Investing in technology stocks often means investing in what you think could be the future of technological innovation.
But it’s not just about knowing how the industry might evolve, or what could be the next trend to capture the public’s interest. It’s also about putting your money into the tech stocks that have the right market share and position, leadership and financial resources to take the reins and head the charge onto the next digital battlefield.
There’s no doubt that mobile technology is one of the largest and most important segments of the tech arena. As consumers continue to shift an increasing percentage of their activity to mobile devices such as tablets and smartphones, the industry leaders controlling those spaces are sure to perform well next year … and you’d do well to grab a piece of those leaders sooner than later.
So, if you’re looking for growth in 2015, consider one or more of these best tech stocks gunning after the mobile market.
Tech Stocks for Mobile: Apple, Inc. (AAPL)
You can’t ignore Apple, Inc. (AAPL) as one of the best tech stocks for mobile.
With the holiday season upon us, anticipated sales of the iPhone 6 are $42 billion for the December quarter, well up from earlier estimates of $36.7 billion. When the actual figures are revealed in the quarterly report — expected sometime in January — Apple stock should get a nice boost. As for next year, it’s possible that more than 200 million iPhone 6 units could be sold, up from 170 million in fiscal 2014.
Additionally, with the introduction of Apple Pay this past October, millions of dollars’ worth of consumers’ purchases could possibly funnel through Apple’s coffers, with AAPL raking in 0.15% of every transaction. This won’t translate into much direct revenue, but it could strengthen retention rates and boost future hardware sales.
The introduction of the Apple Watch also is expected early next year. Although its release lags impressive products for Google’s Android, sales of the Apple Watch — being presented more like a luxurious piece of jewelry than a smart watch — are expected to reach 30 million next year.
All these various plays on mobile should result in another strong year for Apple in 2015.
Tech Stocks for Mobile: Google Inc (GOOG)
Like Apple, you can’t discuss the mobile sector without including Google Inc (GOOG).
The Nexus 6 smartphone has been off to a strong start after its late October release. Google’s newest smartphone is supported by every major cellular carrier in the U.S., and sold out within minutes after launch.
Past just Nexus 6, IDC predicts that, of the estimated 1.3 billion smartphones sold by the end of this year, 82.3% will run Google’s Android OS, compared to 13.8% on iOS and 2.7% on Windows Phone. For 2018, IDC expects 1.87 billion units sold, with 80% running Android.
Separately, Google stock should receive a boost the company’s controversial head-mounted device, Google Glass, becomes available to the public next year. Recent news of a partnership with Intel Corporation (INTC) to supply processors for the next version of Google Glass will bring additional strength, as Intel is expected to promote the device to its enterprise customers. Focus has shifted away from general consumer use — no doubt due to widespread privacy concerns — and marketing efforts will apparently be directed toward professional users.
But perhaps most interesting on the mobile front is Project Ara — a relatively unheard-of Google smartphone venture. Compartmentalizing the smartphone concept into an array of interchangeable components, Project Ara is Google’s modular design that could disrupt the entire industry. A universal frame houses individual device components such as the battery, camera, and GPS, with space for additional modules tailored individual interests. The result would be a plethora of removable, upgradable pieces that can be swapped as needed. If the concept takes hold, many of the industry’s current smartphone giants could find themselves fighting to retain customers.
At the end of the day, Google’s finances still will be led by its search business, but it still offers a lot of growth opportunity on the mobile front for 2015 and beyond.
Tech Stocks for Mobile: Intel Corporation (INTC)
Although Intel Corporation (INTC) does not manufacture mobile devices, the company plays a vital role by providing processors to many major OEMs.
Last month, INTC released expectations for 2015, projecting mid-single-digit growth, gross margin around 62%, lower capital spending, and a 6-cent dividend increase. CEO Brian Krzanich has shifted much of the company’s focus to making up for its late entry into the mobile market and working to achieve his goal of Intel silicon in 70 million tablets next year.
While it’s unlikely Intel stock will skyrocket in 2015, it’s still a wise addition to any mobile-centric portfolio of tech stocks. Intel has consistently remained on the front lines of computer processor innovation, and its newest 14-nanometer Broadwell architechture and Sofia 3G/LTE mobile chips should move the needle next year. Management expects 15% growth in 2015, fueled by partnerships with industry giants such as Google and Taiwan Semiconductor (TSM).
Currently, mobile is not Intel’s largest revenue generator, but rather its smallest. Sales of desktop and laptop platforms accounted for 63%, or $9.2 billion, of last quarter’s $14.6 billion in total revenue. In contrast, Intel’s mobile, software and Internet of Things divisions accounted for a mere 7.5% of revenue combined.
However, with the PC industry shifting between no growth and declining growth, mobile, software and IoT will become increasingly important to Intel’s bottom line.
Tech Stocks for Mobile: Facebook Inc (FB)
Like Intel, Facebook Inc (FB) isn’t really a “mobile” company in the traditional sense, but the social media Goliath is on track to be a powerful force in the sector.
Aside from the billions of dollars in revenue generated from ad sales, Facebook stock will benefit from continued News Feed display ad success, in addition to improving results of Instagram advertising.
Last quarter, Facebook’s ad revenue increased 64% year-over-year to $3 billion. Ad prices skyrocketed 274%, as marketers scrambled for position among the decreasing number of ad spaces. In a related space, the frequency of Instagram ads has been slowly increasing, and although monetization has been ramping up at a snail’s pace, expect the frequency of marketing messages to jump in 2015. It’s been estimated that ad revenue could be in the range of $100 million per quarter for Instagram alone.
Finally, Facebook stock should see a healthy boost when the company’s mobile payment system is released next year. This past summer, Facebook courted PayPal CEO David Marcus to help integrate a money-transfer feature into its Messenger app, which currently is used by hundreds of millions of people every month. Successful implementation could lead to a significantly higher number of Messenger users, as more than 1 billion people access Facebook via mobile devices every month.
As of this writing, Greg Gambone did not hold a position in any of the aforementioned securities.