Wearable consolidation: Intel buys Basis and Facebook nabs Oculus

Daniel Bader

March 26, 2014 9:40 am

It’s all about bigger hardware players buying smaller ones this week as Intel buys Basis and Facebook — wait a minute, that’s not right.

OK, the first one is true: Intel bought San Francisco-based Basis Science for approximately $100 million this week, and will integrate the company into its devices group, which is responsible for a variety of experimental products in the sensor and wearable space.

Basis sells “the world’s most advanced health tracker,” a band that contains “the most advanced sensors on the market, capturing heart rate patterns, motion, calorie expenditure by activity, multiple sleep stages, including REM—even perspiration and skin temperature.” The device also comes with iOS and Android apps for easy synchronization of the various sensors’ data.

Our own Tom Emrich is a big fan of the company and thinks the Intel investment is a wise one. “The company has some big user champions,” he says, “And the fact that it focuses on [heart rate monitoring]  is huge since its now the benchmark for fitness trackers.” Samsung has recently adopted that trend with the integration of a heart rate sensor in the upcoming Galaxy S5, as well as the Gear 2 smartwatch and Gear Fit bands.

“The acquisition of Basis gives Intel an immediate way to enter the fitness tracking market,” says Emrich. “Basis has the sensors but more importantly the algorithms” necessary to add context to the numbers.

Screenshot 2014-03-26 09.40.11

Intel will use Basis’ existing products, and its own manufacturing capabilities, to more adapt its low-powered chips for use in wearable products. Intel already invested in Basis back in October 2013, and has also put money towards Canadian startups Recon and Thalmic Labs. Basis said in a blog post that their team and Intel “shared a common purpose in applying the very best technology in the world to helping people lead healthier lives. Intel has a broad wearables strategy and we are now a key part of it.”

The less believable and slightly more amazing product announcement is that Facebook, the same company that purchased Instagram and WhatsApp, has acquired Oculus VR for around $2 billion in cash and Facebook stock.

The virtual reality startup doesn’t even have a consumer product on the market, but Zuckerberg and company have big plans for VR. The backlash to the acquisition was swift, with thousands of supporters doubting Facebook’s noble intentions for the company — virtual reality ads, anyone? — but Oculus’ founder, Palmer Luckey, tried to assuage those doubts. “Partnering with Mark and the Facebook team is a unique and powerful opportunity. The partnership accelerates our vision, allows us to execute on some of our most creative ideas and take risks that were otherwise impossible. Most importantly, it means a better Oculus Rift with fewer compromises even faster than we anticipated,” he said in a Reddit post.

While it’s true that Facebook’s influence has not dampened the growth of Instagram nearly two years later, it still poses a question: what are they trying to accomplish? The company is seen to be buying innovation instead of accomplishing it themselves, which is a valid strategy as long as it aligns with the overarching goal of the organization.

Facebook says it merely wants to help scale Oculus properly, which may not have been possible if they had stayed independent. Oculus have sold 75,000 development kits to date, and was looking at a public release later this year. Many gaming companies, including Valve and Sony (who recently unveiled their own virtual reality headset) have pronounced VR as the future of gaming, though it likely won’t make a huge market impact for another 10 years or so.

In the meantime, Canadian startups like Thalmic Labs, which has used Oculus to great effect with its own Myo armband, seems to be benefiting from the press. We recently showed you a video of Oculus and Myo working together, so it’s entirely possible that Thalmic will now work with Facebook on even bigger projects.

  • Samuel Gomez Recuero

    I still don’t get why this article started saying that “…. Intel buys Basis and Facebook …”

    • thomas nguyen

      I agree, should have been “…Intel buys Basis and Facebook buys… — wait a minute, that’s not right.”

  • Mike C

    Yep that’s exactly their thought process, they have NO business strategy whatsoever…

  • Rory Nicol

    I see facebook is hearing that their social media platform may not last forever and they need to expand. But its a strange expansion. When google bought robotic firms, we could understand, since they have their finger in every pie. Maybe facebook is doing the same and it just seems weird because this is the beginning? Its like watching your pet grow. Their body grows big before their head, so they look strange for a couple of months, until the rest catches up.

    • alphs22

      Google and Facebook have very similar business models. They both offer free-to-use websites/apps in exchange for the users’ personal data, then sell the data to advertisers for targeted marketing. Since gathering data is their bread and butter, it makes sense for them to try to dabble in everything and expand their user base. More users => more data => better targeted ads => more revenue.

  • ragingrei

    Pay-per-gaze advertising. It’s a poor man’s eye tracking.

  • thomas nguyen

    Just canceled my DK2 purchase after the announcement. Mainly for the fact I don’t trust Facebook and what they intend to do with the Oculus, I’m one to say vote with your wallets, and I did just that with the cancellation.

    • ShadowFist23

      While I’m no fan of Facebook, apparently the deal will let Oculus make better hardware cheaper and be less restricted by business requirements from what I understand.

      What do you see Facebook changing that could possibly affect the device as a device? I’m genuinely curious.

    • thomas nguyen

      putting aside from my general distrust for Facebook, I can’t help but feel this is just another platform for Facebook to gather personal information for the sake of “ad revenue”.

      My assumption for any company is to add revenue with every acquisition, Facebook core revenue comes from ads, and selling of your information to better target certain ads to your personality / hobbies. So in the short term, Oculus will still release a device with a better support by big brother Facebook, but I can see down the line that unlike Sony (and their in house gaming division, tv division, music division, etc). A hardware company without software wont make too much money.

      So to offset the cost, think “steam box” and having Facebook integration to even be able to use the Oculus in the future. This means possibly ads in some form in the Oculus (which is primarily a gaming/multimedia platform). I don’t fully support that idea of ads, or of Facebook bottom line of selling your information to 3rd parties.

      Everything I stated is all assumptions based on past history, so safe to say I could be wrong, but just my view point on this acquisition and where the joint Facebook-Oculus may be going in the future.

      If I am wrong, I would re purchase the device, but for now, I would rather cancel my order, as a sign that I am against this acquisition.

    • alphs22

      Good on you. It was a nice slap in the face for the early Kickstarter backers who wanted this to be a crowd-sourced innovation, not a revenue source for a $160B company.

      Oculus essentially leveraged the money raised from crowdsourcing and the subsequent industry support for a sizeable buyout from Facebook.