Is Amazon.com Inc. Preparing To Enter The Red Hot Virtual Reality Market?

Source: U.S. Patent & Trademark Office

If vision is a winning long-term trait for any technology company, thenAmazon.com's would be 20/10.

The company that founder Jeff Bezos created as an all-in bet on the rise of the Internet has proven an adept technology visionary, successfully identifying and entering key growth markets like digital media and cloud computing to name only a few.

Clearly the company isn't afraid to make far-flung bets to further its business aims. However, one of Amazon's recently uncovered patent filings has plenty of investors scratching their heads.

Amazon goes virtualA recently published filing from the U.S. Patent and Trade Office detailed Amazon's development of a set of virtual reality glasses or goggles, catapulting Amazon into the ranks of other big tech firms like Microsoft and Facebook that are interested in the emerging technology.

However, Amazon's VR glasses differ from those of the Microsoft Hololens in a number of important ways. Notably, Amazon's patent filing indicates its glasses would source their imaging from an additional outside device, likely a smartphone or tablet. This stands in stark contrast to Microsoft's Hololens, which the company adamantly maintains will contain all the processing power in the device itself.

In looking at the images from Amazon's patent application, the mechanics of the device seem straightforward enough. Amazon appears to have selected a glasses-like form factor, rather than the more all-encompassing helmet-like designs of Facebook's Oculus or Microsoft's Hololens, to enable users to toggle in and out of VR mode. To someone who has yet to try any of the various VR products in development, although I am trying, the prospect of wearing a simple set of glasses seems less encumbering than a more fully dedicated headset.

Projecting how these devices could compete in the marketplace comes with its own challenges since so little is known about Amazon's prototype. Not to mention the fact that complete details for Facebook's Oculus or Microsoft's Hololens aren't bountiful either. That said, given what we know about Amazon's strategy, we can begin to connect how a dedicated set of VR glasses could benefit the tech giant.

The ultimate carrot for Prime subscriptions? For a company that still generates roughly three-quarters of its revenue from the sale of physical goods, it takes a fair degree of reading between the lines to divine how the virtual reality glasses compliment Amazon's core growth drivers. That being said, I think there is a legitimate business advantage for the device, so long as Amazon doesn't bungle the execution like it has with pasthardware failures.

Assuming they deliver on their potential, its VR glasses could enhance Amazon's value proposition as an emerging gaming platform, which Microsoft and Facebook also see as an opportunity. Moreover, as one of the largest digital media companies on Earth, Amazon's VR glasses' appeal would likely extend beyond mere gaming.

Again, this involves a certain degree of projection, but if Amazon could adapt its TV and cinematic content to VR format, that could enhance the value proposition of its Prime Instant Streaming Service -- think 3D TV on steroids. And as Amazon loves driving Prime subscriptions because of the significant tailwinds it creates for Amazon's core e-commerce business, a successful set of VR glasses could complement Amazon's big picture strategy nicely, again so long as it executes well on the device. For context, studies have shown that Prime subscribers spent roughly $1,500 annually at Amazon alone, versus just $625 for non-Prime shoppers.

At this point, the device remains merely a patent, rather than a device that's been confirmed to be in development. However, it's a fascinating storyline given its timing, and if nothing else, it serves as a reminder of how Amazon's device strategy relates back to its core business as well.

The article Is Amazon.com Inc. Preparing To Enter The Red Hot Virtual Reality Market? originally appeared on Fool.com.

Andrew Tonner has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com and Facebook. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.