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Investing In The Internet of Things

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Investing In The Internet of Things

Internet of Things
Before delving into investing in the Internet of Things, an explanation of this term is warranted.   The Internet of Things has become the term that describes the emerging new next generation Internet that allows an individual to control many things across their life through the Internet.   This includes wide ranging things, from controlling the temperature in your home remotely to monitoring the status of your laundry to remotely setting a DVR recording. The possibilities of using the Internet to remotely run your life are endless.

From an investor’s point of view, the Internet of Things provides a number of interesting investment opportunities, as certain companies are poised to take advantage of the growth of the next generation Internet. This growth should accelerate once people get accustomed to the idea of using the Internet to simplify their lives. Eventually, specific tasks that are part of the Internet of Things will grow in popularity and the whole concept will take off like wild fire. Now is the time for investors to identify the probable winners in the Internet of Things, before it goes mainstream, and make investments accordingly.

Just how big is the Internet of Things and what is the big deal that stock analysts are making about it.   Some pundits predict that the Internet of Things will drive $19 trillion in global economic commerce over the next ten years. That is a lot of economic activity that companies can capture as revenue streams. There will eventually be tens of billions of devices of all sorts connected to the Internet of Things. It will someday become ubiquitous in our daily lives, running all sorts of things that we use every day.

Which companies should you be considering if you want to get involved in investing in the Internet of Things? Many of them are familiar names and make good investments on their own, while others may not be so familiar, but could be winning investments as the Internet of Things takes off. Keep in mind that the Internet of Things covers a lot of different technologies. Many companies could be connected to this emerging use of the Internet in varying degrees.

Investing In The Internet of Things | Investing In The Structure

Red Hat
First let’s look at the companies that are poised to benefit from the tremendous amount of money that will be spent over the next decade constructing of the structure of the Internet of Things. This includes companies such as Linux vendor Red Hat (NYSE: RHT), which will provide the computing and networking structure for the Internet of Things. It also include companies such as Qualcomm (NASDAQ:   QCOM), Cisco Systems (NASDAQ:   CSCO), and Freescale Semiconductor, Ltd. (NYSE: FSL), which will provide the guts of the Internet of Things in the form of various networking devices and chips that are necessary to run the next generation Internet.

Investing In The Internet of Things | Investing In The Products

Next let’s look at the companies that will be providing the products that will be utilized to run the Internet of Things. A lot of these products are already widely in use today, while others are just getting off of the ground.

Apple Inc. (NASDAQ: AAPL) is well positioned to benefit from the Internet of Things, as their popular mobile computing products from the iPhone to the iPad could be used by millions of people to control things remotely over the Internet.   Apple has made a move into this new emerging use of the Internet through their work with appliance manufacturers to allow their products to interact with Apple mobile computing products.   Apple’s vision is to make home automation a reality, by using Apple mobile computing products to control home appliances. A sign of Apple’s move in this direction is the inclusion of Healthbook software in the iPhone 6. This software collects data directly from a user’s body and then allows a user to analyze the data through Apple’s health app

Google Inc. (NASDAQ: GOOG) is in a race with Apple to capitalize on the Internet of Things.   Google has good prospects for being a big player in the Internet of Things with their dominant position in Internet search and other Internet services. Two signs of Google’s move into the Internet of Thing were their recent acquisitions of Nest and Dropcam. Nest provides smart thermostats for controlling a building’s heat remotely. These thermostats are so smart that they actually learn from a user’s actions and anticipate what a user wants. Dropcam provides wireless home-monitoring cameras that are surely going to play a big role in the next generation Internet.

Garmin (NASDAQ: GRMN) was once known exclusively as a car navigation company. Garmin saw the writing on the wall and has moved into the Internet of Things, selling Internet connected smart watches, fitness trackers, and pet-tracking devices.

ARM Holdings (NASDAQ: ARMH) is a very interesting play in the Internet of Things, since the company already licenses the processor architecture for 95% of the smartphones sold in the world. ARM Holdings is becoming a big player in providing chips for Internet of Things connected devices, with half of their 10 billion chip licenses being sold to manufacturers of non-mobile Internet connected devices, such as appliances.

Other companies worth following since they are involved in the development of the Internet of Things include:

  • InvenSense (NYSE:   INVN)
  • Maxim Integrated Products (NASDAQ: MXIM)
  • Ruckus Wireless (NYSE:   RKUS)
  • Silver Spring Networks (NYSE: SSNI)
  • TE Connectivity NYSE:   TEL)

Investing In The Internet of Things | Look Out For Emerging Winners

While investing in the Internet of Things, keep an eye out for the emerging companies that have new products that fit in well and will likely become big winners as part of the next generation Internet.   Just as other technology booms had a few unexpected winners that came out of nowhere, the development of the Internet of Things will undoubtedly turn some obscure companies into well-known companies that experience huge stock price increases, as their innovative products become big players in the emerging Internet of Things. Get in early on these types of stocks, as they could prove to be big winners in this next generation Internet technology wave.

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