The iPhone 8 is set to hit the streets this fall, and all indications are it'll be the smash hit we've been expecting.
Of course, the Apple fans out there are excited, as we knew they would be. I'm fired up, too, but for an entirely different reason.
Now, it's not because of what the iPhone 8 is - the latest iteration of an outrageously popular and undeniably cool piece of personal tech...
And it's not for what the new iPhone represents - the 10th anniversary of "iEverything"...
Rather, it's because of what the iPhone 8 has...
Biometrics.
That's right: The iPhone 8 (and, in short order, nearly every smart device that hits the market) will have some extremely sophisticated biometric technology onboard, largely thanks to this company...
This Is a "Backdoor" to Every Big-Cap Mobile Maker
Fingerprint recognition, voice recognition, iris recognition, and facial recognition are just some of the biometric functions we'll come across more and more in our daily lives.
Fact is, we're already using them to some extent; the last generation of smartphones from Apple, Samsung, and LG, for instance, included fingerprint readers, and tens of millions of Americans are on a first-name basis with Siri, Alexa, and "OK Google."
All of these can keep your device safe, read you curated news, order you a pizza, or call you a Lyft.
As the list of indispensable devices gets "smarter," the demand for biometrics for security or device-input reasons is growing at an increasingly rapid rate.
In 2015, the biometrics industry was worth roughly $10 billion. But according to Grand View Research, by 2025, biometrics promises to be a $60 billion industry - a 600% increase in just eight years.
And that's conservative. A recent report from Research and Markets projects a compound annual growth rate (CAGR) of 23% over that same time frame, with the industry hitting $70 billion by 2025.
The difference alone between these two estimates is about what the entire biometrics market was worth barely three years ago.
This is becoming the must-have tech.
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
The "Demand Picture" Couldn't Be Much Better
Biometrics used to be reserved for science fiction. Until now, biometrics work was going on inside the R&D departments of big tech players, or, on the other end of the spectrum, by niche players.
There wasn't great demand for these technologies because they needed a lot of focused support to work. It was difficult (and expensive) at the time to fully realize biometrics technology, even as the world's computers and devices grew more tightly interconnected.
This connected-ness is fueling a raging demand for authentication and access, two things without which devices are useless.
Hacking and stealing login information, banking information, medical records, passwords - name it - has grown easier with each new surge in computing power. It's conceivable a criminal could "hack" a system with little or no computer savvy of their own.
Hacking biometrics, on the other hand, is orders of magnitude more difficult and complicated, especially when confronted with features like fingerprint or iris scanners. Biometric devices, by their very nature, are much more secure than traditional usernames and passwords, and so the time to strike this niche is now.
And of course, they're convenient, too. So convenient, in fact, that I expect we won't be able to live without them much longer.
Voice and facial recognition, seen in Google Home devices that can recognize and manage six different accounts simultaneously, allow us personal experiences with our technology, enhancing the user experience, increasing the "Wow!" factor, and adding fuel to explosive demand.
And because of the great strides in artificial intelligence and machine learning, the more you interact with these devices, the more they "know" what you do and want, and the more valuable they become to the companies that crave "Big Data."
And they're all willing to pay big dollars to get it...
There Are Billions in Untapped, As-Yet Unrealized Value Here
Incredibly, this sector is still very much under the radar. That means we're certain to enjoy "first-mover advantage" when we move into the stock I'm going to show you.
For the moment, investors and, importantly, analysts are still focused on devices' adoption of the technology, rather than looking out for the companies that are building the next generation of biometrics-equipped devices and apps that will in short order become as ubiquitous as Google Maps and Siri are today.
Companies, research institutions, and even the military - all racing forward in biometrics and smart tech - are all turning to one company to make it all happen.
I mean Synaptics Inc. (Nasdaq: SYNA)
This "now" company is actually over 31 years old, but for all intents and purposes, the firm made its "debut" in 1992, when it developed the first touchpad for portable computers.
In that day, laptops were limited in their size by the inclusion of a tracking ball. Synaptics' touchpad was a game changer that - you guessed it - Apple adopted for its legendary Macintosh "Mac" PowerBook 500 series of laptops in 1995.
Synaptics then pioneered "capacitive touch," which relies on the electrical properties of your skin (as opposed to "resistive touch," which requires a "pointer" object like a stylus), in 2005 for mobile phones' keypads, jolting the growing mobile phone market with yet another breakthrough technology.
The one major challenge Synaptics has had recently is its competition; they've "forded the moat," taking market share as consumer tech firms are looking to grow their margins wherever they can - especially since China's consumer-fueled economy has cooled.
To regain an edge, Synaptics has been on a bit of a buying spree this year. Within the past few months, it has bought voice and audio firm Conexant Systems Inc. and the multimedia services division of Marvell Technology Group Ltd. (Nasdaq: MRVL).
The goal is to keep Synaptics one step ahead of the competition and grow its role in the interactive-device space for the future.
For example, Conexant's voice technology is used by Amazon's personal assistant, Alexa. And Marvell's group is very involved in "smart car" and autonomous car technology.
Both of these acquisitions are incredibly savvy; they'll boost Synaptics' bottom line immediately and offset some of the slowdown in the broad mobile device market in the first half of the year.
The last quarter of the year, on the other hand, promises to be red hot. DigiTimes, a daily newspaper reporting on Synaptics' competition - the Chinese and Taiwanese semiconductor, electronics, computer, and communications industries - has released research that predicts a 191% increase in TDDI (touch and display driver integration) chips for the second half of 2017.
TDDIs are used in all smartphones and mobile devices. And as the new models from major producers are changing the size of their screens as well as their resolution, they will need new TDDI chips for the new formats.
While Asian producers are expecting to grab 40% of that, Synaptics should get the 60% "lion's share" of that windfall.
It's time to move...
This Is the Perfect Time to Buy
Synaptics has essentially been confusing investors most of the year, but the growth potential couldn't be more obvious...
My conviction on this stock is perfectly clear.
Its Q3 2017 report back in April included the news that it was buying Conexant and Marvell's division. That naturally helped boost shares.
But its more recent August Q4 2017 reports threw a wet blanket on the stock; concerns over its "mild" guidance knocked about 20% off the share price in short order. In fact, the company is down more than 25% over the past 30 days.
I believe there's a high likelihood that Synaptics kept its forward guidance low as it digests its two acquisitions and starts to leverage those operations. Of course, the market severely punishes companies that don't post wildly optimistic forward guidance these days. But usually that punishment is short-lived, which means we have an opportunity to move on Synaptics while its premium has been cut - which gives us the perfect entry point.
You see, those same Q4 numbers that jolted the shares lower also showed revenue up 34% year on year. The new pessimists also forgot all about strong revenue from Q3.
That's to our great advantage. That 25% plunge looks more and more like an outrageously tempting discount event. Its sharp acquisitions will be a powerful wind at its back in coming quarters. What's more, its dominating share of the TDDI chip sales hasn't been priced in yet, although there were signs on Friday that the news was sinking in. Still, that's going to make for serious tailwind in the coming months.
By the end of this year, you could have up to three new iPhone launches, new Samsung models, and of course, new Google Pixels. Going into the year-end holidays, the personal assistants and household concierges from Amazon, Google, and Apple will be huge.
Synaptics has just wired in more - many more - avenues of growth, yet the market is still looking at it as if nothing has changed. Take advantage of that at $40 or lower, and watch as these shares rocket toward $80.
Michael is a huge believer in "early," pioneer investing in companies and technologies that just aren't on the mainstream radar yet. That's why he's so excited about the legal cannabis sector - and why he's published The Roadmap to Marijuana Millions. It's a kind of "weed investors' bible" with more than 30 of his very favorite "pot stock" plays and research. Big caps, micro caps, retail, biopharma, edibles - this sector is packed with opportunity and brimming with potential gains. Click here to learn how to get your copy.
Follow Michael on Facebook and Twitter.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.