When I first arrived in Singapore in 1997, I came across a new technology. It was neither the PC nor the cell phone (known in Singapore as the handphone). It was the pager.
Most readers under 50 would not remember that device. In those days, cell phones were so expensive that pagers were much more popular.
Handphones were priced at $600 in 1997, which is about $1,200 today. Subscriptions were about twice as expensive as today. Pagers only cost $30.
Handphones were not digital, which meant that they could not be used for texting. Pagers were small enough to fit into a pocket and were similar in appearance to cigarette lighters.
You could get a hold of an estate agent by paging them from a landline. The agent would then call back and announce: “Did somebody page?” You could then speak to them.
Singapore was the paging capital of the world in 1997 and paging penetration was the highest in the world. Paging operators were high-flying tech stocks in the US.
See also: The future of neurotechnology: merging minds and machines
Pagers have been around in America since the 1980s. They were initially used by doctors and security personnel, so you could summon them during an emergency.
Pagers were a hot property not just for its users. Investors were running after the shares of the paging companies. The networks were easy to set up and usage was rising quickly.
The hottest paging stock was PageNet, founded in 1981 in Dallas, Texas. By the late 1990s, the company had 10 million subscribers. Its revenue was US$1 billion at that time and the market expected it to double by 2000.
See also: GIC co-leads Databricks' US$10 bil Series J investment round
The stock market was going berserk about the stock. It had a valuation of 55 times projected earnings, which was twice the average for telcos at the time.
The company spent US$1 billion to buy more spectrum. They wanted to offer voice paging and two-way paging. A foray into China and India was on its agenda.
The founders were cashing in on the stock options. The earth was falling under their feet while the champagne was still flowing.
By 2000, cell phone operators figured out how to introduce text messaging and data mobile email. A new device called the Blackberry took centre stage. There were also others like Nokia who could provide a similar service.
PageNet’s customers flocked to cellphone operators. The debts from the heavy investment were unsustainable. The company filed for bankruptcy. By 2005, paging was obsolete.
The eventual collapse of these companies seems clear in hindsight. They operated on the backbone of cellular networks. Pagers were a bit like the black-and-white TV sets of the 1970s. They only existed as a cheaper alternative to a much sexier technology.
PageNet’s fall from grace could be a lesson today. Some technologies may be a rage today but could disappear soon. Standalone cameras could be useless because of the quality of iPhone photography. Over 40% of Canon’s revenue comes from cameras and imaging. Its stock is up 38% this year because of its exposure to semiconductors.
Sink your teeth into in-depth insights from our contributors, and dive into financial and economic trends
Printers are also sitting ducks. The world is going paperless. I recently had a hard time buying a printer cartridge because hardly anyone stocks them. Hewlett Packard Inc is one of the principal producers of printers.
At 10 times P/E, it may seem cheap for a tech hardware stock. However, the death knell of its main product seems imminent.
Some readers are probably reading this piece on a computer monitor. It is unlikely that monitors will be widely used in 2030. The problem with monitors is that they take up a lot of space. I have two of them, but some of my trading colleagues have five.
There is an efficient solution that does not take up space — the head-mounted display (HMD). Early examples of these products are VR monitors. Your frame of reference is unlimited and unrestricted. HMDs can be mounted on a face and look like large swimming goggles.
Many people use the world’s top monitor producer, but few consumers have heard of it. The Taiwanese TPV Technology is richly priced at 54 times P/E and has a market cap of US$15 billion ($20.3 billion).
Investors need to keep their eyes on the monitor. It may not be around for long.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era
