The Early Adopters of Emerging Tech

I’ll admit it. I didn’t expect the iPhone 7 to be in such short supply on the first day of their release.  New iPhone 7s were shipped to Australia on 16 September. The morning they arrived, distributors already had limited stock.

What’s strange to me is that the iPhone 7 is hardly a revolution. It’s more of an evolution. The phone is basically a better version of the iPhone 6.

Apple Inc. [NASDAQ:APPL] first generation iPhone was truly revolutionary. Released in January 2007, the iPhone was simple and elegant. Steve Jobs and his team laboured over eliminating features.

Jobs only wanted to focus on features consumers actually used. And then to develop those features better than anything else on the market.

Apple sold 270,000 units of their first generation iPhone during the first 30 hours of its release. Apple is known for its marketing genius. Yet I’ll wager many of the 270,000 units were claimed by early adopters.

Any kind of technology will always have its band of early adopters. An early adopter might make you think of tech geeks. But would you be surprise to if I told you criminals are avid early adopters of emerging tech?

Marc Goodman, who’s spent his career in law enforcement, has seen criminal early adopters first hand. While patrolling the streets Goodman saw gang members and drug dealers using beepers and mobile phones, long before they were in common use by the public.

Criminals can even build their own encrypted radio communications networks. And some are using robot submarines to ship cocaine to the US.

Staying one step ahead of criminals is not just an issue for governments. Companies and individuals also need to be aware of sophisticated criminals. We take risks every time we shop online by providing our credit card details. Even posting face frontal pictures on Facebook can be enough to put you at risk of having your identity stolen.

I’m not trying to convince you to be a hermit. But there are many opportunities for criminals to attack you in various ways. It could extend from credit card theft to making private information public.

As we invite more technology into our lives we run the risk of more attacks.

When someone else takes control of the wheel

You probably already know that your computer, phone and bank account can be hacked. This kind of criminal activity happens daily. And this is just the tip of the iceberg.

I’m guessing you’ve heard of driverless cars. There are driverless buses and trucks already on our roads. Driverless cars aren’t far off from becoming a commercial product. A common fear that people have when it comes to driverless vehicles is security.

Recently a group of Chinese white hat (ethical) hackers found a way to hack a Tesla Model S. They stopped the car in its tracks from 12 miles away.

And it’s entirely possible someone else could take the wheel of your future driverless car. Companies developing driverless tech are working to solve this problem. But just because we don’t have a solution that will always keep us safe, we’re not going to condemn this technology. Instead why not think of the investment opportunity?

The more we tasks we hand off to machines, like driving, the more we demand these technologies and systems to be secure.

This idea doesn’t strictly apply to driverless cars.

Unmanned vehicles, such as drones, have become hugely popular of late. Drone sales more than doubled in the past year, growing 224% from April 2015 to April 2016.

Of course drones can be used to harm the public. For example, suicide bombing could become a thing of the past. Not to give them any ideas, but terrorists now only need a drone strapped with explosives to cause destruction.

And, just like with driverless cars, companies are working to make drones safer. We already have technology today that can disable and take control of hazardous drones. But companies remain tirelessly working to stay one step ahead of criminals.

I’m sure you’ll agree there’s a big difference from hackers taking control of your smartphone compared to your driverless car or drone. Put in the wrong hands, technology can potentially be life threatening.

That’s why as tech progresses, I believe there will be a corresponding need for security. Even technologies we take for granted.

A US$170 billion market

Who could have imagined the impact smartphones would have in our daily lives 10 years ago? I’m betting very few.

It’s the same for businesses. We have passed the industrial age. We’re now in the informational age. Almost everything is converted to data and then stored to be analysed.

It’s no surprise that hackers take advantage of our reliance on tech. And the solution to cybercrime won’t come cheap. In fact, it’s a multibillion dollar solution.

J.P. Morgan Chase & Co. [NYSE:JPM] doubled their annual cybersecurity budget this year, from US$250 mln to US$500 mln. Bank of America Corp [NYSE:BAC] has gone on record stating an unlimited budget when it comes to combating cybercrime.

Even the US government has increased their cyber security budget from US$14 billion in 2016 to US$19 billion in 2017. That’s a 35% spending increase in just one year.

Worldwide spending on informational security is expected to reach US$170 billion by 2020. In 2015 this number was less than half, totalling US$75 billion.

These figures are all pointing to a likely boom for security related stocks.

That trend hasn’t been lost on our in-house technology guru, Sam Volkering. He’s already recommended a few top cyber security stocks to his readers over at Revolutionary Tech Investor. And he has his eye on several more.

Don’t be the investor who misses out on this enormous opportunity. Go here to learn more.

Regards,

Härje Ronngard,
Contributing Editor, Money Morning

From the Port Phillip Publishing Library

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Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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