Invest in mobile technology | HOSTEL

From phone calls to text messages to online shopping, mobile devices have redefined the way people communicate over the past three decades. With new form factors like foldable phones and 5G networks, the mobile phone industry is poised for more growth in the months and years to come.

The term mobile has a broad meaning, encompassing devices such as cell phones, laptops, and other similar technologies.

Here, Investing News Network offers a comprehensive look at investing in mobile technology with an overview of the topic, where it’s heading in the future and, of course, ways to invest in mobile technology.

What is mobile?

As mentioned, the definition of mobile technology covers a wide platform due to the evolution of this technology; it covers everything from cellphones to handhelds and everything in between, like smartwatches.

Ever since the first portable mobile device was unveiled in 1973, mobiles have seen rapid evolution in terms of form factor, including size and shape, its capabilities of what can be done on a device.

The first phone offered 30 minutes of talk time and eight hours of standby time. Devices today promise up to a day of standby time. In February 2019, Avenir Telecom (EPA:AVT) under the Energizer brand demonstrated the evolution of mobile by introducing Energizer P18K Pop which offers up to 50 days of standby time meaning the phone stays on for 50 days if not in use.

Over the past three decades, mobiles have also seen an evolution in other areas like form factor as manufacturers try to make devices portable. While the first generation mobiles were called brick-shaped phones, then manufacturers introduced devices like flip phones and sliders which made the mobiles more compact. The launch of Apple’s iPhone (NASDAQ: AAPL) accelerated the move towards touch-only devices while the company’s iPad created a “revolution” in the tablet realm.

In February 2019, mobile phone makers showcased the future of smartphones by unveiling foldable devices that, compared to brick-shaped first-generation phones, feature foldable screens with slim bezels.

Samsung (LSE:SMSN) and Huawei unveiled foldable phones in 2019 and 2020. Others like Xiaomi (HKEX:1810, OTC Pink:XIACF), TCL and Oppo also showed their own versions of foldable phones that are expected to launch in the years to come. The foldable phone trend might be here to stay as Apple is also reportedly working on a foldable device which is slated for release in 2021.

Simply put, foldable phones have married the concept of a tablet and a mobile phone into one device.

Every manufacturer has their own version of foldable phones and hence the purpose of such a device varies by manufacturer.

According to Huawei, the new form factor “revolutionizes both productivity and entertainment experiences on a mobile device.” On the other hand, Samsung said its foldable phone offers new ways to multitask, which the company says “brings new experiences and possibilities to life for years to come.”

While the foldable phone space has seen the entry of several players, the crown of the first foldable phone goes to Royole FlexPai, which was introduced in October 2018.

Meanwhile, Nubia, an associate of ZTE (SHE: 000063, OTC Pink: ZTCOF) unveiled Nubia Alpha during Mobile World Congress 2019 which combined the features of a smartwatch and a smartphone into one category.

On the Apple Watch and Samsung Galaxy Wearables lines, the Nubia Alpha does most things a smartwatch can, including monitoring the health of smartphone features like making phone calls and taking Pictures.

Evolution of mobile

While first-generation phones offered nothing more than phone calls, mobile technology has evolved so much in recent years that calls no longer feature in the top 10 for everyday use.

Just like how the form factor of a mobile has evolved over the years, mobile manufacturers have introduced new features that allow mobiles to do more than make phone calls.

Blackberry (TSX:BB) with its 850 model in 1999 supported email and HTML browsing, paving the way for the massive evolution of smartphone data. The launch of the iPhone in 2007 marked the dramatic shift to apps and the touchscreen revolution.

A survey by mobiles.co.uk found that texting topped the charts in terms of daily mobile usage with 88% of people voting for it.

Checking email, Facebook (NASDAQ:FB), camera and reading the news made up the top five, while online shopping and banking were among the top 10 smartphone uses. At 42%, watching videos on YouTube was also listed as one of the daily uses of smartphones.

It is no surprise that people have rediscovered mobile usage as apps have drastically changed the capabilities of a mobile phone. Ericsson (NASDAQ:ERIC) in its February 2019 Mobility Report highlighted that voice traffic, which recorded 347 minutes of monthly usage (MMOU) per subscription in 2018, would show a compound annual growth rate (CAGR) of 0.7% between 2018 and 2024 In comparison, Ericsson said mobile data traffic over the same period is pegged at a CAGR of 30.9%.

The move to the digital space has been felt in many sectors, including banking. According to research firm KPMG, “digital platforms will become the preferred and dominant business model for banks and financial institutions in the future”. For example, Royal Bank of Canada (TSX:RY) revealed in June 2018 that it will place more emphasis on its digital platform in the coming years. As more people switch to its mobile banking app, Royal Bank is looking to shrink its physical banking space by 20% over the next five years.

It’s no understatement to say that we live our lives through our phones: banking, grocery shopping, watching movies, texting friends, finding a romantic partner, sharing photos on social media, health tracking, etc. The possibilities are endless, especially with the evolution of the application.

According to App Annie’s “State of Mobile in 2020” report, consumers spent an average of 3 hours and 40 minutes on mobile in 2019, up 35% from 2017. The mobile gaming segment dominates the space with 56% market share in 2019 with spending across all app stores expected to reach US$100 billion in 2020.

Brands are taking advantage of the intensive daily use of mobile devices by consumers to extend the reach of their advertising campaigns. According to App Annie, “advertisers will inject more than $240 billion in ad spend in 2020, up 26% from 2019.”

Future prospects

The International Data Corporation (IDC) has forecast that global smartphone sales will decline 11.9% year-over-year in 2020 “as the macroeconomic impact of the COVID-19 pandemic continues to affect consumer spending”. However, growth in this sector is expected to resume in the first quarter of 2021.

“Nationwide shutdowns and rising unemployment have reduced consumer confidence and shifted spending towards essential goods, which has had a direct impact on smartphone adoption in the short term,” Sangeetika Srivastava said. , senior research analyst at IDC’s Worldwide Mobile Device Trackers. “On the other hand, 5G is expected to be a catalyst throughout the forecast period, which will play a vital role in the recovery of the global smartphone market in 2021.”

Ericsson highlighted in a report the huge potential of 5G, predicting that investments in digitizing the industry will generate an estimated $619 billion revenue opportunity for telecom operators by 2026.

Additionally, Ericsson said telecom operators can pocket an additional 36% in revenue potential by 2026 from 5G-related market opportunities.

Additionally, a Counterpoint report published in February 2019 stated that the smartphone market presents a US$28 billion opportunity over the next three years.

The company pointed to a United Nations goal focused on providing affordable internet access in developing countries by 2020. Counterpoint added that 34% of the world’s population is not online and that 57% of people do not use mobile Internet access.

“To bridge the digital divide, industry stakeholders have developed a new category of devices, ‘smart phones’ which are powered by optimized software platforms that support internet applications and internet services in a phone form factor,” Counterpoint said in the report. .

When it comes to apps driving future mobile traffic, Ericsson predicts that video apps will continue to dominate the market as they are expected to contribute 74% of total traffic in 2024. The company said these apps will register a CAGR of 36%. between 2018 to 2024.

Additionally, social media applications are expected to grow at a CAGR of 24% between 2018 and 2024 and account for 8% of total mobile traffic.

Ericsson also predicted that the next generation mobile network, 5G, will account for 1.9% of mobile data traffic in 2020 before growing rapidly by 2024, where it will have a 25.4% share.

Invest in mobile technology

With such growth predicted in the mobile market, investors have many opportunities to invest in the sector, including:

For those new to the space, ETFs are a popular medium for investors because they provide investment opportunities for an entire industry rather than a specific company.

In telecommunications, ETFdb.com lists 9 ETFs, including Vanguard Communication Services (ARCA:VOX), Fidelity MSCI Communication (ARCA:FCOM) and iShares Global Telecom ETF (ARCA:IXP).

Investors looking to invest in a specific company can look to smartphone makers like Samsung (LSE: SMSN), Apple (NASDAQ: AAPL) and Xiaomi (HKEX: 1810, OTC Pink: XIACF) as these companies occupy the top places in terms of smartphone shipments for the first quarter of 2020.

Additionally, investors in the US can also look at the biggest telecommunications companies like AT&T (NYSE:T) and Verizon (NYSE:VZ) while those in Canada can look at “popular” companies like Rogers (TSX:RCI .B, OTC Pink: RCIAF), Bell (TSX: BCE), Telus (TSX: T) and Shaw Communications (TSX: SJR.B).

Is there a mobile category that interests you? Let us know in the comments.

Don’t forget to follow us @INN_Technology for real-time updates!

Securities Disclosure: I, Melissa Pistilli, have no direct investment interests in any of the companies mentioned in this article.

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