Prominent Analysts See iPhone With 'Two or Three-Year Lead' on Mobile Internet Market

MacRumors · Dec 16, 2009

Fortune reports on a newly-published research effort from Morgan Stanley which analyzes the mobile Internet industry and in the process points to the iPhone's tremendous early growth and Apple's leadership position in the industry.

Based on past performance, according to Morgan Stanley, Apple is in the "pole position" in the race to dominate mobile Internet computing, which is supposed to be for the 2000s what desktop Internet computing was for the 1990s, personal computing for the 1980s, mini computing for the 1970s, and mainframe computing for the 1960s.

According to Fortune's report, Morgan Stanley analyst Katy Huberty sees the iPhone's massive installed base and application offerings as giving Apple a "two or three-year lead" on the rest of the industry. The iPhone's rapid early growth, which has easily surpassed that of other revolutionary Internet offerings, is seen as evidence of the game-changing nature of the device and the potential for continued leadership throughout the rapidly-evolving industry.

The report also provides data backing up what many have previously observed: that iPhone users' heavy use of data in comparison to that of other smartphone users is revolutionizing the mobile Internet industry and driving innovation and growth in excess of the device's market share. According to the study, the iPhone holds only 17% global smartphone market while claiming 50% of mobile app usage and a full 65% of mobile Web browsing.

While it remains to be seen whether Apple can continue its explosive growth in the face of increasing competition in the mobile Internet space, it seems clear that Apple holds a number of advantages that offer it the opportunity to drive the industry for the foreseeable future.

Article Link: Prominent Analysts See iPhone With 'Two or Three-Year Lead' on Mobile Internet Market

*LTD* · Dec 16, 2009

This was evident from day one, but it meanss quite a bit more in the face of all this "competition."

zombitronic · Dec 16, 2009

I just can't believe that Huberty was the one to bring this up. She's usually the one looking for and trying to exploit any achilles heel that AAPL might have to bring its price down a bit. All of her clients must be in.

avigalante · Dec 16, 2009

While it may be true that this information was presented yesterday, the data/book is old news.

MS presented this at a conference in October with the same numbers.

hwhalers · Dec 16, 2009

iPhone users are the driving force in mobile browsing and apps. This isn't news.

RIM ships a lot of handsets, and will continue to have a larger installed base than Apple, but they're used mainly for messaging or in business environments where apps and browsing are restricted or very minimal. Their consumer landscape is lacking. This also isn't news.

The thing that interests me is Android eating the hell out of WinMo's lunch. If it actually takes until Q4 2010 for WM7 to go gold, the platform is completely dead. What I want to see is what will happen to the business users who ditch WinMo. Most of them will go to RIM. But of the ones who don't, there's going to be a certain percentage that won't want to be involved with Google. If Palm is still alive/independent by later 2010, they could poach a nice, if minor, user base if they build the right device and app suite.

alexk82 · Dec 16, 2009

you're right

avigalante said:
While it may be true that this information was presented yesterday, the data/book is old news.

MS presented this at a conference in October with the same numbers.

you're right this was presented sometime late summer early fall. pretty much the theme of the presentation was that 2010 will be the year of moblie.

baileyat · Dec 16, 2009

Insert iphone needs to be on verizon comment here...

-hh · Dec 16, 2009

hwhalers said:
...RIM ships a lot of handsets, and will continue to have a larger installed base than Apple, but they're used mainly for messaging or in business environments where apps and browsing are restricted or very minimal. Their consumer landscape is lacking. This also isn't news.

I've had a BB for the past couple of years. Sure, its officially "business", but web-surfing is permitted, etc. I hardly use it at all for that because the User Experience thoroughly blows. As such, let's not necessarily try to attribute it all to being a "business" device for why its internet access numbers are low.

The thing that interests me is Android eating the hell out of WinMo's lunch. If it actually takes until Q4 2010 for WM7 to go gold, the platform is completely dead. What I want to see is what will happen to the business users who ditch WinMo. Most of them will go to RIM. But of the ones who don't, there's going to be a certain percentage that won't want to be involved with Google. If Palm is still alive/independent by later 2010, they could poach a nice, if minor, user base if they build the right device and app suite.

I saw that and was ironically wondering where all the clever Media Pundits are, pronouncing a "Microsoft Mobile Death Knell", since we all know that had this been Apple, thats what would have had happened.

-hh

cjmillsnun · Dec 16, 2009

baileyat said:
Insert iphone needs to be on verizon comment here...

And you think Verizon would be any better at handling the iPhone that AT&T... Oh would you like to browse the web while talking. Sorry, can't do that on VZ.

hwhalers · Dec 16, 2009

-hh said:
As such, let's not necessarily try to attribute it all to being a "business" device for why its internet access numbers are low.

Indeed not. I think that the corporate users who are allowed to use the browser probably use it more than the individuals who own them and use them mainly for their messaging features. The members of my family with corporate BBs use the browsing features sparingly, mostly for VPN/Intranet stuff or news. My girlfriend and her mother used to have BBs (gf switched to an iPhone recently, her mom has an iPod Touch), and they didn't bother doing anything except SMS/IM on them because it was awful.

ArrowSmith · Dec 16, 2009

The Google Phone will cannibalize the Symbian and WinMobile markets first. Then if it's seen that the Google Phone is a killer app it will be poised to make inroads into iPhone customers who will be at the end of their contracts. We'll know only in 2012.

Vmaatta · Dec 16, 2009

Adoption Comparison

Comparing iPhone and i-mode adoption to AOL and Netscape from '94 is just wrong in so many ways

.

BongoBanger · Dec 16, 2009

New?

Tech Crunch had this over a month ago where it was rightly shredded for the woeful assumptions Huberty makes.

bitWrangler · Dec 16, 2009

Vmaatta said:
Comparing iPhone and i-mode adoption to AOL and Netscape from '94 is just wrong in so many ways .

This is exactly the very first thing that popped into my head when I saw that first graph. Talk about lies, damn lies and statistics. That is a completely meaningless comparison.

InfoTime · Dec 16, 2009

MacRumors said:
the iPhone holds only 17% global smartphone market while claiming 50% of mobile app usage and a full 65% of mobile Web browsing.[/url]

So maybe AT&T's network is disproportionately loaded? 65% of mobile web browsing is done on one network. That leaves 35% to be done on Verizon, Sprint and AT&T.

stokessd · Dec 16, 2009

flawed logic

This arguement assumes that the internet availability is the same between desktop and mobile platforms. The problem with this that internet access more than internet adoption is most likely the limiting factor for desktop users. Mobile platform (especially the iTouch) is riding on the coat-tails of the desktop internet adoption. And has the advantage of 10+ years of infrastructure build-out.

Sheldon

miketcool · Dec 16, 2009

In other news, more people bought a Ford Taurus this past year then the first 10 years Henry was selling the Model-T...

I am not even sure how this graph is relevant. There are more iPhone web users then American Online from back in the 90s during early internet adoption? Duh.

Oman · Dec 16, 2009

The problem other phone manufactures are having is getting their user base to use their phones in the same way iPhone users use theirs. I know quite a few people with various kinds of phones and they use it for facebook, e-mail etc. The iPhone offer so many things to do with it that iPhone users use their phone for many things that other phones are capable of doing but the users of those phones simply don't use it for that.

If these phone companies want to change the game, they will have to make their users want to do as much on their phones as iPhone users do on their phone and that is not likely to happen!

jettredmont · Dec 16, 2009

Seriously Flawed Analysis

First, the "rate of adoption" idea is just plain cheesy. There are way too many other variables in play between then and now to consider 1994 and 2009 to be useful comparisons. If they want to compare Netscape adoption and Mobile Safari adoption then they should be doing it by market share, not by # of subscribers. By # of subscribers compared to Netscape / 1994, you could make any second-rate DSL provider look like the hottest thing ever. That having been said, Netscape - like the iPhone - both took over an existing market (Mosaic and SpyGlass were the main contenders at the time, plus Lynx and Emacs W3 and a dozen tiny competitors) and grew that market significantly; compare that growth to the iPhone/iPod touch and we'd have an interesting and informative comparison.

Second, note the dates of the studies on the second graph. The "HTML Mobile Page Views" data is from *April of 2009*. That's before the Pre, in the days of Android 1.0 on the clunky first-gen models. It doesn't surprise me at all that Windows Mobile smokes Palm and is about on par with Android at that time; today, though, is a much different story. The Apps study was from October: far more relevant than April, but still missing any uptick from Droid et al. And the Shipment Share was July-September (Q3), which has little relation to either of the other two (more relation to the October number than to the April numbers).

Third, this is the work of market analysts. I have yet to see them average out better than common sense when it comes to Apple prognostication. And, common sense says that Apple doesn't have a 2-3 year "lead"; it's always easier for the second company to eat up market share in an established market than to grow that market significantly as Apple has had to do. I think Apple has some tough times ahead of it, should it choose to sit on its laurels and believe that it has a significant head start on the competition. On the other hand, I also doubt that Apple would do this; they tend to advance their products even when there is no external competition - when the most formidable competition for the iPod mini was people who already had an iPod mini, they killed it and gave us the nano to lust after.

aegisdesign · Dec 16, 2009

Vmaatta said:
Comparing iPhone and i-mode adoption to AOL and Netscape from '94 is just wrong in so many ways .

If that wasn't an invalid enough comparison they also use AdMob's stats for ad serving as indication of app usage when that's only counting Ad supported applications. Most of the other platforms don't have ad supported apps - they just have apps that cost enough money to support developers without sullying themselves with advertising.

LagunaSol · Dec 16, 2009

hwhalers said:
If it actually takes until Q4 2010 for WM7 to go gold, the platform is completely dead.

Let's keep our fingers crossed. I would love nothing more than to see Microsoft completely shut out of the mobile space.

-hh said:
I saw that and was ironically wondering where all the clever Media Pundits are, pronouncing a "Microsoft Mobile Death Knell", since we all know that had this been Apple, thats what would have had happened.

And yet the WinBots still claim the media is pro-Apple and anti-Microsoft.

It's a screwed up world we live in.

It is funny to read the WinMo apologists on the forums who reluctantly whimper that WinMo 6.5 does indeed stink, "but wait for 7...it will blow us away!" Um, riiight...

miketcool said:
I am not even sure how this graph is relevant. There are more iPhone web users then American Online from back in the 90s during early internet adoption? Duh.

The graph is relevant not because it shows total numbers, but because it shows rate of growth.

aegisdesign · Dec 16, 2009

InfoTime said:
So maybe AT&T's network is disproportionately loaded? 65% of mobile web browsing is done on one network. That leaves 35% to be done on Verizon, Sprint and AT&T.

They're GLOBAL stats. Add in Vodafone, Orange, Three, Telefonica, T-Mobile, Rogers, etc...

Apart from that they're completely bogus. Most people don't use their phones for web browsing, they use them for email, twitter, facebook and IM which is why RIM and Symbian do so well in market share but so badly in these stucking foopid surveys of internet usage that are entirely biased toward the web and not the internet as a whole.

localoid · Dec 16, 2009

Vmaatta said:
Comparing iPhone and i-mode adoption to AOL and Netscape from '94 is just wrong in so many ways .

It's wrong, twisted, and disturbing in, like, eight different ways.

StuBeck · Dec 16, 2009

LagunaSol said:
Let's keep our fingers crossed. I would love nothing more than to see Microsoft completely shut out of the mobile space.

Why? Competition isn't a good thing?

kdarling · Dec 16, 2009

1) I want to know how much of this browsing is done over WiFi. And how much is for porn.

2) Like others, I want to know what few thousand websites Admob is monitoring. I bet a lot of other mobile browsers never go to those places.

3) What is the report supposed to mean? That Apple has the power to drive standards for DHTML5 web apps that will benefit every mobile user?

That would be cool, except for the fact that they've already proven their unwillingness to care about anyone except themselves. Starting with defining lots of iPhone specific meta tags to make web apps work well only on their device.

Prominent Analysts See iPhone With 'Two or Three-Year Lead' on Mobile Internet Market

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