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All Contents © 2017The Kiplinger Washington Editors
By Brad Moon
| August 2017
Every now and then, a company puts out a “game-changing” product … and that can mean a number of things. For instance, it could be something that’s so successful that it leads everyone else in the industry to follow suit. Or it can be a product that’s so successful that it meaningfully changes a company’s fortunes. On Wall Street, this phenomenon tends to be the stuff of tech stocks, which frequently generate new breathtaking products that change the landscape for consumers and sector rivals alike.
The iPhone is a perfect example. This wasn’t the first smartphone, but Apple Inc. did manage to create what many believed was the best smartphone, accelerating the industry’s growth and leading to myriad copycats.
Not to mention, it made a lot of shareholders a boatload of money.
It’s not always easy to identify a game-changing product. For instance, When Amazon.com first released the Amazon Echo smart speaker in 2014, very few people predicted that it would become the center of the connected home. But it has, and it has led to a widespread rush from other tech titans to produce their own smart speakers.
So, what’s the “next big thing”? Here are 10 stocks that will soon be releasing new products I believe have game-changing potential.
Prices and data are from the original InvestorPlace story published on August 25, 2017. Click on ticker-symbol links in each slide for current prices and more.
This slide show is from InvestorPlace, not the Kiplinger editorial staff.
When it comes to game-changing product releases, one technology company is on everyone’s mind right now. That would be Apple Inc. (AAPL). One of Apple’s most important iPhone launches in years will reportedly happen on September 12. (Editor's note: On Sept. 12 Apple unveiled a new iPhone 8 and 8 Plus with respective starting prices of $699 and $799. The company also will debut a high-end iPhone X in November that starts at $999.)
The new iPhone is the first complete redesign of Apple’s smartphone in three years. The smartphone is expected to feature an all-glass design, AMOLED display with minimal bezels, wireless charging, a revolutionary new camera for advanced AR support and a super-premium price tag.
This all-new iPhone is expected to start a new “supercycle” of consumers upgrading their current iPhones. Between that and the excessively high margins, then, the iPhone 8 has the potential to boost AAPL stock — already trading around all-time highs — even more.
And because the smartphone industry tends to follow Apple’s lead, you can bet the new iPhones will be a game-changer in more than one way.
Samsung Electronics Co Ltd. (SSNLF) — Apple’s primary smartphone rival, which trades on several exchanges — just announced its latest phablet, the Galaxy Note 8, and it’s scheduled for a Sept. 15 release.
The Galaxy Note 8 is a critical product for the company, as a monster launch would finally put the memories of the Galaxy Note 7 disaster behind it. In 2016, reports that the Galaxy Note 7 spontaneously caught fire sent shares in a brief funk, though they’ve since recovered and set new all-time highs earlier this year.
Big sales also would help to play spoiler for Apple’s iPhone 8 launch, possibly even stealing some sales — especially if the iPhone 8 turns out to be as expensive as rumored and supplies of Apple’s new iPhone are constrained.
Fitbit Inc. (FIT) hasn’t had a stellar year. In fact, it has had a pretty wretched publicly traded life ever since its 2015 IPO. At less than $6 per share, Fitbit is off nearly 90% from its all-time high a month after going public, and it’s more than 70% below its IPO price.
The past year has seen FIT shares drop by more than 60% as the Apple Watch and inexpensive Chinese fitness trackers have cut into its sales. But there is hope for a turnaround in Fitbit’s fortunes — in the form of the company’s first smartwatch, expected in October, just in time for the holidays.
Apple has had its way with the wearables segment, with the Apple Watch simply dominating the smartwatch market. However, if the new Fitbit Ionic smartwatch — which incorporates IP acquired from Pebble — is a hit, it could not only give Apple a real smartwatch contender, but it could spark a massive recovery rally in beleaguered FIT shares.
GoPro Inc. (GPRO) is another tech company that has had a lousy ride for most of its publicly traded existence. While shares initially surge in the months following its offering, they’ve since plunged 90% since their 2014 highs, and sit 60% below their 2014 IPO price of $24.
The company has suffered increased competition for its core action cameras, manufacturing challenges, a critical product recall and layoffs.
However, GoPro is trying to stage a comeback and has several new products in the pipeline, including one potential game-changer.
The GoPro Fusion brings virtual reality video to the consumer market, starting this fall. It’s a so-called “prosumer” camera that can capture spherical video that’s necessary for use in virtual reality. If VR catches on the way action camera footage did — though it would be even better if it had a wider audience than that — the Fusion could put GoPro on top of that market.
A GoPro Hero6 action camera is expected to launch this year, and we also could see a follow-up to the Karma drone.
Amazon.com, Inc. (AMZN) kicked off the whole smart speaker industry with the Echo, and after thousands of “skills” and multiple new Echo products (including cheaper models and even versions with video cameras), the company still dominates the market.
But that original flagship Amazon Echo is getting old.
With competition increasing and companies like Apple focusing on Echo weak spots like its plastic build and mediocre sound (still important in a smart speaker), Amazon is expected to release a follow-up to the original later this year.
Rumors have the Echo 2 being shorter, rounder, covered with a premium cloth effect instead of bare plastic, and sporting more drivers for improved audio performance.
It might not be the groundbreaker the original was, but a new Echo would go a long way toward keeping up Amazon’s momentum and helping the e-commerce giant remain atop the smart speaker heap.
Microsoft Corporation’s (MSFT) Xbox One got off to a rough start upon release and has been thoroughly trounced in sales by the PlayStation 4 ever since.
However, Microsoft has decided to shake up the current generation of game consoles in hopes of reversing its fortunes.
The Xbox One X boasts that it’s “the world’s most powerful console,” with claims of 40% more power than any other game console, making it ideal for 4K gaming.
The $499 Xbox One X is available for pre-order now, with a November release date — just in time for the holiday shopping season. And in a release out Friday, Microsoft thanked its fans for pre-ordering “more Xbox One X Project Scorpio Edition consoles in the first five days than any Xbox ever.”
The Xbox division as of yet is not a major driver of MSFT stock, but this is a game-changer in that it puts Microsoft back into serious contention in the console wars.
Ewen Roberts via Wikipedia
Microsoft isn’t the only company about to release a new game console. Nintendo Co., Ltd. (NTDOY) is as well, and if it lives up to the hype, sales could be huge.
Nintendo has a hit on its hands this year with the revolutionary Nintendo Switch. But it saw almost as much hysteria over the NES Classic Edition — a limited edition all-in-one console with 30 classic games that sold out repeatedly through the holidays last year. Nintendo ended up selling more than 2 million NES Classics in five months before discontinuing it.
This fall, it’s time for the SNES Classic Edition.
The latest Nintendo mini console delivers starting Sept. 29. Just like last time, pre-orders sold out almost immediately, with Amazon, Wal-Mart Stores Inc (WMT) and Target Corporation (TGT), among others, running out of stock in minutes.
While other companies are focusing on massive firepower and big ticket pricing for their consoles, Nintendo is making a case for the appeal of inexpensive, retro gaming.
Its success is bound to spawn copycats.
Alphabet Inc.’s (GOOGL) Google pulled off the seemingly impossible last year when the company released its first smartphone and actually made a splash.
In a mature smartphone market where newcomers rarely succeed, the Google Pixel quickly won praise for being one of the best Android smartphones on the market. It didn’t hurt that Google owns Android and kept one of that operating system’s newest features — Google Assistant — as a Pixel exclusive for months after launch.
Still, Alphabet sits in the shadow of Apple and Samsung. That may change, however, with the Google Pixel 2 — the follow-up of its first branded smartphone. There aren’t many details, though it appears it will be powered by Qualcomm, Inc. (QCOM) Snapdragon 836 SoCs.
Considering the original is estimated to have moved 1.8 million units since launch, a new version that leverages that initial success plus improvements — not to mention an XL version with a 5.99-inch display — could push Google into an even more influential position in the smartphone world.
Recent reports say Google is eyeing an Oct. 5 launch.
Tesla Inc. (TSLA) technically has already started delivery of the Model 3, but considering only a handful of people have one of these in their parking lots right now, I’m including this in today’s list.
Tesla has had excellent success with the Model S and more mixed results with the Model X. However, both of those were luxury products. The Model 3 is Tesla’s attempt to take electric cars mainstream. And if it succeeds, Tesla might not only truly kick off the age of the electric car, but change the face of the global auto industry.
The first 30 Model 3s were delivered at the end of July; production is just beginning to ramp up. Tesla CEO Elon Musk expects to produce 100 more vehicles in August, 1,500 by September and 20,000 cars per month by the end of 2017.
Tesla has already made EV cool to the well-heeled. Now we’ll see if he can make it accessible to the masses.
Wait, didn’t we already tackle Apple?
Yes, your memory serves you well. But while the iPhone 8 is perhaps the most critical Apple product launch of the past few years, the company has other game-changing products in the pipeline that are (or could be) launching soon.
For example, the HomePod — Apple’s take on the smart speaker — arrives in December, pitting Siri and advanced audio performance against the mighty Amazon Echo. With the market for smart speakers predicted to top $13 billion by 2024, the HomePod has the potential to at least move the needle for AAPL stock if it’s a hit.
Also expected to make an appearance in the near future — possibly as soon as this fall — are the Apple Watch 3, a 4K Apple TV with HDR support and the iMac Pro. Each of these will be big releases for Apple. The new Apple Watch is expected to cut the iPhone cord with cellular connectivity, the Apple TV will finally support 4K video and the iMac Pro should have unprecedented graphics firepower.
This article is from Brad Moon of InvestorPlace. As of this writing, he held none of the aforementioned securities.
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