‘Decade of Connections’ to Enable Growth in Computing Markets (AAPL, ARMH, INTC, MIPS, ANAD, HITT, RFMD, SWKS, TQNT, CAVM, NETL)
Computing and communications remain on a collision course in the years ahead as smartphones, tablets, and increasing demand for “always on” technology create a “Decade of Connections.” Consumer and business demand will provide opportunities for growth for a multitude of established and emerging companies providing processors, radio frequency (RF) devices, and platforms.
The common denominator for the Decade of Connections will be demand for increased processing power, greater mobility, and reduced power demands for longer battery operation. Companies that best enable the emerging handheld and wireless capabilities will prosper. It may have taken 30 years for the computer to mature to what we have today, but the smartphones, tablets, and netbooks of the next few years will rapidly advance mobile computing capabilities as they leverage exponentially growing technological advances.
The expanding market for smartphones and tablets with improved functionality and usage capabilities from industry leader Apple (AAPL), Android-based systems, and other platforms should result in higher demand in the United States and Europe. In addition, emerging economies now represent the fastest growing consumer market in the world, as millions of people in countries like China and India are building “relative wealth” and are now increasing consumption.
This emerging market will also be buying in volumes more commonly associated with the billions of cell phones in the world than the hundreds of millions of PCs. While some pundits think ARM Holdings (ARMH) has a lock on the mobile processing market, it doesn’t. What these new markets really want is the low power consumption offered by ARM and the processing power offered by Intel (INTC) and that is a chip no one has built yet. However, not only are ARM and Intel racing like mad to build these new chips, so is a third contestant, MIPS Technologies (MIPS).
ARM clearly dominates the smartphone and tablet markets today. However, to serve what the market will demand only a year from now, it will have to bulk up the processing power of its cores. Intel, on the other hand, needs to trim down and lower the power consumption for its popular Atom processor that dominates the netbook market. MIPS, which is much better known for powering network orientated processors like those built by Cavium Networks (CAVM) and NetLogic Microsystems (NETL), could certainly benefit from lower power consumption too, but as a relatively tiny player, it simply needs to continue building market traction.
The bulk of all new computing and communication platform devices will connect wirelessly, and will need to include RF semiconductors. These suppliers include Anadigics (ANAD), Hittite Microwave (HITT), RF Micro Devices (RFMD), Skyworks Solutions (SWKS), and Triquint Semiconductor (TQNT).
These detailed reports on the “Decade of Connections” and the likely winners and losers of this emerging tech story as well as access to additional reports covering Apple, ARM, Intel, MIPS, RF Micro, and insights into undervalued emerging companies, are available to free trial subscribers at NextInning.com. NextInning.com has covered the tech sector since 2002, and NextInning.com’s model tech portfolio is up 375% since inception, about nine times the 44% return for the S&P 500 over the same period.
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