Is This the Next Apple Product Category?

Apple could go head-to-head with Google in creating a platform for smart appliances.

May 27, 2014 at 10:15AM

The S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) were up 0.47% and 0.39%, respectively, at 10:15 a.m. EDT. Shares of the world's most valuable company, Apple (NASDAQ:AAPL), are giving the S&P 500 a leg up this morning -- the stock had risen 1.1% in early trading. That outperformance may be related to a Financial Times report today that Apple will unveil a platform at next week's Apple Worldwide Developers Conference to connect home appliances to the iPhone. With some analysts valuing the "Internet of Things" market at more than $10 trillion, the initiative could have major implications for the company and the stock.


Apple, which is greatly admired as one of the most innovative and most visionary companies in Silicon Valley, has not launched a new product in more than four years (the last major product rollout was the January 2010 introduction of the iPad). That wait turned into a weight on shares, as the stock fell by some 44% between September 2012 and April 2013. However, the stock has retraced much of that decline and Apple CEO Tim Cook has promised a new product category for this year. The wait may be nearly over.

According to the Financial Times, Apple is preparing a software platform that will turn the iPhone into a controller for home security systems, lighting, and appliances to create a smart home. Apple has been talking to a small group of smart device manufacturers in order to certify devices to run on the new platform, and those products could then be sold in Apple's retail locations. The stores already carry some smart devices from other companies, including thermostats from Nest, which Google (NASDAQ:GOOG) (NASDAQ:GOOGL) acquired in January for $3.2 billion.

Apple is ideally positioned to federate home appliances and systems on a single platform, having already created an i-ecosystem that brings together communications and entertainment (games, music, video, etc). Furthermore, Apple is a trusted provider when it comes to the security and reliability of its software and hardware (the products just work, as the company boasts).

However, while introducing a smart home appliances platform could be hugely valuable if it becomes the standard (or a market leader, at least), it begs the question: What Apple products would capitalize on this platform? In my opinion, that question highlights the magnitude of Apple's missed opportunity when it allowed Google to scoop up Nest -- a company that was a natural fit with the iPhone maker (criminy, it was even founded by Apple alumni!).

As described in a regulatory filing, Google envisions a "multi-device future" in which "we and other companies could be serving ads and other content on refrigerators, car dashboards, thermostats, glasses, and watches." Frankly, I'd prefer to experience my home as a home rather than a no-relief advertising platform -- perhaps Apple will dream up something less intrusive.

Apple and Google want in on this $14.4 trillion market. Here's how you can get in on it, too.
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns riding the "Internet of Things". Click here to get the full story in this eye-opening report.

Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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