Morgan Stanley on Mobile

Fascinating report set on the Future of Mobile from Morgan Stanley (hat tip Streetwise). The report comes in 3 bits:

1) “The Mobile Internet Report Setup” – a 92-slide presentation that excerpts highlights of the key themes from the report.

2) “The Mobile Internet Report Key Themes” – a 659-slide presentation that drills down on thoughts covered in “The Mobile Internet Report.”

3) “The Mobile Internet Report” – a 424 page report which explores 8 major themes in depth and includes the two aforementioned slide presentations + related overview text.

I've read the highlights so far, and will be going through the others in the next few days. Morgan Stanley summarise their key findings as below, my comments are in italics:

Material wealth creation / destruction should surpass earlier computing cycles. The mobile Internet cycle, the 5th cycle in 50 years, is just starting. Winners in each cycle often create more market capitalization than in the last. New winners emerge, some incumbents survive – or thrive – while many past winners falter. (Standard new wave pattern described, but the greater wealth creation/destruction argument is harder to justify)

The mobile Internet is ramping faster than desktop Internet did, and we believe more users may connect to the Internet via mobile devices than desktop PCs within 5 years. (Decent devices (thanks to iPhone), lower cost of access and understood benefits make faster rampup a no brainer now - but the point made above still holds - are they as high value?)

Five IP-based products / services are growing / converging and providing the underpinnings for dramatic growth in mobile Internet usage – 3G adoption + social networking + video + VoIP + impressive mobile devices. (Social Networking is a current flavourite of the month - the killer app is always comms, insofar as Social Networks facilitate this they will succeed or fail. Twitter and the like are superb unified comms systems so play well to this)

Apple + Facebook platforms serving to raise the bar for how users connect / communicate – their respective ramps in user and developer engagement may be unprecedented.(Facebook raises the bar? I'd argue Twitter is pushing Facebook and all the others at the moment. Facebook has the users but its still very clunky on mobile)

Decade-plus Internet usage / monetization ramps for mobile Internet in Japan plus desktop Internet in developed markets provide roadmaps for global ramp and monetization. (People have tried to reproduce DoCoMo elsewhere before and failed, we've been watching it for 10 years and I can't see anything that's changed that recently. Industry structure in the West is different - see below - and does not play to a DoCoMo model, Apple ran an over the top model which is in our view the one to watch in US and Europe)

Massive mobile data growth is driving transitions for carriers and equipment providers. (Yes, but carriers still have the main power in the value chain in US and Europe - which is why DoCoMo has failed in the past. Some countries eg Scandinavians, France have moved to a more Japanese-like model of state defined market structure so may be easier to ))

Emerging markets have material potential for mobile Internet user growth. Low penetration of fixed-line telephone and already vibrant mobile value-added services mean that for many EM users and SMEs, the Internet will be mobile. (Yes, but....the mobile pipes fill up fast, and have nowhere near teh carrying capacity of fixed line backbones. But at least a service can get off the ground and the fixed line infrastructure can come later)

A fascinating report, with much to study. But, I have a standard policy with all forecats from Planet Mobile, which is to halve the early predictions - its worked well for 10 years so I see no reason not to do so here, yet