The High-Speed Network Gets Wheels

2013 is shaping up to be an interesting year in technology. PCs are on the wane as smartphones and tablets from the likes of Apple (AAPL), Google (GOOG), Samsung and others are on the rise. That's generating good demand for companies such as Qualcomm (QCOM), Broadcom (BRCM), Skyworks Solutions (SWKS), ARM Holdings (ARMH) and others, and challenging others, such as Intel (INTC). Other key trends to watch include cyber security, cloud computing and the smart or connected home. Another trend has been creeping up over the last few years. Consumers have been using connective technologies such as Bluetooth and GPS in their cars for their infotainment systems and vehicle diagnostics. I'd argue that 2013 is not just the tipping point for smartphones, in many ways it's also the tipping point for the connected car. This year, the shot in the arm for the connected car comes from the combination of General Motors (GM) and AT&T (T), which recently announced that starting with the 2015 fleet, most Chevrolet, Buick, GMC and Cadillac cars will get 4G LTE wireless connectivity. That higher-speed network will not only enhance existing OnStar services, it can turn the car into a 4G LTE hotspot for tablets, smartphones and other devices. RF semi plays for the connected car: Not only is GM a nice win for AT&T, which also counts Nissan (NSANY), BMW, Ford (F) and Tesla (TSLA) as customers, it also replaces Verizon Wireless in the OnStar relationship. While this may be a modest blow, last year Verizon Wireless acquired Hughes Telematics, which has relationships with Mercedes and Volkswagen (VLKAY). This car connectivity bodes well for companies such as Qualcomm, Skyworks and Peregrine Semiconductor (PSMI), which are vendors of much-needed radio frequency semiconductors to make this connectivity a reality. Apple brings Siri to auto manufacturers: What makes this outlook for the connected car even more interesting to me is that GM is working with Apple to bring Siri to the new infotainment systems in the Chevrolet Spark and Sonic. Apple is also working with Honda (HMC), BMW, Hyundai and others on Siri integration. While many are watching for the next iDevice from Apple, the company continues to build other ecosystems besides iTunes, iCloud and Passbook that will make its devices even stickier with consumers. Apple's Worldwide Developers' Conference (WWDC) is just days away, and it will be interesting to see if any of the much-anticipated keynote talks, including CEO Tim Cook's, tune in on this opportunity. Speech technology is on the move: I have been a believer in Nuance's (NUAN) voice and speech technology for some time, and I've recommended the shares to Real Money Pro subscribers. While it had been widely speculated, only recently did Nuance come clean and acknowledge that its voice technology is behind Apple's Siri. Given Apple's working relationships, that would seem to bode well for Nuance as well, but Nuance continues to improve its own position as voice/speech becomes the new interface. Last week, Nuance acquired Tweddle Connect, developer of an in-car entertainment platform that aggregates and delivers popular apps and services such as Pandora (P), iHeartRadio, OpenTable and Microsoft's (MSFT) Bing. Nuance plans to integrate Tweddle Connect, which counts Toyota/Lexus as a client, with its popular Dragon Drive voice command/text-to-speech platform. I simply love it when a company executes on where the market is headed rather than simply standing still. Year to date, Nuance shares are down 15%, and that means they are underperforming the Nasdaq Composite by more than 29%. Combine that with the growing emphasis on voice in smartphones, tablets, cars and more, and it's easy to understand why Carl Icahn has taken a more than 10% position in the company. Nuance shares are down 19% from their late-April high, and Real Money Pro subscribers should be all over this one. NUAN, Daily StockCharts.com View Chart » View in New Window »

The High-Speed Network Gets Wheels

The 'connected car' creates opportunities for tech firms that are in the right place.

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