Apple recently revealed their new iPhone 5s and iPhone 5c. Some folks are saying the “s” stands for Same and the “c” stands for Cheap, 😆 But joking aside I think the mobile market will be one of the best places to make money in the future for those who invest today.
Step 1: Research
This is when you read media releases, statistics, analysis, and other information about mobile phones to gather facts and decide whether you want to invest in this space or not. Over 6.6 billion mobile phones will be in use by the end of 2017, according to CCS Insight. Most of them will likely be smartphones. Tablets are also expected to grow in sales over time. Mobile advertising will inevitably also benefit from this trend. The global ad market for mobile devices is estimated to be $11.4 billion this year, and is expected to be $24.6 billion in 2016, according to statista.com. 
A common misconception is all the future mobile phone growth will come from emerging markets since developed countries have already reached market saturation. Fiddlesticks! A report by Google shows that only 56% of Canadians have a smart phone today, which is an amazing increase from 33% in 2012, but there is clearly more room for growth 🙂
Step 2: Take Action and Profit
Once you’ve decided to invest in the mobile market it’s time to pick a strategy. Personally I like the idea of holding three particular stocks: Apple, Google, and Qualcomm. And slowly increase my positions in them over time. Apple’s iPhones and iPads represent a large part of the market. Google is very deeply entrenched in this space as well. With the purchase of Motorola, and its close partnership with Samsung Google’s Android platform has become very popular, very quickly. Google will also benefit from the ad revenue growth. In 2011 iPhones were super popular and AAPL shareholders were very happy. This year however Android devices are the hip thing to buy so AAPL has gone down, and GOOG has outperformed brilliantly.
We don’t know which company will dominate in future years, but we can predict with a good amount of certainly that the overall mobile market will grow. Therefore, if we own both leading players, then it doesn’t matter if one steals market share from the other, because we won’t lose out on anything, and will ultimately benefit from the industry as a whole 😀 I currently have 3 shares each of AAPL and GOOG. I plan to buy 2 more shares of AAPL later this year to lower my ACB. In the future if GOOG drops in price, I will do the same, etc.
Related Post: Google the Tech Giant
Qualcomm develops much of the technology that goes into smart phones. They have patents on 3G and 4G networks, and they engineered the CDMA standard. Their revenue comes from royalty streams. In other words, they get paid whenever someone buys a new phone using their technology, which is pretty much every new smart phone out there. I currently don’t own any QCOM, but plan to buy 30 shares in November to complete my mobile trinity. Over time we’ll see if my 3 stock plan works out 🙂
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Random Useless Fact: Bees have hairs growing out of their compound eyes. The hairs detect wind direction and help them navigate better.
The only way to make money from products are if they are niches, you make them cheaper than everyone else or you catch the wave before everyone else. I personally think ipads and iphones are limited in their uses and will begin a downward usage trend in their current form. From a business perspective they are quite limited to basic communication (texting, talking and surfing). Going forward I think something like the Microsoft surface tablet is what we will se more of. These replace laptops and archaic desktops and can in a similar form to an ipad also perform business tasks being able to create documents, spreadsheets etc… Knowing how inventory warehousing works with pickers picking products etc. from a warehouse floor, I can foresee the current very expensive wrist scanner devises being replace by these more functional tablets… My opinion obviously, but I think Apple has or is near to having peaked… As to Google, they really need to figure out how to create real tangible revenue from from something that is free currently, and I believe that will be a challenge. Myself, I believe the real money is in the services and companies that use these “tools” –… Read more »
Microsoft has the potential to make a huge comeback in the mobile space now that they have Nokia 🙂 I’m looking closely at Microsoft’s Window and Surface platforms. As soon as they reach 10% of the total mobile market share I will definitely invest in some MSFT as well 🙂 I like how it has a 2.8% dividend, which is pretty good for a software company.There are many other global businesses that would indirectly benefit from the handheld market like Cisco, Intel, Oracle, and maybe even IBM.
I think this is brilliant! As soon as I get debt free I will start my investing and come to you for advice!
Good luck. Your cash flow should increase dramatically once your debt is gone. I’ll be right here :0)
Great insights on this post. Thanks for sharing!
Sure thing 🙂
I always wanted to open a mobile shop business, because nowadays I think it is the most vibrant business. I will definitely do some research before opening a shop or retail mobile phone business though because such a venture could be risky.
It’s not hard to open up a mobile shop or kiosk somewhere in the city, but what I find is it’s really difficult to make a lot of money from it. The licensing costs to the wireless providers takes up a big chunk of revenue unless you make it big 🙂
Love the take on the trifecta of Apple, Google, and Qualcomm. I actually never would have thought about the significance of Qualcomm if you hadn’t mentioned that they make so many of the components of modern smartphones. All the information was in my head about Qualcomm, but I never made the connection 😛
Also, I’m pretty sure that fact about bee eyes was the coolest part of this post (no offence to all things investing/finance)!!
Yeah, bees are amazing creatures. They have really poor vision and would be considered legally blind by our definition, but they can navigate by magnetic fields and they smell with their antennae and taste with their feet. I can’t even begin to imagine what living the life of a bee would feel like 🙂