Saturday, 4 May 2013

Whoever Holds The Power, Holds The Key

Many investors are looking for the next big technology company like Apple, Google or ARM. However it is hard to know where to start.  Most of the companies that have risen to the top started from a very low price and took years to develop and evolve into the companies they are today.  So what will be next big thing?

Energy has been and will continue to be major driver in the world.  Oil and Gas rule currently, however as the world demands cleaner and more efficient energy, we seek the next step forward.  Within many products, portable power sources (batteries) play an important role and as other areas of technology develops, be it microchips or processors, the power source will be the key to whether things can develop further.  Phones have been gradually increasing in size over the past few years, from small flip phones through to 5 inch touch screen phones.   The new Samsung Galaxy S4 can last about day during heavy use, but this phone has one of the biggest batteries for a phone to date.  The faster processors require more power, but now things have come to a head.        

At the moment most small devices such as smart phones and mp3 players use Lithium Ion batteries, however these have reached the optimum capacity.  Graphite is used to store the lithium ions in the anode of the battery, however since reaching capacity you are limited to the power output.  Whilst increasing size will increase the total number of ions, a sacrifice will have to be made for weight and size of the products.  This is clearly not a solution, however a vast sum of money has been put into researching alternative storage materials for the lithium ions.  Currently, Silicon is leading the way as it offers the best prospect for ion storage.  But with a number of issues surrounding charging the silicon based battery, composites will have to be developed.  The hopeful result would be between a 30-50% increase in battery life to the current ones, offering a significant boost in processor development. 

Whilst we are still some time off having the finalized product available, technology continues to be a fundamental driver in the evolution of mankind, and funds investing in this can offer long term prospect for returns.

Whilst a lot of the technologies for new battery sources are in development stage, tech funds cover a broad range of companies.  Newly floated companies or those that develop this technology will attract huge demand and be sure to be a quick inclusion in technology funds.
Those investing in technology funds or specific companies would have had a fairly poor couple of months.  Whilst some of the big names, Apple have sold off on slowing growth concerns it presents an excellent buying in opportunity for the long haul.  AXA Framlington Global Tech fund has  great spread of companies and would be sure to capture fundamental technological developments over the long term.

1 comment:

  1. Do you still think AAPL is still on a bear run as it changes from growth to value?

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