Sometime back, when Facebook officially changed its business model to focus on Virtual Reality, it rebranded its name as “Meta” – a short name of “Metaverse”. I have tweeted then that ‘when the corporate does not find any more ways to grow their profits, they find a new business to do’. It is also called the “Blue Ocean Strategy”. Then is the turning point when VR (Virtual Reality) opens the door to the world. From a laymen’s point of view, we never experienced what it is going to be – but I was sure that it is going to change the world. It is going to be the new ‘Social Media’. People will sleep and wake up with VR in their heads in the future.
The reason, why do I recommend a biased allocation to Tech stocks is here.
In 2021, I wrote a Facebook post on how Tech is expected to shift our future. The one point I discussed in that post is “A problem of carrying the phone always with you”. The future will focus to reduce the conscious weight carrying and expand the limitation that we have on the small screen.
Yesterday, Apple released the next-generation communication device to the world. What is new in the product? We no longer need to carry our phones in hand. They call it a Multi-Reality technology, where unlike Virtual Reality where you completely interact only with virtual objects but Multi-Reality enables you to interact with both the Virtual and Real-world. That means you don’t have to take off your device from your head to talk to your wife who sitting in front of you.
How? We see now..!!
The iPhone moment
When the first iPhone was launched by Steve Jobs in 2007, it changed the perspective of the entire world on what a phone can do. The ‘technology shift’ then led to a new generation of mobile phones and opened up many businesses to make money.
The same excitement was seen yesterday when Tim Cook launched the new ‘Apple Vision Pro’, It is going to change the world what we see today.
The Virtual Reality vs Multi- Reality
Meta, Sony, Microsoft, and many more who engaged in games saw this coming, they were preparing to acquire the innovation companies like VR headsets, VR environments, VR apps, VR games, and VR consoles. The future that they see is much bigger than what we think today. But they never thought that Apple will give them this shock of introducing “Multi-Reality”. The drawback that VR had was, you have to take off your headset to communicate with the real world. The MR(Multi-Reality) actually addressed the issue. You don’t have to take off the device but still, people sitting in front of you can see your eyes and communicate. How cool it is…..!!! They have used AI to reprint your eye reactions artificially and project them to the front screen. So the person sitting in front of you can have real communication.
https://www.apple.com/apple-vision-pro/
Replace your desk
The mobile phone that we have today replaced the number of devices we used in the past like the Cameras, walkman, pager, desktop computers (to an extent), calculators, and many more. And this Vision Pro technology going to replace mobile phones and free our hands also will greatly impact desktop computers and expensive large-screen televisions.
Vision Pro technology will greatly impact desktop computers and expensive large-screen televisions.
Experience Matters
Not only Apple, the Meta already begin the VR world for rich social media experience. They have understood that “Experience” matters in the future. The next level of Social-Media will give rich experiences close to reality. Along with AI, the day-to-day work we do on organizing the data and presenting the data will get automated. Where the future generation will focus is actual productivity.
https://www.youtube.com/watch?v=-HI7yqmAnhY
In the race to give a rich experience to users, the companies engaged in the business are going to spend a hell a lot of money on R&D. And all the new tech they come out will going to make more money for them and open up the blue ocean for new businesses.
Bet on Tech Companies
As I always recommend my clients to allocate a portion of their investments to US tech and Indian Tech companies, because the next decade belongs to the new generation – the generation of young blood. They all going to spend hefty money on technology to experience the richness. All the products, right from ‘gaming’ to ‘tic-toc’s’ are launched for their uses.
By the time we move forward to the next 10 years, those people who are at the age of 15 today will turn 25 and fall in the earnings group. People on the other side at the age of 40 will move to their 50s and retire.
When the earning population moves to new technologies, the companies in new-tech business make a killing profit.
This trend is clearly visible post covid, when a large number of the population quickly shifted to technology, forcefully. The companies engaged in tech business made the killing profits.
The FAANG+ are a list of large companies engaged in next-gen tech solutions. This pack of companies making consistent performance over the last 5 years. Despite the increasing interest rates and job loss in the US.
| Company | 2022 | 2021 | 2020 | 2019 | 2018 |
| 28.20% | 35.40% | 33.40% | 28.50% | 53.30% | |
| Amazon | 27.40% | 38.00% | 37.40% | 28.40% | 84.80% |
| Apple | 27.50% | 82.30% | 87.50% | 26.40% | 74.50% |
| Netflix | 20.80% | 70.30% | 77.40% | 57.40% | 159.60% |
| Alphabet | 30.00% | 71.50% | 81.80% | 27.00% | 56.30% |
Conclusion
- The next decade belongs to the new technologies
- Invest in companies that engaged in next-gen business.
- Make conscious allocations to Tech funds or tech stocks.
- Having said that, please consult your advisor on the risk involved in funds and stocks before investing.