Apple received 600,000 advance iPhone orders on the first day
customers could sign up to receive the iPhone 4, and it has
recently seen strong demand for its new product - the iPad.
Tech companies are always coming out with new products, and the
rate of technological advancement is only increasing. Nowhere is
this more apparent than in the smartphone industry.
There was once a time when you saw only businessmen and wealthy
individuals using smartphones. But now they are becoming more
accessible to the average person - and are stealing market share
from basic cell phones as features such as music, video streaming
and web browsing become increasingly more attractive to the general
***As of the fourth quarter of 2009 more than 20 percent of the
mobile-phone market was taken up by smartphones. Analysts at
Nielsen, a market research firm, predict smartphones will overtake
feature phones before the end of 2011.
Whether or not smartphones become the dominant player in the
mobile market by the end of 2011, the strong trend toward these
devices is undeniable. Consumers want phones that let them listen
to music, surf the web, watch video, and access a wide array of
applications. Maybe even occasionally make a call or two.
There is, however, a dark-side to this smartphone revolution.
The web-browsing, video-watching, Pandora-streaming mobile devices
devour bandwidth. Bandwidth refers to the data transfer rate on a
network, and these little machines consume huge amounts of it. That
wouldn't be a problem if providers could deliver unlimited data.
But providers can't - so bandwidth is becoming an increasingly
is the provider of choice for smartphone companies like Apple and
Research in Motion (Nasdaq: RIMM)
, maker of the Blackberry device. As such, AT&T's successes and
failures foreshadow what the entire industry will soon
The company is desperately trying to update its infrastructure
to accommodate the massive bandwidth demands of customers. It's
fighting a losing battle, as AT&T is being attacked on two
There is a literal fear of network collapse among mobile
providers, and they're scrambling to find a solution.
***I recently uncovered a tiny Israeli technology company that
develops technology specifically designed to manage bandwidth use.
The company's solutions are critical for Internet Service Providers
), cable companies, landline operators, mobile phone companies,
businesses and governments.
I just pulled the trigger and added this small cap stock to the
Small Cap Investor PRO
What's more, the company just reported earnings, and shares moved
higher yesterday - despite the broad weakness in the market.
In the first and second quarters of 2010, this tiny tech company
reported greater than 30 percent revenue growth over the comparable
quarters in 2009. It is profitable on a non-GAAP basis, and is
sitting on $55 million in cash.
This is a great investment opportunity and you can get my full
research report on the company when you sign up
***As more people use smartphones to listen to music, watch
videos, or surf the web, companies are trying to accommodate the
massive bandwidth demands of its customers. Bandwidth refers to the
data transfer rate on a specific network, and these tiny devices
eat up large amounts of it.
There are a few caveats to consider before investing in this
space. The big one is that bandwidth segmenting technology has its
enemies. The technology plays a pivotal role in the United States'
net neutrality debate.
The idea of net neutrality is that all customers should have
equal access to bandwidth, and all should pay the same rate for the
same service. Service providers disagree. They think bandwidth hogs
should have to pay more since they consume more. These bandwidth
consuming individuals (or firms) make the overall service more
expensive, which providers claim is unfair.
The bottom line is this: the book is not closed on net
neutrality, nor will it be for some time, if ever. The debate could
hold bandwidth management firms from moving drastically higher,
especially if they have large exposure to the U.S. market where the
FCC is still debating net neutrality. But this is not the case in
many overseas markets, and companies with a solid foothold in the
market are unlikely to see their stocks fall dramatically. In other
words, I believe there is more upside potential with companies like
the one I recently recommended than downside risk.
***This company is a play on the future growth of smartphones,
and the near certainty that service providers will segment
bandwidth in order to design service plans tailored to customer
behavior. What's more, this tiny company is certainly a potential
takeout candidate and management has shown an ability to
orchestrate acquisitions in the past. Investors should expect solid
gains with this low-beta micro cap, although intra-day price
volatility will be high due to poor liquidity.
If you're interested in getting my full research report on this
company, I encourage you to sign up for a trial subscription to
Small Cap Investor PRO
. The service is only $199 a year and I offer a 30-day money back
here to get started today.