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Underwhelming Wearables and Smartphone Slowdown Raise Questions About Growth in Technology


GoPro may buck macro weakness within the consumer electronics landscape.

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I'm back on duty following a too-short vacation in Las Vegas, and there's no shortage of tech topics worth tackling.

News reports indicate that production of Apple's (NASDAQ:AAPL) iWatch has been delayed from September to November.

Let's not get ahead of ourselves here: There is no official indication that this product even exists. Remember, in 2012, there were regular reports that an Apple television set was set to go into production, and it just never happened.

There's also no pressing need to rush in to plant a flag.

Google's (NASDAQ:GOOG) Android Wear platform, which powers new smartwatches like the Samsung (OTCMKTS:SSNLF) Gear Live and LG G Watch, doesn't appear ready for prime time just yet.

There are still basic issues like battery life, public acceptance of wearables, perceived complexity, and notification management that could just as easily hobble Apple.

Advanced wearables are not going mass market, which would be fine if it weren't for the smartphone/tablet slowdown. The consumer electronics industry really needs some new growth drivers.

On Tuesday, Samsung issued very weak second-quarter guidance, driven by weak smartphone tablet shipment. This should not be a surprise to anyone. Samsung's CFO had already telegraphed lousy results [Buzz & Banter subscription required], and there have been plenty of other indicators of mobile weakness.

For example, Best Buy (NYSE:BBY) had a tough Q1 [Buzz & Banter subscription required] due to softness in mobile phones, and IDC said that tablets grew by just 3.9% in Q1 [Buzz & Banter subscription required], a huge slowdown from 2013.

So what's going to drive the electronics industry?

Numbers from Gartner and IDC indicate PC sales may be bottoming out, but that's not quite enough. Earnings season is going to be very interesting, particularly for the semiconductor makers tied to mobile, like Qualcomm (NASDAQ:QCOM) and Skyworks (NASDAQ:SWKS).

For now, I'm sticking with just two tech names -- Apple and Nintendo (OTCMKTS:NTDOY), the latter of which is benefiting from renewed optimism in the Wii U console.

GoPro (NASDAQ:GPRO) is a very interesting story and I'm doing more reserach that I'll report in the coming weeks. Contrary to popular belief, it faces very little competition -- its real risk is market saturation.

Twitter: @MichaelComeau

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Position in AAPL,NTDOY
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