4 Companies to Own in the Mobile Segment of Real-Time Web

Includes: AAPL, BB, GOOG, IBM
by: SoundView Technology Group

By Kris Tuttle

Thanks to Google (NASDAQ:GOOG), this week already started off with a focus on the real-time web, based on mobility and new devices with sensors, cameras, microphones, HD displays and speakers. On Monday, Google presented a slew of new features and technologies aimed at improving search by location, by voice, and by sight. When combined with enhanced real-time search, one that includes a variety of content from sources like twitter, location-aware applications and fixed search content, the real-time web becomes a much richer experience than what we have known so far with things like IM and SMS.

Wednesday and Thursday we will be attending Le Web 2009 in Paris, which has chosen “real time web” as the theme. As with all Le Web events, there is a fairly diverse range of content across three different programs but the usual suspects (Twitter, Google, Facebook) will all be in attendance and elaborating on real-time as the latest “mode” of web development.

We wouldn’t put “real-time” as a true facet of technology as it relates to our work. Latency has been a key factor in technology usage for thirty years. We did include an analysis of this and other features for what we view as the ultimate Internet architecture in our February 2007 research monthly (pdf). IBM funded many studies that demonstrated the dramatic increases in productivity and value that came from “sub-second respond time” as we called it back then. As with many things on the web and in the cloud, old things are new again. What’s new now is the ability to deliver instant responses across applications, networks, distances and devices.

What’s so powerful about this notion today is the richness that can be brought into the realm of real-time use: People, places, things, and all related information in one place and current to within a few seconds ago. As we’ve written before, the initial oohs and aahs of insight will be coming from so-called augmented reality and real-time social networking applications on the iPhone and the like.

From an investment standpoint, we continue to focus on the mobile segment of this space with companies like Apple (NASDAQ:AAPL), Google, Research in Motion (RIMM) and Motorola (MOT) being the ones to own. Based on our IV work, it seems that Research in Motion has the most near-term upside here. RIM is also too strategic to not be acquired by someone like Microsoft (NASDAQ:MSFT), HP (NYSE:HPQ), or IBM.

More broadly, we know that cloud-based GPU computing is already in early deployment which will add yet another growth story for both Nvidia (NASDAQ:NVDA) and AMD.

If it feels like just the beginning it’s because it is. There are many more related themes to this trend as it develops, ranging from wired and wireless bandwidth, content, devices, cloud services and infrastructure, new software infrastructure and on and on.

Thanks to the exponential pace of technological advance and our linear perceptions, we know that many of these advances will seem to happen “all of a sudden” in the next few years.

For more information on the Google Search briefing, there is a summary here on TechCrunch. More information on the Le Web 2009 program can be found on the Le Web event website. The events on Wednesday and Thursday are supposed to be available via webcast.

Disclosure: Research 2.0 has model portfolio positions in Google, Apple, Research in Motion and Nvidia.