David Sterman

Roughly a decade ago, consumers finally realized they were truly addicted to the Internet. 

If you spent a few days offline, without checking e-mail or favorite websites, then withdrawal symptoms began to occur. More recently, we've become dependent on a new fix: "WiFi." As we roam towns and cities, or simply like to surf the Web from the comfort of our own bed, a wireless Internet connection has become a necessity -- especially when our employers want us to remain in constant contact.

Trouble is, we've all had experiences with unstable WiFi connections. It's no fun to watch an online video, only to see it continually pause as the data buffer rebuilds. Considering how many consumers are "cutting the cord" from cable companies to watch their favorite shows and movies online, slow WiFi connections just won't cut it.

Thankfully, help is on the way. A wide range of technology companies are finalizing the standards to deliver what's known as WiFi 802.11ac. You don't need to know what those numbers and letters mean. You only need to know that it's fast -- really fast. 

Right now, you're probably using a WiFi standard known as 802.11n. This technology is capable of transmitting data at around 150 megabits per second (or up to 450 mbps if the router has three antennas). 802.11ac is three times faster, meaning it can transmit up to 1.3 gigabytes per second (if three antennas are used). Even with just one antenna, the 450 mbps speed is fast enough to deliver multiple streams of high-definition video without delays. Simply put, it will be impossible to discern a difference between an Internet connection that is plugged directly into a cable modem and one connected to WiFi.

Not only is this technology faster, it can carry a signal over farther distances, and the chips used to transmit data consume less power than previous iterations of WiFi. 

Although consumers will begin to adopt this new version of WiFi during the coming 12-18 months, investors will begin handicapping the best ways to play this trend right away. That's because the companies that make the chips, routers, software and other gear are starting to see orders flow in. By the time we hit the fourth-quarter earnings season in late January, expect to hear a lot more about WiFi 802.11ac rollouts and their effect on 2013 and 2014 growth rates. 


David Sterman

David Sterman has worked as an investment analyst for nearly two decades. He is currently an analyst for StreetAuthority.com