Some People Will Get Stinking Rich on These Devices

Email
    Text size
Author Image for Michael A. Robinson

You've heard stories about him before - the savvy stock analyst who gets his hands on the hottest new smartphone before Verizon's first bulk order ships... only to smash it to bits so he can see what's inside.

The idea is simple: If you know which company manufactures a small - but key - component in the product, you can invest in it and make a bundle.

It's true. In technology, the people who manufacture the devices within the devices make a huge amount of money. Their investors do, too... especially when they get in right at the beginning.

That's why this is such a big moment for us.

Right now, I'm looking down the barrel of a device that will be made by the trillions - and in demand in every single sector of the economy. From agriculture, to smartphones, to eyeglasses, and even to diapers.

Imagine a device that in the next two years will become ubiquitous. Meaning that within five feet of your person, at any one moment in time, you'll likely find 20 or 30 of these devices.

That's how big this revolution is. I want you to remember that you heard it here first. I want you to see the numbers, too.

Getting in on this now is like getting in on Intel in 1970, when the $110 billion giant we know today sold its first chip.

Only, this is bigger...

We're About to Connect 500 Billion Objects

There's a new term people use to describe this sea change: the Internet of Things (IoT).

Basically, it means a variety of sensors will transform the world's objects and materials into smart, interactive devices. And this new wave that's already cresting will cause demand for sensors to skyrocket.

Cisco Systems Inc. (Nasdaq GS: CSCO) says IoT will connect a minimum of 500 billion objects. Each of them will have at least one sensor, and many will have 10 or more.

And the demand isn't tied to objects of "high tech." Everything from forklifts to watches will depend on these sensors.

So let's take a closer look at this surging sensor demand, starting with one of its more familiar applications...

Smartphones:
100 Billion Sensors (and Growing)

It's sensors that allow you to rotate your phone and have the screen turn with it. They can measure and compensate for the angle of tilt as you walk while at the same moment pinpoint your exact location, allowing you to be truly mobile.

Currently, there are a total of 5 billion cell phones in the world. Of that, roughly 1 billion are smartphones. But users are moving from basic cell phones to smart ones at a dizzying rate. Just among Android devices alone, 1.5 million are being activated every day.

Overall, industry forecasts predict the world will soon see 5 billion smartphones. And as the number of apps explodes, these phones will require as many as 20 sensors each. That totals a minimum of 100 billion sensors in this sector alone.

And remember, that doesn't count the sensors embedded in either tablets or laptops. Nor does it count the sensors in mobile commerce transponders that will soon cover nearly every checkout station in the world.

Auto & Infrastructure:
1 Billion Sensors on Our Roads, Billions More In Our Roads

In the meantime, sensors also are taking the auto industry by storm. Modern cars and trucks rely on a bevy of on-board sensors. And we're talking global production of more than 60 million light-duty vehicles each year.

Today, each of those cars and trucks can easily have several dozen sensors. They measure things like tire pressure, engine heat, oxygen flow, emissions, fuel level, and vehicle impact for air bag deployment, as well as GPS .

But as car makers release more advanced vehicles, the need for sensors is mushrooming. That's because many models now include self-parking features that alone need something like 10 more sensors.

And that doesn't count the sensors cars will need to automatically connect to local traffic networks that send and receive data to all vehicles within the grid. These sensors will transmit information on traffic , weather, and emergency alerts, in addition to helping avoid collisions.

Throw in big trucks and heavy machinery, and you could soon see sales of more than 1 billion sensors a year just for vehicles.

We're also starting to see the huge impact of "infrastructure sensors," where every railroad track, bridge, tunnel, highway, and building will be studded with sensors.

The United States has 7 million miles of roads and 600,000 bridges. They alone could easily require several billion sensors.

Oil & Gas:
1 Trillion Sensors Looking for New Energy

Yet, that's just a tiny fraction of what's occurring in oil and gas exploration. This field alone will require 1 trillion sensors that can measure motion and other factors needed to uncover new energy supplies.

It's all part of a global build-out known as The Central Nervous System For The Earth (CeNSE). Basically, energy companies will cover vast stretches of the planet in sensors.

These are so sensitive they can detect and track movement that is just one-billionth of that of a human hair. These self-powered devices will work together seamlessly to pinpoint the exact location of new reserves.

And talk about new efficiencies...

Tech-energy experts say these sensors could help uncover huge reserves around the Earth worth some $4.53 trillion - at half the cost of conventional exploration.

Construction:
500 Billion Sensors Building "Smarter" Homes and Offices

But even that's a small fraction of how many sensors buildings will require. To help conserve energy, we're starting to add "smart" windows laced with nanosensors that automatically filter solar heat for better climate control and energy conservation.

No one knows how many windows there are in the world. But the U.S. Energy Information Administration says there are more than 5 million office buildings. Many contain any where from several hundred to several thousand windows.

That doesn't take into account the millions of office buildings and hundreds of millions of homes and apartments outside the United States.

So, infrastructure sensors alone could total another 500 billion.

The Public Sector:
2 Billion Sensors Streamlining Farms and Cities

Global agriculture could require at least another 100 billion sensors as farms increase their yields for both crops and animals. Just in the United States alone, each year we harvest 10 billion animals, each of which will soon have at least one location sensor.

Crops also will push sensor demand. The 2007 Census of Agriculture counted some 922 million acres of farmland. Each acre will need dozens of sensors. They'll be placed in plants that can transmit their need for water and nutrients to sensors residing in pipes, pumps and sprayers.

Smart cities also will be big drivers of sensor sales. At a minimum they will be placed under asphalt, on street lamps, and on city buses. Through a smartphone app, residents can learn about things like open parking spaces, air pollution, and pollen count.

Big cities will lead the way. Paris alone has installed 1 million sensors so far and plans to add more. There are nearly 350 cities in the world with 1 million residents or more, each requiring the equivalent of at least one sensor per person just for the smart grid.

And there are thousands of cities the size of Santander, Spain, a hamlet with about 185,000 residents. City leaders there recently installed 12,000 sensors. The system has already saved Santander 25% on its electric bill and 20% on its garbage expenses.

Consumer Staples:
200 Billion Sensors for Our Clothes - and Diapers

Then there's the big trend taking shape in wearable computers. We're talking about running shoes, watches, bracelets, headbands, eyewear, earbuds -- even the clothes you wear will contain sensors that will give you all sorts of data.

That means every one of the 7 billion people on earth today will be wearing at least one sensor, and many will have several.

We haven't even counted sensors to be used by the world's military forces and logistics agencies, which easily could total more than 200 billion units.

And here's the thing...

For investors, the biggest role sensors will play also happens to be the most important one...

Health Care:
One Sensor-Driven Device to "End All Disease"

The presentation you've seen this week outlines the potential monetary benefits associated with an estimated 63,000% growth rate.

But this sensor story isn't just for investors...

We all know the numbers: 1.5 million Americans have a heart attack every year. More than 570,000 die of cancer. Respiratory disease, Alzheimer's, strokes, and diabetes kill 410,000 more.

And I'm confident the device I've been showing you could change all of that... and yes, for less than $50.

So it's not just the most disruptive innovation I've been a part of during my 34-year career. It's also the most inspiring. And remember, this whole sensor revolution is just getting started.

I can't wait to see all the ways these things will change - and improve - our lives...

About the Author

Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.

... Read full bio