PowerTrend Brief: Making Sense of the New Thing vs. the Real Thing
Just as many of you are getting used to their new smartphone or their first tablet, it is surprising to see the number of new technologies that are being talked about in the mainstream press. Some of them, such as paying for things with your smartphone or tablet, already have arrived and are on the cusp of going mainstream. Others, like wearable computing and using your fingerprints instead of credit cards, seem to be a ways off, assuming they do become commercially viable.
Mobile payments are at the heart of my Cashless Consumption PowerTrend and that forecast means I’m paying close attention to what smaller companies like Square, PayPal (an eBay (EBAY) company) and others are doing, not to mention larger ones like Bank of America (BAC), American Express (AXP), Google (GOOG) and Apple (AAPL), to name a few. You can see people paying at Home Depot (HD), Starbucks (SBUX) and other locations using their mobile devices. But as yet, the mobile-device payment trend hasn’t reached the all-important tipping point of widespread adoption. As we approach that point in time, subscribers to my PowerTrend Profits investment newsletter will be in the pole position to bank big profits.
Google Pushes into Wearable Computing
Over the last 10 years, wearable computing has been tried by a number of companies that have gone belly up: Colorado MicroDisplay, Brillian, Three-Five Systems and others. I can speak with authority on this subject because back in the day, I met with all of those management teams and heard all of the pitches about how these wearable displays would revolutionize computing, gaming and entertainment. Well, I didn’t buy it at the time and today none of those companies are around any longer.
Remember that history is doomed to repeat itself and it seems we are starting to see that with wearable computing. A new wearable computing design from Google — dubbed Glass — is getting a fair amount of press in part because Google is looking to make it fashionable and bring it into the mainstream. Once again, I remain skeptical that the average consumer actually will wear these devices. It’s a change in behavior that seems more like a leap than a simple step forward — much like the move from mobile phone to smartphone.
It seems I’m not the only one who has questions over wearable computing. A case in point is that the West Virginia legislature has introduced an amendment to an existing bill to establish “the offense of operating a motor vehicle using a wearable computer with a head-mounted display.” It seems I’m not the only one that sees these potential devices as taking the whole texting while driving concern to a whole new level. Time will tell if the average person will accept these new computing goggles, but I’m not holding my breath.
Being New Isn’t Enough
The point I’m getting at is that for a new technology to be viable, it has to be easy enough for the average person to use and to adjust his or her behavior day in and day out. Let me give you a great example. When the computer industry shifted from desktop PCs to notebooks, we saw a shift away from the mouse to trackpads. That was horrible for Logitech (LOGI) but a huge win for Synaptics (SYNA) and its shareholders.
We are entering another transition like that one with smartphones and tablets, but it’s not the touch capability I’m addressing. No, I’m focusing on the growing use of speech-recognition technology. Apple has Siri, Google has Voice Search and Microsoft has its own Conversational Systems Research Center. I bet you’ve had an experience with speech technology and haven’t realized it. I’m talking about the automated voice you hear when you make a call to a bank such as Bank of America (BAC), Wells Fargo (WFC) or E-Trade (ETFC). Financial institutions aren’t the only ones using speech-recognition technology to automate customer service. Others are doing it as well. They include utilities, consumer product companies and the like.
Yes, this technology is available here and now. Subscribers to PowerTrend Profits already are profiting, given our position in Nuance Communications (NUAN), which is up more than 8% since it was added to the PowerTrend Profits portfolio just a few short weeks ago. Nuance falls into my New Demand, New Solutions PowerTrend and I suspect there will more contenders for that PowerTrend in the coming months. I hope you’ll join me at PowerTrend Profits so you can profit from the real deal companies while I steer you away from the contenders and pretenders.
To read my e-letter from last week, please click here. I also invite you to comment about my column in the space provided below.
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- You are invited to hear me speak and to meet me on Wednesday, April 10, at 7 p.m., when I discuss “3 Power Trends to Profit From” at a lecture that I will give at New Jersey City University in Jersey City, N.J. The Wall Street Perspectives Lecture Series 2013 event is scheduled for the Harborside Financial Center 4A, 286 Washington Street, in Jersey City. To RSVP, contact Bernard McSherry, an assistant professor of finance, at 201/200-2529 or [email protected]. I hope to see you there!