to the Mountain.”
In terms of connectivity on Facebook, for Facebook membership to surge, the company must target the huge potential of users in Africa and Asia who still lack reliable Internet access. Aquila is a prototype now, but it has a great potential in areas that lack even basic infrastructure, suggesting it could provide a huge boost to Facebook’s userbase in the future. It’s the sort of project the United Nations and other humanitarian agencies can get behind and finance—but it could also be Facebook’s greatest contribution.
As for more immediate Facebook stock movers, the company has avenues in the virtual reality (VR) business, starting with its “Oculus Rift.” Facebook had the vision to acquire the Oculus VR LLC startup for $2.0 billion in 2014. Now, it is time for this purchase to pay off. By all accounts, given the success of the augmented reality (AR) “Pokémon Go” app, VR and AR will be huge sellers moving forward and the Oculus headset is already on the market for a competitive price of $600.00 (plus the cost of other related and required equipment).
Sales haven’t taken off yet, but analysts expect VR to become an industry worth $100-billion-plus annually by 2020. (Source: “It Doesn’t Look Like Virtual Reality Is a Thing Yet,” Fortune, July 5, 2016.)
Where Facebook is concerned, virtual reality goes well beyond the equipment. The company expects VR to become a fundamental component of the social media experience itself: “Facebook, with Oculus, are committed to this for the long term. We’ve recently created new teams at Facebook to build the next generation of social apps and virtual reality.” (Source: “How Facebook plans to take over the world,” The Guardian, April 23, 2016.)
The Bottom Line on Facebook Stock
The bottom line on Facebook stock is that it has virtually (no pun intended) unlimited potential. More than Apple, Facebook is the company that has the biggest footprint in the future of tech.
It is the prototypical social media experience, but it also has the potential and technology to spread its wings and bring Internet connectivity to areas of the world that still lack running water. That same Internet could well become the tool through which those areas will improve their basic infrastructure—water access included.
FB stock also has a strong presence in the virtual reality space.
Plus, those are just the two topics I chose to cover in this article. Overall, Facebook has “revenue growth” written all over it and Facebook stock is never too far from a potential rally.