Fitbug Holdings has seen its shares sky-rocket by 591% during the past five days, after the company revealed that its products were now being stocked byUS retail chainTarget as well asJ Sainsbury thats a total of 2,093 stores. Not only is this great news for Fitbug, but its a great vote of confident for the wearable technology market.
Fitbug produces a pocket-sized, wearable device that tracks your movement, helping you to achieve fitness goals and monitor sleep patterns. The device transmits data to a smartphone and is the latest in wearable technology.
Wearable technology, combined with the Internet of Things, or IoT for short, is the tech worlds latest fad. Put simply, IoT devices communicate with each other over the internet or wireless networks, giving objects the ability to communicate with other objects. A market thatARM Holdings(LSE: ARM) (NASDAQ: ARMH.US) is trying to dominate.
Grabbing market share
ARM has been diversifying its product offering during the past few months, to try and draw in customers. The company has been giving awayfree software to manufacturers of smart devices even if they are built by rivals in an attempt to cement its position in the IoT market.
So far, this strategy is seeing some success. Indeed, the company recently reported that during the third quarter royalty payments rose 9%, compared to growth of only 2% during the second quarter. However, the companys revenue growth received a significant boost from the strong US dollar, which distorted results. Specifically, while ARM reported revenue growth of 12% in US dollar terms for the third quarter, on an underlying basis, in sterling, revenues only increased by 6%.
Nevertheless, there appears to be a strong demand for ARMs technology, with 43 new processor licenses signed by the company during the third quarter. Year to date, the company has signed 110 processor licenses.
Things should only get better for the company as it moves into the fourth quarter. ARM is set to benefit from the launch ofApplesnew iPhone and iPad. Additionally, as ARMs components are used in 95% of the worlds smartphones, the company should see a boost in demand for its products over the key Christmas shopping period. And according to some analysts, this year should be a bumper year for high-spec semiconductor producers like ARM.
This thesis is based on the fact that at present, mobile network operators are aggressively pushing the sales of 4G mobile devices. ARM has a strong hold over the 4G smartphone market because the companys semiconductors are some of the only products on the market that meet the processing demands of these devices.
So all in all, it seems as if ARM is set to profit from the surging demand for high-end smartphones, as well as the rising demandfor devices that can connect to the IoT.
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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings and owns shares in Apple. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.