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

Google Inc (NASDAQ:GOOG) is leading from the forefront in m-payments. Android handsets are equipped with NFC (near field communication) capabilities needed for this new form of mobile commerce. Google’s Wallet program and Apple’s Passbook payment software have no alternatives for operating such financial transactions on mobile.

PayPal is another prominent player in m-payments. PayPal accounts for about 40% of eBay Inc (NASDAQ:EBAY)’s total revenues. With PayPal still having a limited international presence, there is tremendous scope for further expansion.

Hardware Sales

Apple leads this space with record sales of its two premium devices, the iPhone and iPad. The tablet market grew 75.3% year over year in Q4 2012, up from 29.9 million units in Q4 2011, also increasing 74.3% from the previous quarter’s 30.1 million units. Apple’s iPad continued to lead the market, shipping 22.9 million units during the holiday season.

A strong iPad Mini launch, as well as the release of the fourth-generation iPad, contributed to Apple taking home 48.1% of shipment growth over the same period in the year prior. Google Inc (NASDAQ:GOOG)’s Nexus, Amazon’s Kindle Fire, and Microsoft Corporation (NASDAQ:MSFT)’s Surface will also have a significant market share in the growing tablets market.

App Sales and OS Licensing

Google and Apple make money from their mobile platforms when people buy apps from their app stores. A new report has compared both app stores to see which one raked in more revenue in 2012.

Google Play Store’s combined daily revenue has grown by 43%, according to the report. Apple’s App Store, in contrast, only grew by 21%. In terms of growth over the entire year, Apple’s App Store has seen an increase of 51% in the 20 nations analyzed in the report. The App Store generated $15 million in average daily revenue in November 2012, just after the launch of iPhone 5 and iPad Mini, while the Google Play Store only reached $3.5 million.

Microsoft’s model is different — with its Windows Phone, the company earns a license fee everytime the operating system is sold. Furthermore, due to patents, it earns money even from Android handsets.

The Bottom Line

An ideal portfolio can be built by investing in the stocks that will cover maximum revenue. I think an ideal portfolio can be like this: Google: 30%, Apple: 25%, Microsoft: 20%, Amazon: 15%, eBay: 10%

The article How to Invest in the Mobile Data Revolution originally appeared on Fool.com and is written by Anindya Batabyal.

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