Morgan Stanley predicts that within five years more users will access the Internet using mobile devices than via desktop PCs. The change is part of a new tech cycle, encouraged, in part, by Apple, Facebook, Google and Amazon.com, as well as devices such as Apple's expected tablet PC.
Within five years, more people will be connecting to the Internet via mobile
devices than via desktop PCs. This good news for carriers, handset makers and software
developers comes from Morgan Stanley's "The Mobile Internet Report,"
released Dec. 15.
Other key points in the 424-page report-available
free-are that the "mobile Internet cycle," which the Morgan
Stanley analyst team, led by Mary Meeker, dubs the fifth computing cycle in 50
years, is just getting started, and offers no promises to winners of past
cycles. "New winners emerge, some incumbents survive-or thrive-while many
past winners falter," stated the report.
Social networking, 3G network adoption, video, VOIP (voice over IP) and
"impressive mobile devices" are named as the five IP-based products
and services providing the underpinnings for the team's high expectations for
mobile Internet usage.
The report also singles out Apple and Facebook for creating platforms that
have changed how people connect and communicate online, as well as Japan's
more than 10 years' worth of mobile Internet experience, which offers the rest
of the world road maps for ramping up and monetizing growth. Speaking of the
rest of the world, emerging markets may also be potential sources of serious
mobile Internet user growth.
This fifth cycle, the report's writers pointed out, is behaving differently
than past ones: It's ramping up faster, it's bigger, it's global and, after a
decade of the United States
showing little prowess on the tech front, U.S.
tech companies-such as Apple, Google and Amazon.com-are among the cycle's
Additionally, young but experienced industry players are expected to be key
operators. "They are engaged ... and they each have something to
prove," stated the report. "This includes both experienced leaders
like Steve Jobs and next-generation new kids on the block like Facebook's Mark
As for those "impressive devices," the report includes Apple among
those contributing to the "epic technology transformations" that
occur every 10 to 15 years, spurring a new cycle.
"Many (of the tech-savvy sort) have Apple's
forthcoming Tablet product on their 'must buy' lists, despite the fact that
they don't know the features, the price or the launch date. They just know they
love Apple products, and with Steve Jobs all over it, they believe it will be a
transformative product they simply must have," stated the report. It
"And we think the odds are that
they are right-sometime in 2010, Apple
likely will launch another record-setting, transformative wireless device. Make
no mistake, Apple (and others) are not just trying to upset the cell phone
market. They are aiming to transform how communications works, how
entertainment and news are distributed, how goods and services are purchased ...
and how we control all this stuff from the ever-expanding, rechargeable remote
controls we carry in our hands."
As Apple iPhones and similar devices encourage 3G adoption and growing
consumer use of a range of IP-based usage models over various mobile devices,
Morgan Stanley expects smartphone sales to surpass the global notebook and
netbook market in 2010, and to surpass the
global, overall PC market in 2012.
While Apple is poised to be a short-term winner in the new
cycle, the report added, "[In the] 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 [Research In Motion] may maintain the enterprise lead, thanks to
its installed base, but the long-term outlook is challenging."
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.