Have Smartphones Been a Winning Investing Play?

The following video is from Wednesday's installment of The Motley Fool's Weekly Tech Review, in which analysts Eric Bleeker and Jason Moser look at the biggest stories driving the tech sector this week.

Microsoft's (NASDAQ: MSFT  ) five-year performance is on par with that of Qualcomm (NASDAQ: QCOM  ) -- stunning when you consider Microsoft has a negligible smartphone presence and Qualcomm has become the Intel of the mobile world. That brings up an interesting question: Have smartphones actually been a winning investment?

After all, while companies such as Apple (NASDAQ: AAPL  ) -- in spite of its recent share-price struggles -- have been winners, there have also been a host of losing investments. Over a five-year time frame, an investor who'd bet equally between BlackBerry  (NASDAQ: BBRY  ) and Apple would still be beating the Nasdaq over the same time period, but not by a tremendous sum. 

As Eric describes in the video, while PCs showed nearly continuous growth over 30 years, smartphones are on a different trajectory. Little more than a half decade after the iPhone and Android started taking off, investors are already concerned that growth in the high-end smartphones that bring in the most profit is stalling. Simply put, PCs had slower growth across those 30 years, but they also had a long time period where investors weren't fretting about future PC growth.

That means that while mobile companies such as Apple have racked up historic earnings in recent years, the focus on future growth has cut back share price growth of mobile companies during the past year. To see Eric and Jason's full thoughts, watch the following video. 

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The relevant video segment can be found between 3:15 and 7:43.


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  • Report this Comment On July 13, 2013, at 10:48 PM, grahamsway wrote:

    Excellent topic.

    Every tech investor should probably read Philip Fisher's "Uncommon profits" book.

    One of Buffett's main influences, he does a great job of explaining a view of new ventures and trends that usually pays off.

    If I remember right, he has a terrific piece on how ketchup might have been better for investing than color TV (hi-tech at the time of his writing).

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