Right, so I’m an old guy. Or at least a middle aged guy. I’m in my mid-40s and the whole smartphone thing is something I enjoy but don’t really bring into my inner being. The PC revolution started when I was in junior high and then grew up with me when I went to college in the late 80s. I’m comfortable on PCs. I know how they work, and I understand how they think.
But the generation that I’m raising is used to a much smaller screen. A new survey by the Pew Internet & American Life Project shows that 25 percent of teenagers access the Internet mostly on their smartphones. 25 percent…24 percent of teen boys and 34 percent of teen girls. Toss in the fact that more than a third of American teens have a smartphone in the first place and that’s a strong demographic trend that shouldn’t be ignored.
I’m not trying to sound some sort of silly alarmist bell like when my parents thought all girls who wore legwarmers were easy or something (it was the 80s, we were all quite mad). No, I’m trying to highlight a growing trend in American life of which you – as a proper buy-and-hold investor – should take advantage: the fact that smartphone usage is growing faster than anyone can truly predict and that it’s undergoing that growth generationally. The teens today will not use anything but smartphones for the rest of their lives. It’s time to be on top of that.
There are a few names to get excited about, of course. One can’t mention smartphones without bringing Apple Inc. (NASDAQ:AAPL) into the equation, especially when it comes to a demographic like teens, which tend to be very trend and peer sensitive. Having an iPhone can instantly impart that critical high school ‘cool’ factor, and that means a strong install base. Also, once a teen is on a platform, they prove to be ‘sticky’ and don’t want to change. It’s an advantage for Apple Inc. (NASDAQ:AAPL).
The other publicly traded monster in the smartphone sector is Google Inc (NASDAQ:GOOG), of course: an open source operating system with a strong user base, Google’s Android system powers a LOT of smartphones out there in the world. Especially internationally, Android systems accounted for about three-quarters of the smartphone activations worldwide in 2012. That’s nothing to laugh at. I’m uncertain how sticky an open source platform can be, and according to my research (asking my 12-year-old girl’s friends) having an Android phone isn’t as cool as an iPhone. Still, Google Inc (NASDAQ:GOOG) is a good investment and here to stay, just like Apple Inc. (NASDAQ:AAPL).
Current media darling Research In Motion Ltd (NASDAQ:BBRY) is in the hunt but a second ranker right now. At one point BlackBerry was THE smartphone to have if you were in the business world. However, that doesn’t impart any cool factor except in the kids who get voted ‘most likely to succeed,’ so they’ll go away. Still, the Z10 – available this month – is getting a lot of positive press and may do well in that market. But it would do the firm well to make a push to appeal to the younger set to build an installed base of loyal users. Still, it’s available in 91 countries and could make significant gains trying to take advantage of the overseas market. It’ll be fun to watch them try.