The New Keystone Technology Igniting the Next Industrial Revolution
Editor's note: The number of Internet-connected gadgets is increasing at a staggering rate...
So it's no wonder several tech industries are booming today.
In today's Masters Series essay – adapted from the August issue of Stansberry Innovations Report – co-editors Brett Aitken and Christian Olsen discuss another burgeoning tech trend worth watching today...
The New Keystone Technology Igniting the Next Industrial Revolution
This technology is going to change everything.
There have been three industrial revolutions in America over the past 200 years.
And at the heart of each one is a core technology that drives all other technologies in the revolution.
First came the steam engine. The steam engine was critical because it powered a new generation of factories, ending our reliance on water power. It enabled us to build factories anywhere in the country.
Next came the harnessing of electricity. It powered the light bulb, refrigerators, washing machines, and air conditioning. Electricity forever changed communication as it made technologies like the telegraph and telephone possible.
Then came the digital age.
The critical technology at the heart of this revolution was the Internet. The Internet paved the way for world-changing inventions such as smartphones, mobile payments, online banking, social media, and revolutionary businesses like Apple (AAPL), Google's parent company Alphabet (GOOGL), Netflix (NFLX), and Amazon (AMZN).
In August, Apple became the first company to reach a $1 trillion market cap. The market values the five largest tech companies – Apple, Microsoft (MSFT), Amazon, Facebook (FB), and Google – at $4 trillion. They generate almost $700 billion in annual revenue.
And of course, fortunes were made along the way.
As of August, Amazon founder Jeff Bezos was the world's richest man, worth a staggering $156 billion. Bill Gates – the founder of Microsoft – is No. 2 at $95 billion. And Mark Zuckerberg – the founder of Facebook – is worth $65 billion.
But it's not just the founders who got rich... Investors who got in early on these great companies have also been able to create legacy-sized wealth.
The share prices of many successful tech companies, like Amazon, have suffered some huge drawdowns over the years. Most investors can't tolerate the volatility. But if you bought Amazon back in 1997 and held on through August 2018, you'd be up an incredible 120,000% according to Bloomberg.
It's hard to fathom such big numbers. But consider this: A simple $10,000 investment when the stock went public would now be worth more than $12 million.
If you bought Apple around the same time and forgot about it until August 2018, you made 49,000% gains.
The noteworthy thing is that these incredible wealth-building success stories only took a little more than 20 years to play out for investors.
Now, we are entering the fourth industrial revolution in America. And just like the ones that came before it, a new and critical technology lies at the core that could make early investors wealthy...
5G will be so big and so powerful, it will single-handedly drive all other technologies over the next several decades.
This new technology is all about one thing: sending massive amounts of data across the Internet at incredibly fast speeds...
The concept might seem basic, but there is nothing basic about it. 5G isn't just an upgrade. Compared with 4G that we have today, it's night and day.
As a 5G mobile phone user, you will see a roughly 10 times improvement in bandwidth and 10 times improvement in latency. For operators, 5G will allow for up to 1,000 times more devices per square meter than 4G. This matters for things like real-time remote apps and cloud-based gaming. It essentially allows you to have a "dumb" screen but play in real time as if you have the world's largest computer processors in your hands.
Big breakthroughs like artificial intelligence... driverless cars... augmented and virtual reality... and the "Internet of Things" (IoT) will change every aspect of our lives. And 5G will make these seemingly sci-fi technologies available to us – in real life – every day.
This is a massive trend that will support the next decade or two of technology and service innovation. And we're still in the early days.
Companies are just starting to build out the 5G infrastructure. It has not rolled out on a mainstream level yet.
But it won't stay that way for long...
For example, cities like Los Angeles, Chicago, Dallas, New York, Stockholm, and Dubai have provided testing grounds for 5G. We saw 5G in real time at the Mobile World Congress in Barcelona earlier in 2018.
4G technology quickly grew to be one of the largest segments of the global economy, worth an estimated $6 trillion annually in revenue. That's almost as big as the entire global construction industry. But here's the thing...
5G is going to blow way past $6 trillion.
Global research firm IHS Markit found 5G will unlock more than $12 trillion in revenue across multiple industries and support more than 22 million jobs around the world.
The 5G Upgrade Cycle Is Upon Us
5G is closer than you may realize...
Cellphone carriers AT&T and Verizon are already preparing 5G wireless services in more than a dozen U.S. markets. These initial rollouts – due by the end of 2018 – will involve hot-spot devices or home receivers. These are the precursors to fully functional 5G networks, which will probably go live sometime in mid-2019.
When it does officially arrive, 5G's performance will blow you away...
Earlier in 2018, 5G tested in two cities. In Frankfurt, Germany, the simulations showed a 900% increase in download speeds over 4G. And in San Francisco, the simulations showed increases of nearly 2,000%.
The faster speeds of 5G will allow for more reliable streaming and a near-real-time communication link...
During the first week of the World Cup earlier in 2018, 93 million out of the 486 million attempts to live-stream games failed. 5G will allow you to watch games live without delay. Just imagine donning a set of virtual-reality goggles and watching a soccer game as if you're actually sitting on the field. This is just one of the applications made possible with 5G.
In both of the test locations, data moved from point A to point B much faster than with 4G. In San Francisco, download latency (lag) times dropped from 115 milliseconds to just 5 milliseconds... or one two-hundredth of a second. That's essentially data transferring in real time.
The lower latency of 5G is going to open a lot of doors. Consider autonomous cars, for example. If the communications link is near real-time, you can basically control the car remotely. This decreases the cost per car since much of the processing power can be in the "cloud."
Lightning-fast speeds and ultra-low latency are possible because 5G will utilize additional "spectrum." Radio spectrum refers to the bands of electromagnetic frequencies that are used to transmit bits of data through the air. End users can capture that data with a device such as a radio, television, or telephone capable of receiving and deciphering the information.
We take wireless technology for granted. Every time you turn on your radio, TV, computer, or mobile phone, you are using radio spectrum. Swiping your credit card in your local store or using a remote to open your car or garage door requires radio spectrum.
You may be using radio spectrum right now to read this report on a wireless device or a computer connected to Wi-Fi.
5G will generally operate on higher-frequency spectrum than 4G. Higher frequencies typically carry a lot more information than lower frequencies. Plus, they're less congested than those used by 4G.
However, higher speeds and less congestion come at a cost. The higher frequencies don't travel through walls or other obstructions as easily as lower frequencies do.
Therefore, cellphone carriers will need to build hundreds of mini cellphone towers in and around urban areas. They may even have to mount small antennas on streetlights, telephone poles, and building rooftops. These "small cells" will blanket the coverage areas, helping to propagate the 5G signals indoors.
On top of all that, the cell carriers will need to upgrade their existing base stations and antenna arrays. And they'll need new smartphones with chipsets that are 5G-capable.
There are about 2.5 billion smartphone users around the world. Starting next year, many of these consumers will gradually replace their devices with 5G-capable ones. Smartphone makers will need to start obtaining chips this year to put into the handsets.
There's a lot of new equipment needed for 5G... And we expect the companies that will provide it will be among the big winners.
Regards,
Brett Aitken and Christian Olsen
Editor's note: A team of Stansberry Research analysts just got back from the annual Consumer Electronics Show, where they were on the search for the latest blockbuster tech innovation. While they were there, they spoke with industry experts, scientists, and company executives. And for the first time ever, we got it all on film. Watch this brand-new presentation right here.