Web 2.0 Summit: Morgan Stanley Sees Tech Rebound

Morgan Stanley's Mary Meeker lays out the evidence for an economic recovery and for the market might of all things mobile.
In a rapid fire summary of current economic trends at the Web 2.0 Summit in San Francisco on Tuesday afternoon, Morgan Stanley managing director Mary Meeker presented financial data supporting claims that the economic outlook is improving and made the case for a coming mobile boom.

Meeker's data, laid out in a series of slides posted on the Morgan Stanley Web site, offers evidence of economic promise and peril. On the plus side, the technology sector is shining, representing 19% of the S&P 500 market capitalization this year, up from 15% in 2008. And leading indicators are pointing toward recovery.

On the minus side, U.S. manufacturing capacity utilization is only 70%, well below the 81% average over the past forty years. Consumer credit card defaults are rising. New home sales, while off historic lows, remain weak. And unemployment is high and rising.

Against this backdrop of rising hopes and lingering risks, Meeker said that the mobile Internet is and will be bigger than most think.

Apple's iPhone and iPod touch served as the poster children for success. The related devices have experienced an unprecedented rise, acquiring 57 million users in two years. As points of comparison, AOL had gained only 7 million users in the same length of time while NTT's docomo i-mode only managed to get 25 million users over eight quarters.

But Apple's reign may be brief. While Meeker's data suggests Apple's dominance will continue for the next two years or so, it also points to emerging competition from the open mobile Web and Android over the long term.

Google CEO Eric Schdmidt, who said during Google's recent Q3 earnings conference call that Android use was about to explode, apparently sees a similar future.

Mobile devices will be important not just for connecting people but as bridges to remote services.

As Meeker's slides put it, "Mobile devices will evolve as remote controls for ever expanding types of real-time cloud-based services, including emerging category of location-based services, creating opportunities and dislocations, empowering consumers in unprecedented and transformative ways."

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