You’ve heard of e-commerce, but let me tell you about the next big thing in tech that’s going to make you a lot of money – mobile commerce.
Mobile commerce, or m-commerce for short, is using devices like cell phones and tablets to conduct online transactions.
It was a trend I first shared with you back on June 20, 2013; a time when almost no other analysts were recommending m-commerce stocks. But on that day, I suggested that you buy shares of NXP Semiconductors (NXPI) because it was a top supplier of chips for mobile devices.
If more and more shopping was going to be done through smartphones, phone makers would need the chips to make sure that could happen.
At the time, the stock price for NXPI was roughly $30 a share. It hit a recent high of $202.78 – a gain of 575%.
Now, with all the exciting technological advancements since then, I’m going to give you the inside track on what’s next… a new type of mobile transaction…that will allow for voice-controlled shopping from the comfort of your car.
I believe this will be the next big thing in a sector valued at $2.9 trillion.
And I have the one investment to make before this trend really takes off.
The company I’m talking about is Cerence Inc. (CRNC). It has scored a stream of wins with carmakers from Mercedes-Benz to BMW to Ford to Toyota with AI-powered voice-assistant platforms and other driver aids.
Unlike Google’s Voice Assistant or Apple’s Siri, Cerence’s AI isn’t branded. The company provides carmakers with the full chipset and helps them integrate it into their vehicles.
So for example, this allows Mercedes to use the same distinctive voice and have similar functions throughout its car line.
Currently, Cerence has over 1,420 patents and its technology is installed in more than 325 million cars worldwide.
That’s allowed the company to develop state-of-the-art AI that you can speak to naturally, as you would to a passenger, instead of having to adapt the order of your words to how the AI thinks. To take just one simple example, a Cerence-equipped car will know to turn up the heat when a driver says “I’m cold.”
No need for a long-winded “Please turn up the heat by 1.5 degrees.”
Cerence’s voice tech also creates a smooth, human-like voice without the jarring shifts in tone that some voice assistants have that could distract a driver.
Even better, Cerence’s AI can distinguish speakers based on which seat they’re in, something voice assistants designed for phones, not cars, have trouble with.
On top of that, Cerence is moving its AI tech outside the vehicle.
Earlier this year, the firm signed a deal with Xevo, which makes the in-car entertainment center hardware and software for Toyota, Hyundai, several Chrysler and General Motors brands, and many more.
Chances are that if your car has a touchscreen entertainment center, you can thank Xevo.
Under the deal, Xevo will open up its platform to Cerence’s AI payment system and offer it on the Xevo app store, where car and truck owners can download more functions for their vehicles. This AI payment system lets drivers store their payment information in the cloud.
Then, using a simple phrase like, “Give me directions to work, but stop by a Starbucks on the way and order me a cappuccino to go,” drivers will be able to order and pay for things in advance.
Right from their car.
And this system will offer more than the ability to order $6 coffee in advance.
From your car, you will be able to pay for food, parking, and gas. It will also have the security to identify who is making the order based on just their voice and accept or deny the charge accordingly.
Now, let’s be clear. Cerence is not a pure-play on contactless, in-vehicle payment, which is a good thing.
It’s a backend play to avoid the risk of a pure-play investment should the company be moving much faster than its new sector.
Because the thing is folks, we are very far ahead of the curve on this.
For instance, the concept of mobile commerce actually dates to a presentation given at a London conference long before the release of the first true smartphone.
That was back on November 10, 1997. We really didn’t see the rise of mobile shopping until the early 2010s when smartphones entered the mainstream.
These days, however, consumers take mobile shopping and payments for granted, and the presentation was ahead of its time.
Right now, no one is talking about shopping by voice in cars or trucks. That will change, but we just need to be strategic.
Cerence gives us broad access to the huge market for auto tech, AI, voice control, and so on, with contactless payments clearly playing to Cerence’s strength.
The company’s financials bear that out. Cerence’s three-year average earnings growth is a whopping 99%
Not to mention that it had record-high earnings in its last quarterly report.
At that rate, they would double twice in the next 18 months, and double twice more than 18 months after that.
So even if we cut that in half to be conservative, this is still a stock with huge upside ahead.
With Cerence in your portfolio, you’re on the road to wealth that is paved by tech.
Cheers and good investing,
Michael A. Robinson