23 Apr Sensing a New Opportunity to Profit

Samsung announced this week that its smart watches have been approved as official medical devices. The Galaxy Active 2 watch can now monitor blood pressure.

It can do this through the use of clever sensors in the back of the phone. And these sensors and the associated software are going to be the next big trend in technology.

If you think about it, technology really takes something we do one way and finds another, easier and faster way of doing it. Think what electric cars are doing to the automotive industry or that now you have a mini-computer in your pocket that replaces a phone, camera, calculator, pager, diary, games machine and internet browser.

Now these mini-computers are with us 24/7 software developers are beginning to re-imagine how we can capture the data in the physical world and use it better. To do this they need sensors.

According to the press release, Samsung figured out how to use photoplethysmography heart rate sensors and electrocardiograms, plus software to monitor blood pressure. Previously the only way to get this measurement was with an inflatable cuff, the kind your GP uses every time to you go into their practice.

South Korea’s Ministry of Food and Drug Safety now says the Galaxy Active 2 smartwatch can perform the same measurement.

Just imagine what this means. Your smartwatch can be monitoring your blood pressure 24 hours a day, capturing that data and possibly remitting it to your GP to help them analyse what is happening to your body and also to alert you if you get a sudden drop or spike.

This is truly revolutionary stuff. And it is sensors that make all this possible

To capture this new trend in digital transformation, the best play is Sony (SNE – NYSE or you might like 6758 which is the Japanese listed entity).

Sony is by far the largest supplier of compact optical image processors in the world. In March Sony unveiled a new range of smartphones with artificial intelligence powered image and audio sensors.  They also showed off their new fifth generation wireless modems.

The new phones feature a 3D time of flight sensor for autofocus with automated blur reduction in video and a 360 degree reality surround sound experience.

Whilst the phones are very impressive it will take some time to win back market share from the Apple-Samsung duopoly. But it is not the phones that will make the big revenues for Sony. These image sensors are perfect for the video surveillance industry and sensors will be everywhere with the new 5G networks.

Shares have been retreating down to $62 recently and represent excellent value at only 1.1x sales and a PE of only 14. This stock could easily trade at $90 within the next 12 months offering a 40% gain to those who can sense where the world is heading

Buy SNE under $65