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Facebook Acquires Nascent Objects to Boost Hardware Efforts?

Zacks

Facebook Inc FB has snapped up startup – Nascent Objects – for an undisclosed amount. The acquisition is likely to step up its hardware efforts.

About Nascent Objects

Nascent Objects calls itself the “world’s first modular consumer electronics platform” that makes “product development fast, easy and accessible”. The primary aim of the platform is to reduce costs associated with hardware designing under conventional prototyping methods.

Nascent says that its technology works by fusing together hardware design circuitry, 3D printing and modular electronics, thereby cutting down on the time and resources needed for product development. This enables developers “to go from concept to product in just weeks.”


The concept of “Modular Electronics” has existed for some time now but hasn’t really caught the fancy of the mainstream. Modular electronics are devices with interchangeable modules for various types of components such as batteries, cameras, and speakers etc. These offer a way to reduce electronic waste by increasing the shelf life of an electronic device. However, an expensive and cumbersome manufacturing process is the biggest impediment to its commercial adoption. One of the most ambitious modular projects, Project Ara was recently shut down by Alphabet GOOGL. Project Ara was directed towards building a modular smartphone.

How will Nascent Objects Fuel Facebook’s Hardware Efforts?

Facebook is working to boost its hardware efforts. The company set up a DARPA style research facility, Building 8, spearheaded by Regina Dugan, a former Alphabet executive in April this year. Notably, Dugan served as DARPA’s director prior to her Alphabet appointment. Recently, it unveiled Area 404, a 22,000 sq feet sprawling hardware research lab at it Menlo Park headquarters to boost “modeling, prototyping, and failure analysis in-house”.

Reportedly, the company will be spending a whopping $6 billion on research this year alone. We believe Facebook will be investing a considerable share of that money on its hardware efforts, given the recent developments.

Though it is clear that Nascent Objects will be working with Building 8 but precise details aren’t available. Nascent Objects CEO commented that “we’ve decided to continue our mission at Facebook and Building 8. We’re excited to build products that can open the world to everyone and create on a scale we couldn’t have imagined before. People have become used to the idea that with software, you can have whatever you want, whenever you want it. We want to make this happen with hardware – and we think Facebook is the best place to make this a reality.”

Facebook is aiming at fostering better global Internet connectivity. Per media reports, Nascent Objects’ technology could boost its ambitious projects, Aquila, ARIES (Antenna Radio Integration for Efficiency in Spectrum) and Terragraph. Aquila is a solar powered drone that will beam Internet from the sky. With ARIES, Facebook is testing ways to bring speedier connectivity in rural areas by using antennas to provide faster Internet coverage on 2G spectrum while Terragraph will boost connectivity in congested urban areas by employing WiGig antennas.

Further, these reports add that Facebook could utilize Nascent Objects technology to “prototype” its VR headset, Oculus Rift. Plus, it can help Facebook with its Open Compute Project. OCP has been undertaken by Facebook to create the most energy efficient data center that can handle huge data in the most cost effective way. Reportedly, Facebook uses OCP designed servers, storage and switches that have slashed its expenses to a great extent by eliminating the need to buy from outside vendors.

Conclusion

Facebook was never intended to be just a social media service. However, this year, Facebook has more than ever clearly highlighted its ambitions of becoming a tech powerhouse. We continue to be impressed with Facebook’s efforts to develop cutting edge AI & AR/VR technology. There are just too many things going on in its favor right now like Instagram, Oculus, Messenger and WhatsApp and the company’s strength in mobile, which will continue to outpace growth in desktops in the foreseeable future.

At present, Facebook carries a Zacks Rank #1 (Strong Buy). Other stocks worth considering in the tech space are NetEase Inc NTES and NetApp, Inc. NTAP, which also carry a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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