You Have to Read What Google Inc Chairman Eric Schmidt Just Said About the Internet

Google Inc Chairman Eric Schmidt believes “the Internet will disappear.” What does that mean for Canadian companies like Sierra Wireless Inc. (TSX:SW)(NASDAQ:SWIR)?

| More on:
The Motley Fool

“I will answer very simply,” Google Inc’s (NASDAQ:GOOG) executive chairman Eric Schmidt told the audience, “the Internet will disappear.”

That’s a provocative thing to say, especially when you are the chairman of the largest Internet company in the world. But contrary to what you might think, Schmidt is not calling for the end of the Internet.

Instead, he’s saying that the Internet will be seamlessly integrated into our lives, through sensors and connected devices. As reported in the Hollywood Reporter, Schmidt elaborated on his comment at the World Economic Forum in Davos, Switzerland:

“There will be so many IP addresses… so many devices, sensors, things that you are wearing, things that you are interacting with that you won’t even sense it,” he explained. “It will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room.”

Today, more than 99% of all things in the physical world remain “unconnected.” But that’s about to change. Soon, just about every device you use — including your car, appliances, television, alarm system, and thermostat — will be connected to the Web.

It’s called the Internet of Things, or IoT, and the opportunity here could be huge. According to Cisco Systems, Inc, the IoT could become a US$19 trillion market. For perspective, that’s about the market capitalization of every company in the S&P 500 combined!

The IoT will be bigger than 3D printing, the personal computer, and even the iPhone. Cisco predicts that by 2020, 50 billion devices will be connected to the Internet. That compares to the roughly 10 billion devices connected to the Web in 2014.

This might be news for some readers, but early investors have already made fortunes. Semiconductor stocks — such as Qualcomm, Skyworks Solutions, and Texas Instruments — have posted double-digit gains over the past few years. The demand for new wireless chips is overwhelming.

Canada’s own Sierra Wireless Inc (TSX:SW)(NASDAQ:SWIR), the biggest seller of equipment to connect machines over cellular networks, was the third-best performing stock in the S&P/TSX Composite Index through 2014. Revenues have increased for six straight quarters, explaining why the company’s shares have soared more than six-fold over the past two years.

But here’s the most important point: you haven’t missed the boat on the IoT. We’re still in the early innings of this story. Even if the market only ends up being half as big as Google and Cisco are predicting, the opportunity here could still be enormous.

That means there’s still time to stake your claim in the new Internet gold rush.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of Google (A shares), Google (C shares), and Sierra Wireless. Tom Gardner owns shares of Google (A shares), Google (C shares), and Qualcomm. The Motley Fool owns shares of Google (A shares), Google (C shares), Qualcomm, Sierra Wireless, and Skyworks Solutions.

More on Tech Stocks

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Businessman holding AI cloud
Tech Stocks

AI Will Transform Everything: Investors, Be Early Adopters and Buy These 3 Stocks

Investors looking to invest in companies doing big things in AI should consider these three stocks for their portfolios.

Read more »

stock research, analyze data
Tech Stocks

Forget Shopify: These Unstoppable Stocks Are Better Buys Today 

Should you consider buying Shopify stock while rivals consider a buyout or should you go for stocks with a stronger…

Read more »

A colourful firework display
Tech Stocks

2 Potentially Explosive Stocks to Buy in March

These two growth stocks are destined for many more years of market-crushing returns.

Read more »

edit CRA taxes
Tech Stocks

TFSA Millionaires Are Learning They Can Still Be Taxed

If you day trade stocks like Shopify (TSX:SHOP) in a TFSA, you may be taxed.

Read more »

Shopping and e-commerce
Tech Stocks

Where Will Lightspeed Stock Be in 5 Years?

Lightspeed stock (TSX:LSPD) continues to be touch and go, so what might happen in the next five years?

Read more »

Technology
Tech Stocks

Here’s Why Constellation Software Is a No-Brainer Tech Stock

Are you looking for tech stocks to add to your portfolio? Constellation Software is a no-brainer!

Read more »

Businessman holding AI cloud
Tech Stocks

2 AI Stocks That Wall Street Likes Better Than Nvidia

NVIDIA (NASDAQ:NVDA) may be trendy but Shopify (TSX:SHOP) has more upside according to Wall Street.

Read more »