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Innovation
Answered

Uncover how some Invesco QQQ companies are answering their industries' biggest questions with innovations that are defining the future.

Leisure Redefined Play

How Shifting Consumer
Preferences are Driving Innovation

In the past few years, pivoting has become the rule within the leisure and entertainment sectors. Research from Mintel¹ suggests that current economic trends have split consumers into two broad groups: those directly affected by the rising cost of living and those feeling the effects of a strong global dollar. This means that brands in the leisure space have the opportunity to explore increasing segmentation, focusing on both curated luxury experiences and budget-conscious entry points.

Across the spectrum, businesses have also had to innovate for consumers who live in a digital-first world — and increasingly align their behavior with social impact considerations like sustainability.

Here’s how those factors have driven key trends across these industries.

Social Impact Can Drive Sales

As brands become more identity-focused, consumers want to know where a brand stands — and they’ll put their money behind a brand that aligns with their values. The digital travel company Booking.com, part of Booking Holdings Inc., partnered² with climate tech company CHOOOSE to help travelers become more conscious of the ecological impact of their travels. This partnership may eventually expand to allow travelers to customize carbon offset options for their trips.

Consumers know their actions make a difference and are looking for companies that can help support their values. This has led to a rise in environment-friendly options for consumers, such as athleisure brands that allow customers to trade in their gear or buy pre-worn workout gear at a discount.

Personalization
Becomes Paramount

Consumers want brands that know them and can anticipate their needs and preferences. To that end, Netflix has created multiple plan tiers³ for consumers, offering more flexibility for a wider range of viewers. A four-tiered pricing system, available in many countries, allows consumers a wide spectrum of customization to choose the best plan for them.

Personalization also extends to loyalty programs. Booking.com has expanded the tiers in its loyalty program, offering a Level 3 once certain levels are unlocked. Levels are reached based on repeat bookings. In an uncertain economic climate, targeted programs can reward loyalty and help incentivize consumers to increase brand loyalty.

Integrating Digital
and In-Person Experiences

With increasing digital integration into our daily lives, companies are creating new experiences powered by evolving technology. For example, Starbucks launched the beta of a Web3 experience called Starbucks Odyssey, which allows customers to earn and buy digital collectible stamps (NFTs). But these stamps are not only designed to curate a digital collection. Each will include a point value based on its rarity, and the stamps can be bought or sold among members within the marketplace, with ownership secured on a blockchain. As stamps are collected, members’ points will increase, unlocking access to unique benefits and experiences such as a virtual espresso martini-making class, access to special merchandise and artist collaborations, exclusive events at Starbucks Reserve Roasteries or trips to Starbucks Hacienda Alsacia coffee farm in Costa Rica.

Looking ahead, brands in the leisure and recreation sector that can elevate authenticity, create avenues of engagement with consumers and meet consumers where they are — both on their devices and at their price point — may have an advantage. Consumers know who they are and what they want and are looking for brands that can say the same.

¹ Mintel 2023 Omnichannel Marketing Trends report
² Booking.com press release, “Booking.com and CHOOOSE Announce New Strategic Partnership to Help Encourage More Informed and Responsible Travel Choices,” 10/19/2022
³ Netflix press release, “Netflix Starting From $6.99 a Month,” 10/13/2022

Engines of Innovation Play

The Next Chapter
of Semiconductor Innovation

Globally, the value of the semiconductor industry is expected to reach $1 trillion¹ by 2030. That’s because semiconductors are the backbone of modern life. Conspicuously, they’re inside our laptops, smartphones and TV sets. They’re also responsible for many of the most important innovations in clean energy, artificial intelligence and medical science.

Looking ahead at the impact of this evolving technology, here’s where to expect some of the most significant innovations — and how Nasdaq-100 companies are driving those shifts.

Clean Energy

By harnessing, converting, storing and moving electricity at increasingly efficient rates, semiconductors are vital to the growth of renewable energy. Solar panels, for example, rely on these microchips, as do electric vehicles and their charging stations.

Texas Instruments is proving to be a leader in embedded processing for innovative electric vehicle (EV) systems. For example, in October 2022, TI debuted an EV charging station reference design using the AM62 family of Arm-based processors. This family of low-cost, lower-power processors enables critical features such as embedded intelligence, graphics and display support. With these features, AM62 processors can help automotive engineers continue to innovate their EV designs that include human-machine interfaces.

Innovations in clean energy are also accelerating within the semiconductor industry itself. To improve recyclability and reduce overall electronic waste, Intel is working on reducing the size of main boards and incorporating more bio-based printed circuit boards. The company has set a goal for the next-generation Falcon Shores chip to deliver five times the performance per watt and client and server microprocessors to be 10 times more energy efficient by 2030.

If the industry wishes to truly lead, however, it must also address carbon emissions in the manufacturing process. Here, Intel is setting new standards for innovation. Over the past decade, the California-based chipmaker has improved its carbon intensity by reducing direct emissions; in the second quarter of 2022, the company announced plans to invest $300 million to improve energy efficiencies at production facilities. This is one of many ways Intel plans to achieve its overarching goal: net-zero greenhouse gas emissions by 2040.

Artificial Intelligence

If the past decade was defined by advancements in mobile technology, the future belongs to artificial intelligence. Nearly every industry, in one way or another, will benefit from AI-powered tech such as machine learning and natural language processing.

To deliver the processing power required by these algorithms, semiconductor designers must develop entirely new architectures.

Advanced Micro Devices is well known for its graphics cards and premium PC processors that are perennial favorites among gamers. But it’s AMD’s family of EPYC data center processors and Instinct accelerators that is driving the innovation in AI. Powering many of the world’s most powerful supercomputers, AMD products are being used to push the boundaries of scientific discovery in areas like energy, climate research and vaccine research and development using AI. For example, the fastest supercomputer in the world, the Frontier supercomputer at Oak Ridge National Laboratory, is powered by AMD technology and using cutting edge AI to analyze viruses² at the molecular level.

AMD is uniquely positioned help customers across industries develop and deploy applications with multiple forms of AI, due to its broad product portfolio and experience serving embedded markets. At CES 2023³, the company detailed new products that broaden its AI product portfolio from the device to the edge and the cloud, including the first dedicated AI hardware in an x86 processor, a new AI inference accelerator and the first data center APU for AI and high performance computing.

Manufacturing

Manufacturing is another industry that benefits enormously from silicon. The rapidly evolving Internet of Things (IoT)⁴, in particular. By incorporating highly sophisticated sensors and intelligent cameras into manufacturing processes, IoT-enabled devices can help companies cut costs across the board.

Qualcomm is among the top innovators in this field. Their application processors are purpose-built to integrate smart digital appliances with industrial equipment and advanced robotics, which helps manufacturers spot inefficiencies and bottlenecks at even more granular levels. On-device intelligence, powered by the Qualcomm AI Engine, can actually help predict machinery failures before they occur.

The same fast, power-efficient and highly connective technologies used in Qualcomm Technologies’ suite of Snapdragon platforms are at the center of their solutions designed to advance areas such as manufacturing. Their platforms for IoT are optimized for high-performance, low-power computing and on-device AI processing to power a new era of intelligent, connected products such as smart cameras for monitoring production lines, automated guided vehicles (AGVs) and more.

Qualcomm Technologies’ advanced wireless connectivity technology will also play an essential role in creating smarter factories. Their latest tech innovations and partner initiatives enable end-to-end 5G private networks by bringing powerful 5G performance together with streamlined deployment and operation. These networks will provide ultra-responsive and ultra-reliable connections to enable intelligent automation and real-time data access across operations.

Looking further ahead, Qualcomm Technologies will benefit from growing opportunities in extended reality, or XR, which refers to virtual reality, augmented reality and other immersive, digital experiences. For manufacturers, XR can help⁵ reduce human error, assist during training and upskilling, and foster collaboration between workers. Qualcomm’s Snapdragon XR2 5G Platform is the first XR platform to put the power of artificial intelligence and 5G into a single solution. And the company’s Snapdragon AR2 platform will unlock a new generation of sleek, highly capable glasses to help accelerate new spatial computing experiences, positioning it perfectly in the marketplace for manufacturers who are investing in their digital futures.

¹ McKinsey article, “The semiconductor decade: A trillion-dollar industry,” 4/1/2022
² AMD + Ornel case study, “ORNL CoMet team explores complex biological systems with AMD InstinctTM GPUs”
³ AMD press release, “AMD Highlights Future of High-Performance and Adaptive Computing During Opening Keynote of CES 2023,” 1/4/2023
⁴ The network of physical objects that have the ability to connect and exchange data with other devices and systems over the internet
⁵ Infopulse article, “The Place of Extended Reality in Digital Transformation Strategy for Manufacturing: Use Cases and Benefits,” 6/16/2022

Innovation Answered

How Shifting Consumer Preferences are Driving Innovation