By Ryan McQueeney
All
around us, the world grows more intertwined every day. Thanks in part to our
global web connections, we have the ability to interact with people and things
on an incredible level. This online experience can be life-saving and
important, or it can be as arbitrary as simplifying monotonous tasks.
There
are many industries and companies that aim to advance this experience. One
growing market, known as the Internet of Things (IoT), connects our household
items to a wireless network by embedding them with electronic, software, or
sensor technology. This network of devices allows us to take the next step into
a wireless world that relies less and less on direct human-to-computer
interaction.
You
might actually be using products in the IoT without knowing it. Some common
examples include the remote operation of a house’s security system, wearable
motion and activity tacking products, and even public trash bins that
automatically alert a municipality when it is full.
The
Internet of Things is definitely present in our everyday lives right now, but
there is a lot more room to grow. According to research firm IDC, via the Wall
Street Journal, the IoT market could nearly triple in the coming years. In
2014, the global IoT market was worth $655.8 billion, but it could reach up to
$1.7 trillion by the year 2020.
With
the industry showing that much room for growth, investors need to start
thinking about investing in the IoT now, and we’ve highlighted a few companies
and strategies for those who would like get the IoT into their portfolios.
Big Name Patent
Holders
One
of the most important steps a company needs to take to capitalize on emerging
technology is locking down patents at the earliest possible point. In regards
to the Internet of Things market, we’ve seen a lot of companies filing for
patents that put them in a good position to grow as the IoT grows.
One
such company is technology behemoth Apple AAPL. Apple holds a patent named
“Local Device Awareness”, which describes an automated relationship between
multiple close-range devices. The technology could be used for position
tracking, such as finding a lost remote control, or even proximity-based
virtual reality, like a video game that depends on one’s actual position in a
room.
Another
major IoT patent holder is IBM IBM. Primarily an information technology-focused
company, IBM figures to be a major player in the IoT. Currently, IBM holds a
patent
regarding data filtering in Internet of Things devices, which describes
a process in which devices receive and interpret information. This patent puts
IBM amongst the frontrunners in technology that allows devices to communicate
without human interaction.
Today’s Leading
Products
While
patents are important for future growth and development, we also have to look
at the already-available IoT devices. Again, we are looking at some of the
world’s biggest tech companies here.
One
of the more obvious industry leaders is Alphabet Inc. GOOGL and its line of
Nest home monitoring products. Alphabet, under the Google name at the time, acquired
Nest for $3.2 billion in early 2014, and since then the brand has become one of
the biggest names in home automation with its smart thermostats, smoke
detectors, and safety cameras.
Another
leader in the IoT market right now is Amazon AMZN. Amazon’s Dash Buttons, which
allow users to re-order specific products with the click of an actual physical
button that can be placed anywhere in the home, could be considered an
entry-level IoT device. Additionally, the company’s Echo smart speakers, which
utilize its Alexa home connectivity technology, are probably the most popular
consumer IoT product on the market right now.
Finally,
Samsung SSNLF is another major player with its SmartThings brand. Samsung
SmartThings are a series of in-home products, ranging from electric outlets to
motion sensors, which allow for easier control of a users’ entire home.
Unsung Heroes
The
technology giants will certainly be leaders in the IoT market, but investors
should also look into the smaller companies that will be the manufacturers of
the actual hardware. For every product IoT product sold by Apple, the supplier
who built one of the components within the device also stands to benefit.
One
of Apple’s key suppliers is Skyworks Solutions SWKS. Skyworks is the industry
leader in semiconductor manufacturing and currently produces a chip that is a
vital part of the iPhone 6. Similar technology will be the backbone of the IoT
movement, as semiconductors and sensors move beyond their usual homes in phones
and computers and into our other household items.
Investors
should also focus on some smaller cap stocks that have potential to grow in
correlation with the IoT market. One such company would be Sierra Wireless
SWIR, a wireless communications expert with a product line that should fit
perfectly in the IoT market.
Another
company to consider is Iridium Communications IRDM, a low-Earth orbit satellite
company that has recently partnered with IoT platform providers as the industry
has discovered a use for LEOs in connecting the world. IRDM currently has a
Zacks Rank #1 (Strong Buy).
Bottom Line
The
Internet of Things has the potential to change the consumer electronics
industry as we know it. The growth of the market will be another indication of
humanity’s expansion into an autonomous world, and investors need to start
taking note of the IoT now. Whether you want to focus on the major technology
players or the small companies at the heart of the IoT movement, the time is
now to add this industry to your portfolio.
Source:
finance.yahoo.com
No comments:
Post a Comment