While 4G LTE may still be in its infancy, with 3G still a bigger player with a lot of mobile providers and mobile devices, the latest projections from Strategy Analytics shows 4G LTE device sales tripling from this year to exceed a quarter-billion in 2013. The age of 4G is coming.
The shift to 4G — specifically LTE, and not WiMax — is significant for smartphone makers, who will have to use specific hardware to connect to the networks. Samsung (SSNLF) and Apple (NASDAQ:AAPL) are prepared for the growth of 4G, and other manufacturers like Nokia (NYSE:NOK) and RIM (NASDAQ:RIMM) haven’t failed to predict the move to 4G. There is also speculation that Amazon (NASDAQ:AMZN) and Firefox might try to get a bite of the pie during the transition by making their own smartphone devices — though it is truly just speculation in Amazon’s case.
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CHEAT SHEET Analysis: Will the trend toward 4G help device manufacturers?
One of the core components of our CHEAT SHEET Investing Framework explains that companies riding macro trends tend to outperform those that don’t. Think of the investing proverb, “A rising tide raises all boats.”
As the trend seems to be leading to 4G, it stands to reason that any smartphone manufacturers not getting on board will get left behind on the slower 3G network, and slower is not a selling point in the smartphone market. Rewards may be limited for manufacturers developing 4G devices, as 3G is still real competition, but there will still be rewards.
One of those rewards, for those manufacturers getting an earlier start in Europe, could be getting a head start on Apple. Current iPhone 5 devices can’t connect with many of the 4G signals across Europe, which could give less popular devices like the Lumia 920 a chance to snag consumers who want speed.
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