There’s no denying that the IoT industry is on the rise. IDC projects the industry will be worth $1.7 trillion by 2020, but where can you invest to get a piece of the pie? Read on for tips on how to profit from the IoT boom. (image via CISCO)
There’s been a lot of talk surround the IoT lately, and for good reason. The new technology is on the rise. In a recent report, the IDC projected the IoT industry would reach $1.7 trillion by 2020. Companies across the board have announced new investments in the IoT sector, including Microsoft, IBM, Apple and Intel, but where should you invest your money if you want to play the market?
As far as investing goes, the key is to always have a diverse portfolio. How diverse depends on the level of risk you’re comfortable with, and the amount you can invest. If you can afford the higher price per share of some of the larger tech giants, including Apple, Google and Microsoft, you’ll probably be okay investing in these companies for long-term gains. If you have less income, or want a quicker turnout, you may want to check out smaller niche companies that are both growing and projected to maintain a good standing in the IoT.
Top 20 list of the IoT major players (via IoT Analytics)
IoT Analytics recently released its report of the top IoT companies right now. It’s no surprise that Intel, CISCO, IBM, Google and Microsoft round out the top five, but there is more to consider when identifying the best investment. IoT Analytics based its findings on a combination of the company’s designated IoT sector, press and social media, but it did not include upcoming projects that could alter the scales.
Consider Upcoming IoT Technologies
One of the biggest things to consider before investing is the future of the particular company or industry. If you just looked at IoT Analytics’ Top 20 list and invested in all 20 companies, you’d be disheartened to find Blackberry (number 18 on the list) obsolete in 10 years (just our guess…). But you can use the data as a starting point.
Apple, for example, is number 7 on the list. Knowing, however, that the Apple Home Kit is set to be released sometime this fall (supposedly), now is a great time to invest in the consumer-driven company. Microsoft is another example. Microsoft is number 2 on the list. If you knew that Microsoft was planning on investing in IoT consumer products, software and manufacturing solutions in the next few years, you could see why investing in the company’s IoT sector could prove to be lucrative.
If you’re going to have a diverse portfolio, however, you’re going to want to invest in some no name companies with big potential. In a recent article published by Nasdaq, the company highlighted three small companies that could prove to be some of the most lucrative IoT investments around. (I figured the article was more of a shill for those stocks. But, continuing on...)
Let’s crunch some numbers. Let’s say you have $5,000 to invest. If you invest in Apple shares at $1,000 a pop, you can afford to buy 5. Down the road, let’s say they increase to $1,500 in value. If you sell, you just made $2,500. That’s pretty good. If you invest in a smaller company, such as Sierra Wireless, however, you may get your shares at $100 a pop. Now, you can buy 50 shares. If the company explodes and the shares increase to $1,000 in value, you just made $45,000. Even if the shares only increased to $500 each, you’ll still walk away with $400 extra per share, totaling $20,000. Now that’s really good. But you have to know where to invest.
Nasdaq selected Sierra Wireless, Invensense and CalAmp as some of the best IoT companies to invest in. If you have the money, I recommend you invest in some of the giants too, or do some research and see if Google, Apple, Microsoft, etc. are outsourcing any of their upcoming IoT work to smaller tech companies. If so, they’re likely to benefit from the deal, and so can you, if you invest there. There’s plenty of money to be made from the IoT boom. If you plan your moves well, you’ll benefit too.
My true take on this is not to invest... but make some sort of IoT product - get scooped up by these big companies. Live the dream.
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