When people used to talk about the internet, they just used to think of computers. Want the internet? Well, then, you need a computer.
But then Steve Jobs realised computing power was now so advanced that you could invent computers that were essentially just touch-sensitive screens, and so he created the tablet and the smartphone.
These days you can carry these portable devices with you, and thus have the internet with you, on the train, the car and the beach.
Buy a new TV these days, and almost all of these TVs are ‘smart’: they have the internet built in. Samsung has released a smartwatch, and I suspect Apple will follow soon. Google will soon launch Google Glass. The picture is of a ubiquitous internet: what people call the internet of things. So, here are my three plays on the internet of things.
Vodafone
Why is a telecoms company called Everything Everywhere? Because the internet is everywhere, and it will soon control everything.
When electricity was developed in the 18th century, it was the internet of its time. It took decades to build the electricity networks that turned what once seemed a mysterious curiosity into an everyday utility for everyone to use.
The internet will soon arrive in cars, in homes, and anywhere else you can think of. Just think what the impact of this could be, say with cars.
What if a car could monitor and learn how you drive, and then give tips about how you could improve your driving? By doing this, you could become a safer driver, and it would also reduce your insurance premiums. What if the car could tell you of accidents and congestion? What if it could help you drive your car, perhaps preventing thousands of accidents?
This is the emerging field of telematics, which will soon be a multi-billion pound industry. And Vodafone (LSE: VOD) (NASDAQ: VOD.US) has recently bought into this with its recent purchase of car technology company Cobra Automotive.
But wherever the internet of things appears, whether it be in cars, homes or outdoors, you will have a myriad devices communicating via mobile networks, and via Wi-Fi and broadband. This means that telecoms companies such as Vodafone are at the forefront of this revolution.
ARM
Think of the millions of devices which will make up the internet of things. The telecoms companies will connect these devices. But the chip companies will provide their processing power.
These devices will require fast but light processors. They will require processors that produce minimal heat and draw minimal energy.
ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) is the world leader in this field. Whereas Intel chips are energy-hungry and bulky, the RISC architecture of ARM-designed chips makes them ideally suited to provide the engines for these myriad devices.
Quindell
Regular readers will know I am quite a fan of Quindell (LSE: QPP). While Quindell have come to be known mainly as insurance outsourcers, they are first movers in the field of telematics.
They have invested in the technology, and are busy building alliances in this industry. In two or three years I expect this investment to come through as increased profits.
Why a company that has such a strong stake in the future is so cheap is beyond me, but Quindell is another of my plays on the internet of things.
