Some great new ideas require a skewed vision of the world, a leap of the imagination, and a healthy dose of optimism to see through to the desired outcome. Other new technologies just make sense. Fool analyst Sean Sun prefers the latter. He's watching three companies that have the potential to change the landscape of their respective industries, because they're riding strong, common-sense, but still pretty cutting-edge ideas.
Customized communication
For a small business, a giant telecommunication system makes about as much sense as a minivan does for a young bachelor. It's expensive, packed with unnecessary features, and incredibly uncool. 8x8 (Nasdaq: EGHT) works to tailor a package for each customer based on its actual usage, employing Voice over Internet Protocol (VoIP) technology instead of the clunky equipment of the olden days. As 8x8 CEO Bryan Martin told me recently, "[W]ith our offerings and our focus on customer service and the fact that for lots of customers what we're offering makes a lot more sense than a closet full of equipment, I see a lot of growth ahead of us."
Sean agrees:
VoIP is such good quality now that you're not losing anything from traditional telecom equipment, and the easier you can make it for your customers the better. At this point, it's a marketing game for 8x8. They can't match AT&T on technology, but if they can give lower-cost, customer-specific service, it just makes sense.
He still needs to determine what sets 8x8 apart from other VoIP telecom providers, but he loves seeing a disruptive technology shaking up the industry's staid behemoths.
Zapping data
Another potentially game-changing yet logical technology comes from NXP Semiconductors (Nasdaq: NXPI), a leader in the nascent market of near-field communications, in which two devices close to each other can share data wirelessly. Basically, you'll be able to swipe your phone over an RFID transmitter on a product and get reviews, pricing, and everything else you might want to know. It's not hard to envision the technology enabling peer-to-peer mobile apps -- imagine using your smartphone instead of a credit card to make payments, along with a host of other really cool stuff.
Google (Nasdaq: GOOG) recently announced that it would use NXP's chips in its flagship Android device, which sent NXP's stock up more than 10%. And rumors are swirling that Apple is interested in the chips for its iPhone, says Sean. "NXP is the key player here, but the company's not a start-up. Even if it remains the leader in this field, I need to see how much impact this might have on the company's overall financials before I commit to buying."
The YouTube of China
Finally, as anyone who has watched videos of cats playing pianos or any of the OK Go videos knows, YouTube has changed lives. Sean has his eye on Youku.com (NYSE: YOKU), YouTube's Chinese equivalent, which means it could eventually be several times bigger than YouTube.
"If the Google/Baidu (Nasdaq: BIDU) debacle taught us anything, it's that China provides its companies a huge home-field advantage -- it's going to be very protectionist going forward," says Sean. "If you're going to try to make headway into China, you're going to have a better chance if you get a Chinese partner on your side, and that positions Youku nicely."
The company is still in the land-grab phase of development, and it's only marginally profitable at best. But once it turns its attention to monetization, Sean thinks it'll become a stellar growth story that just makes sense.
You can click here on 8x8, NXP Semiconductors, or Youku.com to start tracking any of these companies on www.MyWatchlist.com, a free new service from the Fool. When you do, you'll also have instant access to the new free report, "Six Stocks to Watch from David and Tom Gardner." Or click here to get started now.
