“The rapid ramp of the mobile Internet, in short, will be a boon for consumers and some nimble incumbents and attackers, while other companies will simply wonder what just happened.”
Morgan Stanley has made available a massive research project that looks at the rise of the mobile internet, contextualizing the research with the thesis that:
“These epic technology transformations happen every 10-15 years, and they are exciting. After the evolution of the PC and the desktop Internet, we are now in the early innings of the development of the mobile Internet. These tech transformations follow similar patterns:
Entrepreneurs search for better ways to do stuff / break down old systems; Moore’s Law works on technology components with better, faster, and cheaper chips, and new hardware follows; A single galvanizing event—like Microsoft’s Windows 3.0 launch in 1990, Netscape’s IPO in 1995, or Apple’s iPhone debut in 2007—jolts the industry forward and captures the hearts and minds of consumers; Software developers rise to the occasion, build products that solve old problems and create new businesses; and Money is made, money is lost; some “sure things” become relics, and some “crazy” start-up founders become the great philanthropists of the next decade.
I found it instructive to read through and contemplate these ideas from an ebook perspective especially with the recent kobo news. Below are the 8 themes that emerge from the research and below those is the link to the report. Not bad reading over the holidays if you don’t wnat to be one of those companies that simply wonder what just happened?
- Wealth Creation / Destruction Is Material in New Computing Cycles—History shows that massive technology changes typically shift dynamics between incumbents / attackers, creating winners / losers. A handful of incumbents (like Apple, Google, Amazon.com, and Skype) appear especially well positioned for the mobile Internet, the fifth new cycle of the last half century.
- Mobile Ramping Faster than Desktop Internet Did and Will Be Bigger Than Most Think—As five key trends converge (3G, social networking, video, VOIP, and awesome mobile devices), the explosive Apple iPhone / iTouch ramp shows why usage of mobile devices on IPbased networks should surprise to the upside for years to come. As 3G adoption hits inflection points in many markets, consumers are flocking to a broad range of IPbased usage models over powerful mobile Internetenabled devices. We predict that smartphones will outship the global notebook + netbook market in 2010E and out-ship the global PC market (notebook + netbook + desktop) by 2012E.
- Apple Leading in Mobile Innovation + Impact, for Now—Depth of App Ecosystems, User Experience, and Pricing Will Likely Determine Long-Term Winners—Near term, Apple is driving the platform change to mobile computing and leading in user experience. Its mobile ecosystem (iPhone + iTouch + iTunes + accessories + services) market share and impact should surprise on the upside for at least the next 1-2 years. Longer term, Google Android’s open operating system (combined with clever device manufacturers), emerging markets competition, and carrier limitations may pose challenges to Apple’s market share upside. RIM may maintain the enterprise lead, thanks to its installed base, but the longterm outlook is challenging.
- Game-Changing Communications / Commerce Platforms (Social Networking + Mobile) Emerging Very Rapidly—Improvements in social networking and mobile computing platforms (led by Facebook + Apple ecosystems) are fundamentally changing how people communicate with each other and how developers, advertisers, and vendors can reach consumers. Mobile devices are evolving as remote controls for continually expanding types of real-time, cloud-based services—including emerging location-based services—creating opportunities and dislocations, empowering consumers in unprecedented and transformative ways.
- Japan Mobile and the Desktop Internet: Roadmaps for Growth and Monetization—Mobile Internet development in Japan and desktop Internet business models provide significant runways for monetizing the mobile Internet through online commerce, paid services, and advertising; data access likely will continue to lose relative revenue share in the mobile Internet ecosystem.
- Massive Data Growth Driving Carrier / Equipment Transitions—Global mobile IP traffic is likely to grow 66x by 2013E (with 130% CAGR), per Cisco. Increasing 3G / smartphone penetration and emerging usage models (such as video / audio streaming) will stress carrier wireless networks. Carriers may be able to address the surge via capacity upgrades and offloading to Wi-Fi. Tiered data pricing (speed, quantity) will likely be critical to long-term revenue growth.
- Compelling Opportunities in Emerging Markets—Emerging markets have enormous potential for mobile Internet user growth, owing to low fixed-line telephone / broadband penetration + already vibrant mobile valueadded services. We expect 3G inflection points to be 2-3 years away, depending on the individual markets.
- Regulators Can Help Advance Mobile Internet Evolution…Or Slow It—Inherent conflicts between the wants / needs of consumers and those of incumbent TMT providers are creating challenges for regulators.
