The research unit of US Investment Bank Morgan Stanley today released a triple threat evaluation of the mobile internet industry, including a 422-page report, 692-page presentation, and a 92-page “summary” of the aforementioned. There’s just something about speculative research from financial institutions that seems so rational, pure, and free of the enthusiastic support that those in the industry like to give each other. The report starts by stating that we are in the early part of the fifth major technology cycle of the last fifty years, and that as each new cycle unfolds, “the number of devices and users rises by a factor of ten.” It continues by stating, “the winners in each new innovation cycle create more market capitalization than the winners of the last cycle.”
Given that positive outlook, lets take a look at how the rest of the report breaks down, and what it could mean for mobile internet entrepreneurs in Northern Europe.
The report is divided into the following eight “themes”:
- Wealth creation / destruction in new computing cycles
- Mobile ramping up faster than desktop did, and will be bigger
- Apple is leading in mobile innovation
- Game changing communications / commerce platforms emerging rapidly
- Growth / monetization roadmaps from Japan
- Massive data growth driving carrier / equipment transitions
- Compelling opportunities in emerging markets
- Regulators can advance / slow mobile internet evolution
A Twitterable summary of each of the themes:
- Drive innovation and gain scale: Google, Amazon, & Skype probably will keep dominating. Nokia & Sony-Ericsson are “potentially challenged.”
- Smartphones will outship the global notebook + netbook market in 2010 and the global PC market (desktop + notebook + netbook) in 2012
- Apple is driving the platform change to mobile. It’s mobile ecosystem should surprise on upside for the next 2 years. Long term Google android will limit Apple’s market share
- Mobile devices are remote controls for real-time cloud based services. Facebook is the largest gainer of online usage over last 3 years. Chinese company Tencent has earned >$35 billion from virtual goods
- Japan is 5-10 years ahead in mobile internet. Revenue mix between data/commerce/paid services/advertising for the rest of world (ROW) in 2008 was same as Japan in 2000. Carriers have most to lose.
- Mobile IP traffic likely to grow 66x by 2013 (with 130% CAGR), this will stress carrier networks and force them to compete on strength of networks + availability of Wi-Fi. Tiered data pricing (speed, quantity) will be key in replacing voice revenue lost to VoIP.
- Only 260 million of 4 billion mobile subscribers are on 3G in 2009. The 20-25% inflection point for 3G penetration in emerging markets will depend on falling equipment prices. Asia and Africa is better positioned than Eastern Europe & Middle East due to subscriber growth.
- Regulatory environment is favorable in general. Net neutrality legislation in US will benefit services and content at cost to ISPs. International roaming price ceilings should benefit mobile internet usage in Europe. Zoning laws and high 3G license prices in some markets may impede rollout.
There it is, our best shot at summarizing a monster data dump. It you want to know more, you should read it yourself.