Just a week into shipments, Facebook Inc (NASDAQ:FB) is facing an “unexpected shortage of components”, causing a delay in shipping of pre orders of the much anticipated VR headset, Oculus Rift, much to the dismay of customers.
Facebook hasn’t revealed any details about the components in question or the latest shipment dates. It notified customers whose Rift shipping has been delayed through an email apologizing for the same. It also added that Oculus will be updating the new status of shipping by Apr 12 on Oculus.com.
Moreover, to quell customers’ disappointment, the company announced that it will be waiving all shipping costs for both domestic and international orders through Apr 1. Citing, Reddit’s Oculus channel, Fortune reported that customers, though happy with the waiver, are puzzled as to how the Oculus put itself in this kind of situation. Customers argue that the company has long been preparing to launch Rift. A delay in the subsequent batches of pre orders is understandable but is beyond comprehension for the initial batch, especially after CEO Lucky Palmer promised a fast delivery to customers.
Rift has been one of the most highly anticipated products in recent times because it promises to bring a fully immersive VR experience right into your living room. However, the reviews now available are somewhat polarizing, reflecting a stark difference between the tech community and the general public. Wired was highly impressed with Rift. Though it highlighted the lack of key games and apps and underscored the need of high-end PCs costing upwards $1000 to run Rift, it assured buyers that it was indeed a long-term investment.
However, The New York Times and The Wall Street Journal didn’t have very kind words for Rift. New York Times called Rift “brimming with potential,” but found the initial software catalog a disappointment and the design difficult to adjust. The Wall Street Journal went a step ahead stating “Oculus Rift is the 2016 product you hope your neighborbuys,” “You’ll definitely want to try it, but there’s little reason to own one unless you’re a serious gamer.”
We believe that there are plenty of issues with Rift including potential health hazards and intensifying competition as HTC’s Vive and Sony’s (NYSE:SNE) Playstation VR make their debuts this year. Though it is too early to comment on its future, but one thing is for sure that AR/ VR technology is here to stay. In fact, it is the next big technological innovation along with AI technology. Not just Facebook, but other behemoths like Alphabet Inc (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) are also scrambling to get a share of the lucrative VR/AR market.
According to a 2014–2018 report from KZero, a U.K.-based consulting and research firm that focuses on virtual reality, the market will grow exponentially and could be worth $5.2 billion by 2018.
The Street quoted an analyst saying that Rift had the potential to “handsomely” pay off the $2 billion investment that Facebook made for acquiring Oculus two years back. He expects Facebook to sell 600,000 units this year and another 2 million plus units equaling to over $1.6 billion in revenues in the 2017. The analyst was upbeat about overall VR potential and added that VR might contribute $1–2 billion in additional revenues for the social service giant by 2017. By 2020, it could be as high as $7 billion worth of incremental revenues or 10% of the total revenues for Facebook.
Tesla Motors Inc
Over the past week, there has been considerable buzz around Tesla Motors Inc (NASDAQ:TSLA)’s new Model 3 electric car. On March 31, Tesla Motors unveiled the sedan, and excited buyers lined up outside the company’s dealerships hoping to get on the reservation list.
TSLA shares were up over 2.5% during morning trading that day, and then the following day, causing investors to become bullish on the company because of the Model 3’s promise.
Today, Tesla stock is up almost 5% on the day as company CEO and space wunderkind Elon Musk announced that Model 3 presales generated almost $10 billion this weekend, selling 276,000 cars by the end of Saturday, April 2. Despite the Model 3 not being shipped out until mid-2017, the demand for this car is clearly here.
The key reason this car is generating so much attention is because of the $35,000 base price, placing the Model 3 in a similar price bracket as General Motors Company (NYSE:GM)’s and Nissan Motor Co Ltd (ADR)(OTCMKTS:NSANY) electric car models: the Chevrolet Volt and the Nissan Leaf. However, of the three electric car models, the Tesla Model 3 is still the most expensive.
The sub-$30,000 price point, based on a $7,500 federal tax credit, that has been discussed only applies to the first 200,000 electric vehicles a manufacturer sells in the U.S. Well, every person interested in purchasing the Model 3 from here on out will no longer receive that credit because Tesla crossed that 200,000 figure threshold this weekend in presales.
However, whether you purchase the $35,000 base model or Mr. Musk’sestimated average price of $42,000 of the Model 3, it is still significantly cheaper than the base model of the Model S sedan, which starts off at about $70,000 MSRP. The most basic unit for a new Model S 70 can be leased for $880 per month for 36 months and $6,575 due at signing per the Tesla website.
Personally, if I had access to a personal garage where I could install a charging station, I would absolutely purchase a Tesla Model 3 without hesitation. I believe that many individuals would do the same as well. There needs to be an incentive to purchasing electric vehicles besides being more eco-friendly. It is similar to recycling – most individuals would recycle if they are given more of an opportunity to do so.
A starting price of $70,000 before taxes and add-ons for a Tesla only provides opportunity for a select few people. By cutting that price in half to $35,000, Tesla Motors is now creating more opportunity for individuals to purchase electric cars. The next step in this process is to develop ways to improve the electric car infrastructure across the nation.
If the Model 3 becomes a widely popular vehicle – it is already projected to be due to the success of this past weekend – Tesla can initiate the change needed to alter our perception of what it means to drive a car. Other automakers will likely follow suit and develop more electric vehicles, increasing the supply and options for individuals. It simply makes sense to have electric vehicles instead of ones that burn fossil fuels and pollute the atmosphere. And Tesla Motors may be the company to spark such change.
General Electric Company
General Electric Company (NYSE:GE), a leading industrial goods manufacturer, recently announced that it has sold its lending and leasing business in Japan to Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL). Alongside, General Electric also completed the sale of its lending and leasing business in Mexico to Linzor Capital Partners. Together these two transactions represent approximately $6.2 billion in ending net investment (ENI).
Additionally, General Electric announced the sale of GE Capital’s majority shares in Bank BPH’s Core Bank to Alior Bank. The transaction represents assets totaling approximately $2.1 billion in ENI. This transaction is expected to reap approximately $0.2 billion of capital for the company.
General Electric is currently streamlining its business for better long-term growth opportunities. In order to focus more on its core business activities, the company has started exiting the financial business and increased its investments in key industrial businesses through restructuring, state-of-the-art technology, and R&D initiatives.
The sale of General Electric’s Capital segment business in Japan was initiated in December, representing $5.2 billion of ENI. SMFL, the buyer of this segment in Japan, is the largest leasing company in the country. It has its business across China, Southeast Asia and the United States.
The sale of GE Capital’s Mexican business was also initiated in December, which comprises assets totaling approximately $1 billion in ENI. Linzor provides its services across Latin America.
Since Apr 2015, GE Capital has inked sale agreements worth approximately $165 billion, out of which it has completed deals worth $146 billion in ENI. The company intends to sell approximately $200 billion of GE Capital assets in ENI globally. This process is expected to be complete by the end of 2016.
Virgin America Inc
On Monday, shares of airline Virgin America Inc (NASDAQ:VA) are soaring over 40% after fellow airliner Alaska Air (NYSE:ALK) said it would acquire the company for $2.6 billion, beating out JetBlue Airways (NASDAQ:JBLU) in a bidding war.
Alaska Air will pay $57 per share in cash for Virgin America, which is roughly 86% higher than Virgin’s stock price in March when the airline was considering a sale. The deal would generate $225 million in annual synergies once the companies merge, and Alaska Air expects a one-time integration cost in the range of $300 million-$350 million.
“The combination expands Alaska Airlines’ existing footprint in California, bolsters its platform for growth and strengthens the company as a competitor to the four largest U.S. airlines,” VA said in a statement early this morning.
According to Reuters, “the deal would create the fifth-largest U.S. airline,” and is the latest merger in the airline industry. Over the past decade, enough mergers like this one have occurred to shrink the industry to just a handful of companies, and the top four control over 80% of the travel sector in the United States.