How to Invest in the Mobile Data Revolution: Google Inc (GOOG) and More

Page 1 of 2

Worldwide mobile data traffic will increase 13-fold over the next four years, reaching 11.2 exabytes per month (an exabyte equals one quintillion bytes) for an annual run rate of 134 exabytes by 2017, according to Cisco Systems, Inc. (NASDAQ:CSCO)’sVisual Networking Index Global Mobile Data Traffic Forecast for 2012 to 2017, published on Feb. 5, 2013. The forecast’s annual run rate of 134 exabytes of mobile data traffic is equivalent to:

1). 134 times all the Internet Protocol traffic (fixed and mobile) generated in the year 2000, or

2). 30 trillion images (e.g., via MMS or Instagram) — 10 images daily from each person on earth for one year, or

3). 3 trillion video clips (e.g., YouTube) — one video clip daily from each person on earth over one year.

Figure: Cisco Forecasts 11.2 Exabytes per Month of Mobile Data Traffic by 2017

Google Inc (NASDAQ:GOOG)Smartphones, laptops, and tablets will drive 93% of global mobile data traffic by 2017, according to the forecast. This article will focus on the companies that would benefit immensely from this mobile data explosion. Investors are also expected to be rewarded handsomely if they’re properly positioned.

Revenues will flow mainly from five sources — (1) mobile ads including video ads, (2) mobile retail through m-commerce, (3) mobile payments, (4) selling of hardware, like smartphones and tablets, and (5) app sales and mobile OS licensing. For creating a long-term portfolio to invest in this mobile data revolution, a revenue-wise approach can be an innovative idea.

Mobile Ads including Video Ads

Mobile searches grew four times in 2011-2012. Nearly 70% of smartphone users that watch TV and use print media or the internet do a mobile search. Mobile ad spending worldwide stood at $3.3 billion in 2011 and will be sky rocketing to $20.6 billion in 2015, driven by search ads and local ads. In the U.S. over half of U.S. mobile ad spending is local. Meanwhile Asia continues to dominate global mobile ad spend.

Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) will be the two main recipients of mobile ad spending. Google Inc (NASDAQ:GOOG)’s Android and Apple’s iOS dominate the overall mobile ad market, reports mobile ad platform MoPub. By 2017, mobile video will represent 66% of global mobile data traffic (up from 51% in 2012). Google Inc (NASDAQ:GOOG)’s YouTube will be another source of generating huge video ad revenue for the company.

Mobile Commerce

Purchasing digital goods will be the largest segment ahead of physical goods. According to an eTail survey, 87% of retailers view mobile as the biggest growth area. According to ClickIQ, 48% of retail purchases are influenced by mobile, and 29% of mobile shoppers research in-store and buy online.

Amazon.com, Inc. (NASDAQ:AMZN) will be the undisputed leader in mobile commerce. U.S. mobile commerce grew over 70% year-over-year in 2012, and accounted for roughly 10% of total e-commerce sales. As of September 2012, Amazon has 62 million unique mobile visitors and as of July 2012, Amazon’s mobile reach was 47%. This was way higher than competitors.

Mobile Payments

M-payments, i.e. paying by mobile, will be over $1 trillion by 2015. The use of near-field communications (NFC), m-banking and mobile money transfer is expected to record massive growth in the coming months and years. 1 in 8 mobile subscribers will use m-ticketing in 2015 for airline, rail and bus travel, festivals, cinemas and sports events.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!