Whither Telcom, TV and the Internet? 3 Aspects of the Same Thing?

One thing we can count on, even when economists are talking about a W-shaped recession, is that there will continue to be technology advances that wow everyone, and our communication lives will continue to evolve at warp speed.  The fact that there were so many people lined up to buy iPhones last week that AT&T had to scream and run is just a symptom of the power of the nexus between video, telcom and internet, which are fast becoming just different aspects of one triune thingamabob.

Apple had to call a halt to iPhone 4g sales at 1.7 million in the first 3 days, according to The Observer: http://www.observer247.com/2010524/short-supply-halts-apple-iphone-4g-sales-at-17-million/.  Well, you know you’re doing ok when a major failure is the inability of your supply line to keep up with the demand that is growing like a nuclear-contaminated varmint in an old movie.

The latest "gotta-have" -- iPhone 4. Ain't it sweet?

But seriously, folks

All the pundits could be wrong, and it could still be possible to hit a 4-bagger or better on AAPL shares, but we’re kinda doubting it.  Most often the place to hit long balls is the small-cap world, and while we don’t EVER recommend investments, we have a few ideas of companies to look at if you want to know which direction things are heading.

First of all, have a look at Iolo Jones’s latest: VidiActive (http://www.vidiactive.com).  Jones has been shuffling ideas for a long while and although he has not hit the bull’s eye so far, he’s always in the right place about a nanosecond too early.  And like a lot of technologists, the people at VidiActive tell you about their ideas and widgets in breathless Newspeak, stringing together words that don’t seem to match each other.  But odds are that your kids will understand why it is not just cool but necessary that they be able to send video programming from their handhelds to their televisions and make appointments for their friends to watch the same videos at the same time in different places, creating Virtual Private Television networks on an ad-hoc basis.  VidiActive is privately held, but you can make book on these ideas showing up in Best Buy pretty soon.

Where might you look in the world of small companies to see something that is a peek into the future of technology?

Start with Oslo-based Opera Software obviously.  The Opera Mini browser has hitched its wagon to a star, and is the only non-Apple browser canonized by AAPL to be used on the iPhone.  Aw c’mon it’s a global economy, you can look at Oslo stocks!  Whether you look at the stock or not, someone right near you right now is downloading an Opera browser; there are hundreds of millions of users all over the world.  Opera Software trades as OPERA.OL in Oslo, and also trades in London and Frankfurt; it also has a listing on the OTCQX market in the US: OPESY.PK.  Have a look at http://www.opera.com for a slick and easy-to-understand tour of Opera software.  Shares closed in Oslo today at about 23.50 NOK, which is — wait wait don’t tell me — about US$3.65.  If you bid for the OPESY shares, there are two shares in each OPESY, so the equivalent would be US$7.30.  Tiger by the tail.

NewTeeVee’s Ryan Lawler wrote up Polaris Venture Partners-funded JibJab this week, saying that they have processed 1,000,000 transactions over the last year. http://newteevee.com/2010/06/28/jibjab-doing-a-million-transactions-a-year/ JibJab’s website looks a little like a skeeball prize shop on a summer boardwalk, but it is humming, virtually spinning like the Droid thing in the Motorola ads.  Again, it’s not public YET, but it looks like one of those companies that could be the Next Big Thing.  Their principal services seem to be personalized videos under the “Starring You” label, and unlimited e-cards on an annual subscription, and since the founders seemingly believe that advertising doesn’t work for online video, you can expect to be untroubled by ads, but there will be some cash on the drum each time you download something.

And now the first television commercial has been shot using an iPhone 4: http://newteevee.com/2010/06/30/iphone-4-camera-used-to-shoot-tv-commercial/

It’s worth keeping an eye on the last generation of IPTV companies, including Prague (Czech Republic) and NY-based KIT Digital (Nasdaq: KITD; http://www.kitd.com/), which enables virtually anyone to create an ad-hoc network to distribute video or other material over the internet, whether wireless or with a set-top box, etc.  KITD has not exactly set the world on fire, but it’s rewarding its longterm holders with profits even after a bounce earlier in the year, shares selling for $9.09 vs a year-high of $15.19.  KITD is growing like a classic roll-up, but not buying a bunch of small mom-and-pop operations — buying various pieces of geographic and technology maps.  It may not be the biggest IPTV company of all, but it will not be left out in the cold, and it has shown the ability to raise equity when necessary, which ain’t all bad either.

Many are expecting a big growth spike in triple-play and quad-play packages over the next few years, following a study published June 30 of the Dutch telecom sector by Pyramid Research (http://www.pyr.com) : http://iptv.tmcnet.com/news/2010/06/30/4878728.htm

And lest you think IPTV is not a broad phenomenon, look at Clarksdale MS: http://markets.chron.com/chron/?GUID=13632304&Page=MediaViewer&ChannelID=3197.  Big Star Media Group (Pink Sheets: BMGI; http://www.bigstarmediagroup.com/) is looking for the next Elvis Presley (not the ghost of the late one), and is establishing its own IPTV network: Clarksdale TV, featuring “proprietary Blue-related music news and entertainment programming.”  If you want to tune in, have a look at the Big Star website.  BMGI  shares trade for less than a third of penny, by the way, and in no great quantity either — which may mean it’s a bargain, but certainly means that Big Star has not been discovered by Hollywood yet.

And just for fun, have a look at PhoebeWorks entertaining smiley comedies: http://www.phoebetv.com — the lastest and greatest is “Handsome Town,” guaranteed to make you laugh (or at least smile, dammit).

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