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It isn't every day that an avid follower of tech stocks gets to sit down with someone as intimately familiar with the sector, especially its emerging trends, as Chris Anderson, Wired magazine's editor-in-chief.
Chris is a big believer in the growing trend known as the Maker movement. As I've chronicled in two previous articles, he sees the growing trends of openness, community, and collaboration that were so revolutionary about the Internet now spilling over into our physical world, and he says the implications could be huge for investors and consumers.
Chris spelled out the particulars of this movement in past articles (links above), but while I had his ear at Wired magazine and the Marriott's Culturazzi event at the Union Square Marriott in San Francisco two weeks ago, I couldn't resist shifting the conversation to the broader technology industry as well.
When asked about areas of technology outside of the broad trend that is the Maker movement, Chris also mentioned a few specific areas of opportunity that should come as no surprise to our regular readers.
I'm really fascinated what's going on with smartphones and the the innards of smartphones, what's going on with ARM Holdings (Nasdaq: ARMH ) and the ARM cores versus the traditional Intel (Nasdaq: INTC ) and AMD (NYSE: AMD ) processors. I mean, people really don't understand how much faster progress is happening on your smartphone than what's happening on your desktop.
The Internet of Things is an outgrowth of that, using those processors and sensors and wireless things to basically blanket the world in sensors that can talk to each other and what we can do with that data. This makes Big Data that comes along with that interesting as well. I do think that we bet right on the tablet as the future of media and that right now we have a proven concept that people do want tablets, and they want to increasingly consume on them. The platform is going to mature to make that easier to do that, kind of keeping with my "Web is dead" thesis.
I think that we are really entering a potentially "post-PC" era, and that mobility that really started on your phone is now moving to a bigger screen, and that's fundamentally a new paradigm. It's an intimate and personal and tactile experience, and this is like the beginnings of the Web. You really had to invent a new media with the Web, and you guys [at the Fool] we among the best. And we'll get to do that again with tablets. It's not going to be the Web. It's not going to be the desktop. It's not going to be the CD-ROM. It's going to be something else, and I'm fascinated to see where my successor [at Wired] takes Wired and the industry.
As we've seen countless times over, secular trends have a huge effect on specific companies. Take, for instance, the semiconductor reference Chris made. Over the past 12 months, the stocks of companies tied to established markets such as PCs have languished, but plays on the mobile boom have largely outpaced the market.
This is, of course, no coincidence. Rather, it's more vindication that, especially in growth-oriented sectors such as tech, investors need to heed key trends or pay the price. It's no great insight that mobile is the future, although affirmation from someone with Chris' standing certainly doesn't hurt.
What about 2013?
Granted, this is all entirely backward-looking. So will the same hold true in 2013, as we quickly approach the end of the year? Probably.
Estimates vary, but most analysts expect the smartphone market to produce some enviable growth once again next year, somewhere in the neighborhood of 30%. That should be enough to make smartphones hold more than a 50% share of the global handset market for the first time ever and probably once again lift the shares of companies tied to this trend higher. According to market researcher IDC, the PC market is also expected to come out of its current slump in 2013 to grow by 6.5%, the bulk of which should once again come from emerging markets.
Between the two, I certainly have higher conviction for mobile plays such as Qualcomm (Nasdaq: QCOM ) and ARM. With the meaningful tailwind of the mobile boom behind them, fewer things need to go right for your investment in them to still yield a positive result, which is why I'll be back tomorrow to pull the trigger on one of these mobile plays in my final piece of this four-part article series.
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