VR/AR Shift Could Be Bigger Than Desktop to Mobile Shift, Macquarie Says (GOOG) (GOOGL) (FB); 'No one wants to be the Blackberry of the next platform shift'

Macquarie analyst Ben Schachter weighed in on Google (NASDAQ: GOOG) (NASDAQ: GOOGL) amid recent news that former lead designer of Google Search, Jon Wiley, is now the lead designer for its virtual reality products. According to the analyst, the move is "yet another sign that virtual/ augmented reality (VR/AR) is real and its importance growing." He sees the move to VR/AR as potentially having a much bigger impact than even the shift from desktop to mobile.

Schachter said the key to focus on is that Facebook's (NASDAQ: FB) CEO Mark Zuckerberg have been increasingly adamant (and very public) that VR/AR will be the next computing platform. They agree, although the timing is uncertain and there will be many setbacks and lots of doubters.

What the analyst finds critically important is that "because the shift from desktop to mobile caught so many off-guard and so dramatically impacted the competitive landscape, EVERY TECH AND MEDIA company is going to have to be prepared for just the possibility that VR/AR will become the next platform."

If Zuckerberg and others are correct it has the potential to have a much bigger impact than even the shift from desktop to mobile, the analyst said.

Schachter highlighted key points on VR/AR:

1) VR/AR will start with games, video, & sports, but we believe it will impact virtually all areas, including communication, enterprise, commerce, & healthcare

2) The desktop to mobile paradigm could apply to the coming shift to VR/AR

3) As always, fear and greed are strong motivators. Even if one doesn’t believe that VR/AR will really become the next big thing, many other players do. Everyone will need to at least be prepared if VR/AR does work.

4) VR/AR will attract significant capital from tech/media companies & investors.

5) Consumer VR/AR HW/apps have already hit the market, with much more on the way. Not all will work, but VR/AR will become increasingly important to investors

6) It will start with bulky headsets, but fairly quickly shift to glasses and eventually to contact lenses. The UI is completely undefined, but will get better rapidly.

7) VR monetization could look a lot like mobile, with an app store distribution model that splits the revenue between the platform holder and developers/publishers.

"In other words we believe greed, fear, and the potential to change the world are going to drive VR/AR," the analyst said. "For true believers that VR/AR is the next platform, the stakes are so high that they will invest significantly and move quickly. For unbelievers in VR/AR, they will look at what happened to all those that doubted mobile, and realize that even if they don’t believe it, they had better be prepared just in case VR/AR does work. No one wants to be the Blackberry of the next platform shift."

The firm maintained an Outperform rating and price target of $570 on GOOGL.

For an analyst ratings summary and ratings history on Google click here. For more ratings news on Google click here.

Shares of Google closed at $540.11 yesterday.

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