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Walt Disney Co ( DIS ) was in the news recently for signing a partnership with Nokia Corp (ADR) ( NOK ) that could put both companies in the forefront of the growing virtual reality market.

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Nokia believes the virtual reality market will be worth up to $10 billion by 2020. With Nokia's first-to-market 360 degree camera, the company has impressed many, including new partner Disney. An exciting partnership between the two companies could be beneficial to both NOK stock and DIS stock.

Immerse Yourself with DIS and NOK

Disney signed a deal to use Nokia's OZO cameras to shoot 360-degree videos to use for marketing materials and behind-the-scenes extras for blockbuster movies. Prior to signing the deal, it used Nokia OZO cameras to film video extras for the blockbuster movie The Jungle Book .

Nokia President Ramzi Haidamus stressed that the partnership with Disney was just the beginning. Haidamus even hinted that the deal covers other Disney studios like Marvel and Lucasfilm, setting up Nokia cameras to be used on some of the biggest blockbuster movies ever.

OZO cameras are currently being used for behind-the-scenes video of an upcoming Disney movie, but Haidamus remained tight-lipped when asked which movie it was.

Nokia and Disney made two virtual reality shorts to promote The Jungle Book. OZO cameras were used on a 360 degree cast interview that collected more than one million views, and also on the live red carpet premiere for the movie.

Users still need a compatible headset to get the best experience with the content created by Disney and Nokia. There are many headsets on the market already including the Oculus Rift from Facebook Inc ( FB ) and the Google Cardboard from Alphabet Inc ( GOOG , GOOGL ).

The deal with Nokia and Disney surprised some, as Disney does have an equity stake in rival Jaunt . Virtual reality upstart Jaunt is partially owned by Disney, but also is a partner to Nokia, so the deal makes sense. Disney was the lead investor in Jaunt's last funding round, which raised $65 million.

Disney stock was up marginally on the news, as was NOK.

The Nokia OZO camera was among the first 360 degree virtual reality cameras on the market. In November, Nokia debuted the camera with a targeted market of Hollywood filmmakers. Nokia highlighted the OZO as a camera to be used by filmmakers, television reporters and music video directors. The camera sells for $60,000 and Nokia has plans to eventually rent them out for projects.

Aside from Disney, Nokia has seen interest from other studios like Twenty First Century FoxInc ( FOXA ). Nokia is also working with NASA and several sports leagues. Early discussions are ongoing with the National Basketball Association to livestream games in 360 degrees. Obviously, this represents a huge market if virtual reality hits the mainstream population, as many believe.

There are rivals coming to Nokia's 360 degree camera. This includes GoPro Inc ( GPRO ), Lytro and Jaunt. For Nokia and its stock, this deal with Disney is exciting and could be a good growth driver. Shares of Nokia are down 17% in 2016 and have fallen more than 70% in the last 10 years.

Nokia by the Numbers

Nokia announced full-year earnings in February. The company saw net sales grow to 12.5 billion Euros. The company continues to get the largest portion of its revenue from the Nokia Networks segment, which saw sales grow 3% last year. However, the company's Nokia Technologies segment, which includes the virtual reality efforts, represents the highest upside.

Nokia Technologies saw revenue up 170% in the fourth quarter and up 77% for the full fiscal year. Operating profits for the Nokia Technologies segment increased 102% for the full year, while it saw sales pass 1 billion Euros for the full year. Operating profit for the segment was 720 million Euros, a much better margin than the Nokia Networks segment.

Disney continues to branch out into new segments to further diversify its business. Disney now has good partnerships with Jaunt and Nokia, and DIS stock has had stellar returns led by its movie, television and theme parks segments.

Disney is continuing to look towards the future and sees the power and potential of adding virtual reality to its existing and upcoming brands.

As of this writing, Chris Katje did not hold a position in any of the aforementioned securities.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.