Morgan Stanley: Mobile web to overtake desktop in five years

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The mobile web is experiencing faster growth than its desktop predecessor ever did according to a new study by investment firm Morgan Stanley, which forecasts more consumers will access the Internet by mobile devices than PCs within five years. Morgan Stanley's 424-page Mobile Internet Report contends the mobile web cycle is just beginning, with material wealth creation and destruction expected to surpass previous computing cycles, galvanized by the growth and convergence of 3G adoption, social networking, video content, VoIP and advanced hardware (including but not limited to smartphones, tablets, ereaders and wireless home appliances). Another significant catalyst: Opportunities in emerging markets.

"It's notable that, after years in the backwaters of global mobile development, American companies (led by the likes of Apple, Facebook, Amazon.com and Google) are becoming mobile Internet innovation pacesetters," the Morgan Stanley report notes, adding that while Apple currently leads in mobile innovation and impact, long-term winners will be determined by the depth of individual application ecosystems, the user experience and pricing.

"We believe Facebook has the potential to serve as a communications platform/engine of one-to-one, one-to-some and one-to-many (and visa versa) for the mobile Internet," Morgan Stanley says. "Facebook has already become a primary way for millions of people to stay connected and Facebook's lead is likely to be extended as more consumers use increasingly powerful mobile devices (with photo/video + high-speed access) and the communications options on Facebook (like voice/video chat and other services) continue to rise. Additional platform companies that appear to be well positioned for the rapid changes related to the evolution of the mobile Internet include Tencent and Skype--companies that appear to be at the most risk from rapid changes related to the evolution of the mobile Internet include Microsoft, Nintendo and Sony."

Morgan Stanley also anticipates a number of "traditional" Internet companies will successfully capitalize on the mobile web opportunity thanks to their aggressive focus on the platform. Among the expected winners: Google in search, ad serving and video, Amazon.com and Rakuten in commerce, Mixi in mobile social networking and Adobe in mobile content creation/delivery. "In addition, a number of private mobile companies are emerging--including the likes of game producers Zynga and Playfish (acquired by Electronic Arts in 11/09) and mobile ad player AdMob (acquired by Google in 11/09)."

For more on the Morgan Stanley forecast:
- read the report

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