A little more than a month ago I wrote a column on MSN Money about finding "the next big thing" in technology. The next big thing, I argued, would be a disruptive technology that changes the existing game and sends rivals to the scrap heap.I picked seven "next big things":
- The "Cell" microprocessor
- The home-entertainment gateway
- The home-entertainment hub
- Internet telephony over mobile phones
- Electronic networked health care records
- Mapping everywhere
A Deluge of EntriesWell, of course, the shrinking violets they are, Jubak's Journal readers buried me with heated nominations that often began "How could you leave out ... " Here are the best of the bunch from that reader mail -- five more, to be exact. I have not vetted any of these ideas, and readers should certainly not regard them as picks in any way. I see this effort as brainstorming. I have, however, checked to make sure that there is a public way to invest in each idea, and that none of these stocks are such micro-caps that a mention from me here would be easily manipulated by speculators. Lastly, I have provided some basic information that you might need to begin your own research. The ideas offered here and in the earlier column are intended to spark creative thinking that will lead to more ideas and, finally, after research and due diligence, to a stock or two you might want to buy. This column, like the earlier one, is just the first step in that process.
The ultracapacitor: "A good candidate for a disruptive technology is the ultracapacitor. Take a look at Maxwell Technologies ( MXWL). Maxwell is a member of the
Hybrid Consortium, and Maxwell is included in the PowerShares Wilderhill Clean Energy ETF ( PBW). Ultracapacitors are replacing or supplementing batteries in many applications from hybrids to fuel cells to automatic meter-reading devices." -- Joe.
Nanotube memory chips: "I'd submit the following disruptive technology. I'm in the semiconductor business, and I think the upcoming bottleneck out there is memory. Nantero is a company that has found a way to use existing semiconductor manufacturing processes and add carbon nanotubes to create a memory device that is three times more dense than any existing technology. It is like flashing memory (like the little USB "thumb" drives), but with storage sizes 1,000 times larger than existing hard drives. It is also nonvolatile, meaning it does not need to have constant power applied to it to maintain the memory states. To complete the scorecard, it is also as fast as existing DRAM memory technology." -- Mike.Nantero is still a private company, but investors can own a piece of it through the publicly traded Harris & Harris Group ( TINY) nanotech portfolio (market capitalization $290 million). Nantero has so far raised $31 million in private investment from venture capital firms that include Charles River Ventures and Draper Fisher Jurvetson.
High-density power converters. "I have a potentially disruptive technology company for you to look at. Vicor ( VICR) has come out with a new power converter that converts and manages electric power more efficiently and with higher power densities than ever before. Sony ( SNE) has licensed the technology from Vicor, and, I believe, the technology is also being used in conjunction with the new Cell microprocessor that is being made by IBM ( IBM), Sony and Toshiba." -- Fletcher.
Global positioning on silicon: "Before anyone can use the map produced by Tele Atlas and Navteq ( NVT), one needs to know its current location. I believe SiRF Technology Holdings ( SIRF) is the only GPS technology enabler in this field." -- Amin.For those who don't know what SiRF Technology does, let me paraphrase the company description on MSN Money: SiRF Technology Holdings is a supplier of global positioning system (GPS) semiconductor solutions designed to provide location-awareness capabilities. The company's chip sets and software use the GPS satellite system in orbit around the earth to tell products such as cell phones and cars where they are on Earth. The chip sets can include two integrated circuits, a radio-frequency integrated circuit and a digital-signal processing circuit -- and standard embedded GPS software. Founded in 1995, the San Jose company now has a market capitalization of $1.8 billion and had $170 million in sales in 2005. The nine analysts who follow the stock project 32% annual earnings growth over the next five years. Those same analysts project that the company will earn 83 cents a share in 2006.
Organic light-emitting diodes: "Here's another one: OLEDs (organic light-emitting diodes) replacing LCD (liquid crystal displays) in all devices and creating entirely new display and lighting product categories. Such new categories might include ruggedly flexible (display wrapped around consumer products), transparent (windows during the day become bright advertising panels by night) and task and room lighting panels. Companies with significant patent portfolios are Universal Display ( PANL), Eastman Kodak ( EK) and Cambridge Display Technology ( OLED)." -- Larry.
Two Private Companies to WatchA couple of other potentially disruptive technology companies didn't make this list of five because they are still private. Financed at this stage in their growth by private pools of venture capital or by corporate partners, these companies are intriguing, but there isn't any way at this point for individual investors to put a single dollar into them. In a former life, I covered the world of venture capital investments and venture-capital-funded companies, and two of the companies that readers nominated stand out to me for the quality of the investor groups backing them at this stage. That's no guarantee that these companies will succeed in bringing a single product to market, but it is enough for me to note and file away the names for the future. These two private companies to watch are:
- inPhase Technologies, a holographic data storage company with an investment group that includes New Venture Partners, Hitachi (HIT), Bayer MaterialScience and Nanotech Partners, an investment pool founded by Mitsubishi.
- A123 Systems, a battery technology spinout from the Massachusetts Institute of Technology backed by Motorola (MOT), Qualcomm (QCOM) and venture capitalist Sequoia Capital.