My 3 Plays On The Internet Of Things: Vodafone Group plc, ARM Holdings plc And Quindell plc

The internet of things will soon be here. This is how you can invest in it.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

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.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Prabhat owns shares in Vodafone and Quindell. The Motley Fool owns shares in Tesco.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »