Dear Reader,
Taiwan’s Foxconn, also known as Hon Hai Precision Industries, halted almost all its production in mainland China due to the coronavirus. Foxconn is the world’s largest contract manufacturer and is the company that manufactures Apple’s iPhones.
If the company needs to keep its Chinese factories closed for a second week (into next week), there are going to be major disruptions to not only Apple but hundreds of other consumer electronics companies. Foxconn is already trading down more than 11% since its January highs, and another week of closures will weigh heavily on the company.
The World Health Organization reports that there are now more than 20,000 confirmed cases, more than 3,000 new in the last 24 hours. There have already been 425 deaths. And there are currently 2,788 severe cases… a number that grew by 492 in the last day. Less than 1% of the cases are outside of mainland China.
Somewhat incredibly, Apple’s share price is up nearly 4% compared to yesterday despite the clearly material news. How’s that for a strong market?
Either way, my team and I are watching these developments like a hawk given the potential impact on the technology sector.
Now for our insights…
When people think of Apple these days, they typically picture an iPhone. But Apple has quietly become a powerhouse of “wearable” consumer electronics. These are smart electronic devices worn on the body, which often pair with smartphones.
As proof, Apple has sold over 50 million units of its Apple Watch since 2015. And Apple sold almost 60 million pairs of AirPods last year alone. These two wearables segments have been a smashing hit for the company.
And I’ve just uncovered Apple’s next wearable technology…
A new patent from Apple has just been published. It shows what is essentially a new user interface for computing devices. These small sensors are worn on the fingers to control a device through motion. The patent is titled “Computer Systems with Finger Devices.”
What’s unique is that this isn’t a glove. The patent describes small thimble-like sensors that slip over the finger. These sensors provide haptic feedback to users – which means they vibrate under certain conditions. Here’s a visual from the patent filing:
Apple’s Finger Device
Source: U.S. Patent and Trademark Office
I believe this is all about creating a new interface for augmented reality (AR) glasses. That’s where this is going.
As a reminder, these are glasses that overlay graphical images on your field of vision. We’ve talked about this quite a bit before. And last fall, I tested out the leading consumer-grade AR glasses. Here I am trying out the Magic Leap’s ML1 at an AT&T store in Manhattan.
Jeff Wearing AR Glasses
AR eyewear will be the next consumer electronics frenzy. We are going to see these things everywhere.
So where do Apple’s finger sensors fit in?
Right now, voice commands are the most logical way to control an AR headset. After all, who wants to have to fiddle with tiny buttons on the temple of their AR glasses?
But if we think about using these devices out in public – say, on our daily commute – voice commands are not ideal either. It will get chaotic very quickly if scores of people are shouting voice commands to their glasses over each other.
That’s where a new, “noise-free” tactile interface makes perfect sense to me. And Apple’s finger sensors provide just the right solution.
Thanks in part to its wearables’ success, Apple is now a $1.2 trillion company… and still growing. The company is set to release its first-ever 5G-enabled iPhone this fall. And we can expect to see Apple come out with its own AR eyewear, possibly complete with these finger sensors, within the next 12 to 24 months as well. There is no better-positioned company to bring these two technologies together.
That doesn’t mean that Apple will be successful in doing so… But I would not be surprised if Apple becomes a $2 trillion company by 2022 on the back of these two technologies.
And by the way, if investors are looking for exposure to Apple’s new suite of products, there’s a better way than buying Apple stock.
I’ve been preparing my readers for this new consumer electronics boom by recommending key Apple suppliers. One of them is my No. 1 5G stock of 2020. Get all the information here.
A San Francisco-based biotechnology company called Mammoth Biosciences just raised $45 million in its Series B venture capital funding round. Mammoth is one of the next-generation CRISPR genetic editing companies I have been tracking closely.
As a reminder, CRISPR genetic editing technology is like software programming for DNA. It started as a tool to “edit” genetic mutations and replace them with healthy DNA. And as we have covered in these pages, new applications for CRISPR technology seem to pop up every other week now.
Well, Mammoth Biosciences is using CRISPR for molecular diagnostics. In other words, it is using CRISPR to test for genetic diseases.
Mammoth is also developing different enzymes to be used with the CRISPR platform. This could lead to even more use cases.
Up to this point, most CRISPR applications have utilized the “Cas9” enzyme. This enzyme is great for the “cut and paste” function. But new enzymes could add more functions to the arsenal.
And Mammoth has assembled a star-studded cast of advisers and investors. That’s something we always want to see.
Mammoth Biosciences was cofounded by Jennifer Doudna, who was one of the first people to apply for a CRISPR patent back in 2012. Also among Mammoth’s leadership team is Peter Nell, the cofounder of Casebia Therapeutics. Casebia is a joint venture between pharmaceutical giant Bayer and CRISPR Therapeutics (CRSP).
CRISPR Therapeutics was one of the very first CRISPR companies to go public. We invested in the company in my small-cap Exponential Tech Investor service way back in 2016. And we booked profits of 332% on the stock just last December, more than quadrupling our money.
That’s the power of investing in small-capitalization, high-growth, bleeding-edge tech companies.
As for advisors, Mammoth benefits from the expertise of a former board member of genetic sequencing giant Illumina… the former CEO of cancer screening company Grail… and the dean of the Stanford University School of Medicine.
It’s a powerhouse advisory board.
Also of note, Apple CEO Tim Cook invested in Mammoth’s $23 million Series A funding round back in 2018. This is interesting. Cook doesn’t back many early stage biotech companies. He must have seen something special about Mammoth Biosciences.
And that speaks to Mammoth’s fund-raising success. The company was founded in 2017, and it has already raised $68 million. That’s a big number for such a young company. And with this war chest, Mammoth Biosciences has enough cash to take the company public within the next 12–18 months.
So this is a prime company to add to our watchlist. I’ll keep you posted on any future developments with Mammoth Biosciences.
Last month, we talked about how hydrogen-powered cars may be the future. In that issue, we talked about researchers using inexpensive magnets as a solution to make hydrogen production economical.
Today, we have to talk about new research that shows how hydrogen could be produced from sunlight.
This research comes from Ohio State University. There, researchers developed a process that uses a rhodium molecule as a catalyst to store electrons from sunlight. And they discovered that shining LED light onto this molecule puts it into an excited state, causing it to also absorb a photon. The photon, combined with two electrons, makes hydrogen.
This sounds technical, I know, but here’s the important part: this discovery could lead to a cost-effective method for producing hydrogen on a large scale. And if we can produce hydrogen cheaply, hydrogen fuel cells would be ideal for powering electric vehicles (EVs).
And as we discussed last month, hydrogen fuel cells would be cleaner, safer, and cheaper than the lithium-ion batteries that power most EVs today. Hydrogen fuel cells also have a much better energy density than lithium-ion batteries. That means that consumers can drive for much longer distances on hydrogen fuel cells and filling up doesn’t take 30 minutes… It’s just like filling up our tanks with gasoline.
The only problem with this new method is that rhodium is a rare metal. Because of that, it is expensive to use as a catalyst. For this research to become viable at scale, researchers would need to find a more common molecule that works the same way.
Still, this is an exciting development to watch. And now we are seeing multiple paths that could lead to the economic production of hydrogen. Sooner or later some team will crack the code. That being the case, I’m confident we’ll be able to purchase a hydrogen-powered car in our lifetimes.
Regards,
Jeff Brown
Editor, The Bleeding Edge
P.S. And I wanted to remind readers that E.B. Tucker – a colleague of mine – is hosting an investing webinar tomorrow evening at 8 p.m. ET. You see, E.B. has recently been sharing an investing strategy outside of everyday stocks, bonds, or options. He calls them “Omega shares.” And his readers are already sitting on a gain of over 800% with just one of these investments.
If readers would like to get the full story, you can see for yourself here.
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
