Four Disruptive Technologies for the Next Decade

By Ian Wyatt, Big Idea Investor | AAPL | Sep 13, 2005 | comment

NEW SPECIAL REPORT: Four Disruptive Technologies for the Next Decade

Get Your Complimentary Copy Today ' Click Here 

I am pleased to announce that last week Rising Star Stocks released a Special Report titled Four Disruptive Technologies for the Next Decade that is now available to all active subscribers and trial members.  If you are not an active Rising Star Stocks subscriber, I encourage you to join us for a free trial membership today by clicking here ' you'll immediately receive a complimentary copy of this 38-page report.  Click here now to get your copy today. 

Inside this Special Report we provide research on four of the most appealing emerging technologies, and also our report on our favorite investment opportunity within each sector.  We believe these revolutionary technologies will increase productivity and the standard of living around the world, creating a tremendous opportunity for investors.    

Tomorrow's four greatest technologies are today's greatest investment opportunities. I just released a 38-page Special Report titled 'Four Disruptive Technologies for the Next Decade' which I'm giving away as a special bonus to new Rising Star Stocks trial subscribers.  Your copy is waiting for you ' click here now to get your free report today.

Are you asking yourself, 'What are disruptive technologies, and why are they important?'  If so, let me explain. 

Disruptive technologies are innovations that will transform the status quo, altering the way we do business and live our lives.  I believe technology ultimately drives economic growth, prosperity, and productivity, and that long-term investors must have exposure to the next wave of great technologies. 

That's why I set out to complete a report on top emerging technologies geared toward individual investors.  I have spent weeks conducting extensive research of numerous new technologies, with this report presenting the four areas that I consider to be the most promising ' with enormous long-term potential. 

In 'Four Disruptive Technologies for the Next Decade' I focus on four new technologies that my research indicates are going to achieve widespread use as businesses and consumers move to these new technologies.   

In this report we focus on the following four disruptive technologies: 

1.       Biometrics: Using physical characteristics for identification

2.       Nanotechnology (nanotech): Creating exciting new materials by working at the subatomic level

3.       Radio Frequency Identification (RFID): Tagging of any physical material with a unique ID for remote monitoring 

4.       TV-Over-Internet-Protocol (TVoIP): Delivering cable/satellite quality video over Internet lines including DSL or ethernet

Are you interested in knowing my investment outlook for each of these disruptive technologies?  Do you want to understand the complete importance of each?  Do you want to know when each is expected to achieve commercialization, and when the profits should start rolling in?  Are you interested in knowing exactly what companies stand to profit? 

If you answered YES to any of these questions, I highly encourage you to get a complimentary copy of 'Four Disruptive Technologies for the Next Decade' (a $99.95 value) with a 30 day trial to Rising Star Stocks.  Get your copy now ' click here, it's free with a complimentary 30 day trial membership. 

I look forward to giving you this just-released Special Report.  It is available for download today for all new trial members to my Rising Star Stocks newsletter advisory.  I've also included my report on the nanotechnology sector in this issue of Big Idea Investor.  I hope this article will provide you with some insights into the nanotech space and the research in my complete 38-page report, Four Disruptive Technologies for the Next Decade. 

Warm Regards,

Ian Wyatt
Publisher
Big Idea Investor


INDUSTRY OVERVIEW: NANOTECHNOLOGY

By Ian Wyatt, Editor-in-Chief, Rising Star Stocks and Christian Zouein, Research Analyst

In spite of the recent widespread use of the term nanotechnology, thanks in part to the mass media, few investors actually understand nanotechnology beyond knowing that it could be the next BIG opportunity of the decade.  Nanotechnology is a challenging field to invest in, due in large part to the hype surrounding it, but also because of the complexity of the science behind the technology.  So what exactly is nanotechnology? 

Nanotechnology refers to the manipulation, measurement, and placement of matter at the atomic level, meaning around a billionth of a meter.  The reason nanotechnology is groundbreaking is not because it deals with really small stuff, but because the basic laws that order our universe breakdown at that level. The laws of classical physics yield to those of quantum mechanics, in which the powerful bonds between atoms overtake the effects of gravity, allowing scientists to develop new materials, called nanomaterials.  Nanomaterials can be manipulated to be smaller, lighter, stronger, and tougher than any materials in the natural world.  Scientists are then able to use these new materials in a wide variety of uses, basically replacing the less effective natural materials with materials that have been manufactured to improve performance in some way.   

Carbon nanotubes for instance have a reported tensile strength twenty times that of steel with at only one sixth the weight. In addition, carbon nanotubes significantly improve electrical and thermal conductivity.  Looking back to the industrial revolution as an example, the technological advances made possible by nanotechnology are similar to those made possible by the move from brittle pig iron to the purified iron we use today.  Seeing as the move from pig iron to the real thing were precursors to the invention of little things like the engine and the railroad, there is real reason for excitement about nanotechnology. 

The potential market for nanotechnology is difficult to gauge, as, at this early stage, we are still learning of potential uses for the technology.  Scientists are using nanomaterials to make improvements in nearly every sector of the economy, in areas including manufacturing, micro chips, apparel, drug delivery, textiles, mining, and automotive industries.  Nanotechnology is expected to lead to 40x improvements in microchip data storage, allow the development of more effective drugs, transform solar power into a viable source of energy, save hundred of billions of dollars for the petrochemicals industry by simplifying the refining process, make stain resistant clothing, allow the liquefaction of coal into diesel, and even make tennis balls last twice as long.  And that's just the tip of the iceberg.   

Any attempt to put a number on the potential industry size would be guesswork at best, but that has not stopped some analysts from trying. The National Science Foundation, hardly a foolhardy group, estimates that nanotechnology will be a $15 trillion global market by 2015.  A study by the European Commission estimates the current global market is $2.5 billion euros, and projects that number will grow into the trillions in a decade. 

It is also telling to look at spending on nanotechnology research, as the demand for nanoproducts has not yet reached its potential.  Global spending on nanotechnology research in 2004 is estimated to have been $8.6 billion.  Of that number, government spending accounted for $4.6 billion, split roughly equally between North America, Asia, and Europe.  Corporations spent roughly $3.8 billion on nanotechnology oriented R&D with 46% of spending coming from North America, 36% from Asia, and just 17% from Europe.  The remaining investment in this revolutionary technology has been done by venture capitalists.  VC funding declined in 2004, reaching only $200 million, down from $325 million in 2003 and $386 million in 2002.  All this spending is being funneled into approximately 1,500 companies involved in the nanotechnology sector, 1,200 of which are start-ups, and 670 of which are based in the United States, according to advisory firm Lux Research.  The outlook for 2005 is looking good and based on a strong first half this year, analysts at Lux are expecting VC funding to increase to between $300 and $400 million. 

The food industry, for example, is pouring money into nanotechnology research.  Nearly every major player in the food sector is trying to incorporate breakthroughs in nanotechnology into their products.  Companies like Heinz, Nestle, Hershey, Unilever, Keystone, and Kraft are using nanotechnology to improve food textures, deliver nutrients to the body more effectively, develop product packaging that senses spoilage, and change the structure of cooking oil to prevent the body from absorbing it.  The Miller brewing company is using nanotechnology in those plastic beer bottles that feel like glass but are actually made of plastic nanoclay composite.  In addition to preventing breakage and limiting violent disturbances at sporting events, nanoclays extend product life by keeping out more oxygen, and prevent beer from absorbing any flavors from the plastic.  We expect nanotechnology to have similar, unheralded impacts on many other industries.  Major technological breakthroughs will be made, but a large portion of nanotechnology's potential is in small product improvements that are adopted in major ways.  

The U.S. Government is doing its best to make sure nanotechnology realizes its full potential.  President Bush recently signed the 21^st Century Nanotechnology Act, setting aside $3.7 billion in federal funds to be put towards grants for nanotechnology research over a four year period.  Desperate to keep up, the EU's European Commission earmarked a whopping 17.5 billion euros for research, ensuring that at least 1.3 billion euros is spent on nanotechnology. 

Since most nanotech companies exist on grants and private investment alone, they have been able to perpetuate themselves without needing to turn a profit.  While this is to be expected with young research-driven companies (think biotech), many companies working in the nanotechnology sector seem to either be focused more on scientific achievement than turning a profit, or to have thrown all their eggs in one basket, focusing on one product, often of questionable utility.   

Overall, we feel that this is an exciting technology sector and we believe that long-term growth investors should actively seek out investment opportunities in nanotech.  While it is likely that the most ground breaking applications are not yet known, we are confident that they will come.  With the market expected to be 400 times larger in ten years, there is a lot of growth to be shared by a relatively small number of companies.  And unlike the dot-com bubble, there are high barriers to entry that will dampen competition.  Few entrepreneurs, however ambitious, have the integrated understanding of biology, physics, chemistry, materials science, computer science, mechanical engineering, electrical engineering, and quantum physics needed to succeed in nanotechnology.  Companies also tend to have a strong portfolio of patents and significant equipment costs, reducing the risks to investors of getting involved in an over-hyped fly-by-night operation.  While we wouldn't recommend investing your kid's college fund in this sector, nanotech is a smart choice if you're looking for speculative long-term growth.    

This nanotechnology industry overview comes from Rising Star Stocks' just released 38-page Special Report Four Disruptive Technologies for the Next Decade.  If you enjoyed this overview and would like to review our report on our favorite nanotech company, and review in-depth research of three other disruptive technologies and our favorite stock picks, I encourage you to sign up for a 30 day free trial to Rising Star Stocks today and download our complete Special Report.  Even if you cancel, the report is still yours to keep.  Click Here Now ' It's Free!

OUT TO THE CINEMA: THE BIG BUSINESS OF MOVIES

By Vijay Balkissoon, Staff Writer, Big Idea Investor 

With the passing of Labor Day, summer has unofficially come to an end.  The end of summer marks the end of many things: warm weather, baseball, idle school children, and the summer movie season.  Summer is typically the time for Hollywood blockbusters to reign supreme.  However, this summer has come to a close with only one blockbuster to speak of ' Star Wars Episode III: Revenge of the Sith, which grossed over $300 million.  

While blockbusters were lacking, there were several films that performed adequately at the box office.  Time Warner's  (NYSE: TWX) Warner Bros. Studios saw Batman Begins, Charlie and the Chocolate Factory, and The Dukes of Hazzard all do well at the box office, while Time's New Line Cinema unit scored ' pardon the pun - with Wedding Crashers.  Rounding out the bigger films of the summer was War of the Worlds and DreamWorks Animation's (NYSE: DWA) Madagascar.  None of these films, however, had flocks of moviegoers returning for second and third helpings ' a key ingredient for a true 'blockbuster' film.   

All summer long, buzz from the film industry has been that the summer movie business has been slow, slow, slow.  But as they say, the proof is in the pudding.  Hollywood's summer pudding showed that compared to last year's summer box office receipts, this year's box office receipts were down a significant 9%. One positive note for Hollywood was that the summer movie season closed on a strong Labor Day weekend.  Even with the tragedy of Hurricane Katrina putting a huge damper on business, this year's Labor Day weekend actually surpassed last year's box office by about one percentage point.  

But strong close aside, the lackluster summer movie season has many people asking questions.  Is Hollywood losing its touch?  And is Hollywood's business model broken?  

The decline in box office receipts shouldn't be so surprising.  It is a decline that has been occurring ever since the television was invented.  According to Edward Jay Epstein, Slate's 'Hollywood Economist,' in 1948, 90 million Americans, or 65% of the population, went to the movies at least once in an average week.  In 2004, however, only 30 million Americans, or 10% of the population, went to see a movie once in an average week.   

This change reflects a trend that has been decades in the making ' Americans are increasingly spending their entertainment dollars on home entertainment.  Nowadays, while there are certainly significant numbers of people who count themselves as 'regular' moviegoers, this number shrinks every day.  The irregulars come out when a so-called 'event movie' comes out, something akin to Titanic or the aforementioned Star Wars Episode III ' otherwise irregulars keep themselves quite entertained at home thanks to DVDs, digital video recorders (DVRs) such as TiVo (Nasdaq: TIVO), and digital cable or satellite television.  Hollywood's business model is highly dependent on such high grossing 'event movies.' These big movies rake in the cash that allows Hollywood studios to make more films and to advertise new films.   

Advertising and movie promotion is key for movie studios, and ultimately can play a big part in a movie's financial success or failure.  Occasionally word-of-mouth can result in a big-time or all-time blockbuster (a la Titanic) but sometimes it's not nearly enough (this summer's Cinderella Man).  Hollywood spends an enormous amount of money advertising its films.  According to Epstein, the studios' average cost for advertising a film in 2004 was $30 million, an especially astounding figure when you consider that the barometer for a hit movie is one that grosses over $100 million.  Factor in the expenses for making a film and the theaters' cuts and not much is left at the end, if anything at all. But don't feel sorry for Hollywood just yet. 

The real money in movie making comes from DVD and VHS sales and TV licensing.  Most of the big six movie studios ' Disney, Fox, Paramount, Sony, Universal, and Warner Bros. are a part of large conglomerates and have rather convenient relationships with those conglomerates' television and cable networks, while smaller players like Lion's Gate Films (NYSE: LGF) have it rougher.   

Hollywood keeps exact sales figures a secret, but is estimated that of the six major studios' total revenues of $46 billion in 2004, that only $7.4 billion, or 16% of total revenues, actually came from box office sales.  While DVD sales and TV licensing produce good income, there is always more money to be made.  The dip in box office revenues and the associated media attention that has come with this dip has had some people in Hollywood openly talking about making radical changes in the way things are done. 

Disney's new CEO, Robert Iger, proposed that the industry move towards the simultaneous release of theatrical films and videos.  In 2004, the average gap between a film's theatrical release and its release to video was four months and 16 days, with this gap continuing to shrink.  But the rationale for closing the gap even further, or the elimination of the gap altogether, is that rather than spend more money to advertise the release of a movie on DVD and VHS separately from the studio release, the studios can spend all their ad dollars at once.  This would effectively allow for the simultaneous marketing of the studio release, and the release of DVDs or VHS either for purchase or rental - something consumers would certainly embrace. 

Maverick entrepreneur Mark Cuban, for one, has plans to test the viability of the simultaneous release of a film on DVD, cable, and at movie theaters.  Next week we'll tell you about Cuban's plan and we'll also look at some home entertainment trends as well examine the movie rental business, a sector that like Hollywood studios, has many questions swirling around it about its viability or lack thereof. 

NEXT WEEK:  Staying In to See a Movie.

APPLE UNVEILS THE IPOD NANO 

On August 29^th, in invitations sent to reporters, Apple (Nasdaq: AAPL) promised a 'major announcement' during the week of September 5^th.  On September 7^th, at a gathering of about 1000 journalists, Apple CEO Steve Jobs delivered just that, by unveiling the company's newest product, the thin as a pencil iPod Nano.  Jobs, who pulled the tiny MP3 player out of his fifth jeans pocket, dubbed the Nano, 'the biggest revolution since the original iPod.'  

Bold proclamation aside, Apple's iPod Nano will undoubtedly be a huge seller for the back-to-school season and the all-important holiday season.  The flash memory-based Nano, which we wrote about last week, is set to replace the iPod Mini.  The Nano, available in black or white, comes in two capacities.  The 2GB version will retail for $199, while the 4GB version will go for $249.   

In other flash news, Samsung yesterday introduced a brand new flash memory chip.  Samsung's 16-gigabit NAND flash memory chip is equivalent to 2 gigabytes of storage.  We would look for this new chip to find itself in applications in everything from cell phones and digital cameras to MP3 players too - Apple is said to be buying its Nano flash memory from Samsung.   How much thinner and lighter can MP3 players and other consumer devices get? Stay tuned.

Comments on this article

There are no comments for this entry yet.

Add your comments