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Mobile Internet Boom: It’s All About Asia

21 June 2012 in Trading Ideas

While the US will likely see a gradual increase in ownership of smartphones and other devices with mobile internet capabilities, Asia is primed for a much sharper rise.

Asian markets, especially India, have lagged behind more developed countries like the US in seeing its citizens adopt the devices. But all this will change rapidly, according to Exchange4Media, which highlighted a recent PricewaterhouseCoopers report that outlined the upward potential for mobile internet stocks because of increased device ownership throughout Asia.

According to the annual Global Entertainment and Media Outlook from PwC, mobile internet access subscribers, one of the main drivers for growth in digital spending, are expected to double to 2.9 billion throughout the world by 2016.

India will lead the expansion, the report says, as subscribers there will increase from a relatively low number at a compound annual growth rate of 50.8 percent, making it the fastest-growing mobile internet market in the world.

While India is expected to be the fastest-grower the sheer massiveness of China’s population combined with an anticipated boom in new mobile users also will be a huge factor. The Register reported that roughly one-third of the world’s mobile internet users will come from the Asian superpower by 2016. Of the 2.9 billion global mobile internet users projected by 2016, 1 million will be from China, according to the PwC report.

PwC Partner Cecilia Yau noted in the report that China’s rise will be driven by the combination of a huge mobile phone user base, less-expensive handsets, increasingly better networks and innovative applications and services from the content providers, according to the Register.

How will mobile internet companies adjust their business models to support the growth in subscriptions?