CES 2016 Expected To Be Huge For Drones, Virtual Reality And Wearables

• This year’s CES kicks off next week in Las Vegas.
• FBR expects that virtual reality, drones and wearables will be key themes at this year’s show.
• The firm expects that device integration will be a primary focus of the next wave of wearable software.

Next week, FBR & Co analyst Daniel Ives will be attending the Consumer Electronics Show (CES) in Las Vegas. In a new report, Ives previews this year’s CES and discusses the trends that investors should be watching for in 2016.

Virtual Reality & Drones

One of the major themes that Ives expects at this year’s show is virtual reality (VR), particularly VR headsets. FBR anticipates that there will be a wave of VR headsets released starting in 2016 from companies like Facebook Inc FB’s Oculus Rift, HTC Vive, Sony Corp (ADR) SNE’s PlayStation VR and Microsoft Corporation MSFT’s Hololens.

In addition, Ives expects GoPro Inc GPRO and other innovative technology companies to continue to focus on the billion dollar opportunity in the commercial drone business.

Wearables

Perhaps the biggest theme in this year’s CES will be the proliferation of wearable devices. “We ultimately believe third-party applications will represent a key driver of use cases for wearables (e.g. health, fashion) which will be a focal point next week at CES, with companies racing to establish themselves as the de facto platform/standard for certain wearable categories,” Ives explains.

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He adds that next-generation software that is focused on device integration will be key for many companies in the space.

Stock Picks

Ives believes that the breakout year ahead for wearables will provide a major growth opportunity within the Internet of Things (IoT) category. FBR believes that Buy-rated Apple Inc. AAPL and Microsoft will be among the companies leading the charge.

Disclosure: the author holds no position in the stocks mentioned.