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Wearable Tech vs Connected Car

28 May 2015 in Trading Ideas

Wearable devices are infiltrating our daily lives. Meanwhile – our need to stay constantly plugged in has found its way into our cars. Which trend has legs?

 

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WEARING TECHNOLOGY ON YOUR SLEEVE

While gadgets like smart-watches used by James Bond have fascinated us for decades, it’s only recently that technological advancements have made science fiction into a reality. One in six consumers in the US are using wearables such as fitness trackers1. Wearables are here to stay. In fact, the wearables market is expected to grow 10x over the next 5 years from $3 billion in 20132. The growth is driven by the small form factor, high computational power and widespread apps available and consumers looking for the next technology fashion accessory to log and track data.

As wearable adoption grows, the companies that power the innovation behind these devices are looking to benefit, as their total revenue opportunity expands. Outside of the consumer devices companies, this includes companies that develop the microprocessors, sensors, connectivity and display technology powering new age wearable devices. These components are the key to mainstream adoption and application of wearable devices such as fitness tracking, location sharing and health monitoring.

 

THE INFORMATION HIGHWAY, LITERALLY

The automotive industry is undergoing a transformational change with technology – it’s no longer just about what’s under the hood. From sensors and semiconductor chips to cameras and advanced electronic systems, the prospect of a self-driving car appears to be a matter of when, not if. With one-in-five cars3 expected to be equipped with wireless connectivity and real-time analytics by 2020, the opportunity for the automotive industry and its technology partners could be significant for capturing the imagination of the next generation of car enthusiasts.

What is now called the “Internet of Things” is a key driver for the connected car movement. For example, semiconductor components are expected to grow from $320 to over $4004 per car in the next few years as it popularizes features like vehicle-to-vehicle communication, stolen vehicle recovery security, and in-car infotainment services.

 

STOCKS IN THE WEARABLE TECH MOTIF

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STOCKS IN THE CONNECTED CAR MOTIF

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(1) Nielsen: 70% of U.S. consumers have heard of wearables, but might not bite because of price, March 2014 (http://www.fiercewireless.com/story/nielsen-70-us-consumers-have-heard-wearables-might-not-bite-because-price/2014-03-21)

(2) Credit Suisse Report (The Next Big Thing –Wearables Are in Fashion, May 2013)

(3) “Gartner Says By 2020, a Quarter Billion Connected Vehicles Will Enable New In-Vehicle Services and Automated Driving Capabilities”, January 2015 (http://www.gartner.com/newsroom/id/2970017)

(4) “Cars 2.0 – Cross Sector Implications of Vehicle Connectivity”, RBC Capital Markets report – April 2014

  1. david
    10 Jul at 4:35 am

    good info

    Reply
  2. Joyce Mincey-Chaffers
    23 Jul at 5:41 pm

    How to invest?

    Reply

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