Whether its Amazon.com, Apple or Google there is something all three of these businesses share which every investor needs to be aware of and every ASX company needs to be alert to – disruptive technology.
Companies like Amazon thrive on disrupting the status quo. Instead of nipping at the heels of a market leader in an attempt to seize a small share of the pie for themselves; rather they look to flip a market completely on its head, do things in a totally different way and take massive scale for themselves.
Take for example these two tech success stories and their latest innovations…
Google has recently started utilising weather balloons with wi-fi devices attached to them to float around the sky creating free wi-fi hubs. It perhaps sounds a little ridiculous but that's half the point. These disruptive companies think outside the square and in so doing they create risks that established players like Telstra Corporation Ltd (ASX: TLS) or BigAir Group Limited (ASX: BGL) have probably never even considered to be a risk.
Another example which should be worrying for competitors with significant sunk costs such as Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) through to transport providers such as Toll Holdings Limited (ASX: TOL) is Amazon.com's recent application to test the use of small unmanned aircraft (also known as drones) to deliver goods to customers from their warehouses. Given the CEO and founder of Amazon.com only disclosed his plans late last year, it's easy to see how quickly the economics of a business can change.
There's money to be made!
For investors there are two takeaways. Firstly, it's important to be aware of competitive threats as they can affect the profitability and value of your portfolio. Secondly, identifying a successful disruptive technology business can mean identifying significant growth stocks which can make you super rich – look no further than Amazon.com, Apple and Google!
