The Internet of Things: Tremendous Profits Ahead
5G, EVs, and IoT.
Those three acronyms seem ubiquitous lately. And for good reason. They represent key investment opportunities of the next decade…and beyond.
Each term represents a distinct technology on its own, but they’re also interrelated. Fifth-generation (5G) wireless is ultra-fast, and electric vehicles (EVs) are supplanting gasoline-powered cars. Today, I will focus on the Internet of Things, because it’s IoT that ties them all together.
The term “Internet of Things” really isn’t new. In fact, it predated the tech-bubble burst of about 20 years ago. However, it wasn’t until around 2011 when 4G (fourth-generation wireless transfer speed) rolled out that the term started to gain popularity because its use became more practical.
A Network of Smart Machines
The idea behind IoT is to have devices capable of communicating and interacting with each other in real time without human intervention for industrial and individual use. Sounds simple, right? But the actual execution is tougher.
Each “smart” or “connected” device needs to have sensors and small computer processors capable of collecting data and learning based on the data. They also must be able to communicate wirelessly over the Internet.
For IoT to work properly, the network over which the data is transmitted must be fast, secure, and reliable. This is why 5G promises to take IoT to a new level. Under scenarios whereby instant communication and reaction is critical, you can’t afford to have any delay issues.
To give an extreme example, think about self-driving cars, which fall under the IoT umbrella and need 5G. The car’s computer communicates with a central server. For these autonomous vehicles to be safely used on the road, they must be able to communicate and react instantaneously. Any issues, even if minor, could be a matter of life and death.
But even in less urgent situations, if there’s a delay or lag in the communication between machines, the user experience will be impaired.
Sensing and Learning
Besides the need for a fast and reliable network, each device must have sensors that can gather data about the environment and about the human user. The device is capable of learning and can make adjustments without human intervention.
For instance, if a smart thermostat knows that you like your room temperature at 75 degrees and you usually get home at 6:00 p.m. on a weekday, it can automatically turn itself on and adjust the setting beforehand so that the room temperature is just as you like it by the time you arrive.
Some common IoT applications today are wearables (e.g., smart watches) and smart homes (lighting and appliances interconnected and working together autonomously). Over time, assuming 5G rollout is successful, IoT technology should become increasingly visible in public places. And of course, IoT is not limited to the individual experience. Companies also use IoT technology for their operations.
Smartphone as Control Center
As the human user, you also have the capability of telling your smart devices what you want. Often the smart devices can be controlled through a hub such as your smartphone. Apple’s (NSDQ: AAPL) iPhone, for example, is essentially a portable computer and can function as the control center of a personal IoT network.
On the negative side, IoT also provides more potential gateways for cyber criminals to break in and steal sensitive information. That creates the need to have cyber-security software that can protect the user from cyber intrusions.
From the billions of new devices to the materials needed to make such devices and the network infrastructure enabling them to work, IoT creates an enormous set of opportunities. Not only do new devices need to be designed and manufactured, but the materials and services required to make these devices also get a major demand boost.
In fact, our investment team has pinpointed a tech-related investment opportunity that’s poised for outsized gains. This firm is the world’s only producer of a rare, futuristic material that’s essential for IoT, EVs, and other leading-edge technologies. Click here for details.