Sometimes it’s worth taking the long view: we can see just how far we’ve come in a relatively short period of time.

The first decade of the 21st Century marks a pivotal point in the modern technology revolution: digital information become portable, storable and easy to get. A world that had been defined by computing and software applications expanded to include uses that were considered to be futuristic fantasies just a few years before.

This graphic from Mashable tells the story of the iPod, the single most influential digital device of the past 20 years.

The terms mobile internet and applications are pretty much abstractions unless you are right in the middle of it.

If you’re not one of the 10 million people or so who’ve moved to the iPhone, let me give you a brief tour of Let me show you what it means.

The four images to the right are snapshots of the screens on my iPhone.

The way the iPhone is designed is that the icons on the bottom grey bar appear on each of your screens. The information at the very top band gives you basic information about your phone — the connections, the time and your battery life.

The four icons at the bottom access the basic functions of the device: the phone, your e-mail, your web browser and your media library.

You are able to download and install, through Apples App Store, different applications that enhance the utility of your device. There’s no real limit to the number of applications that you can install.

The first page of my iPhone apps have the ones that I use most frequently. My calendar, the camera, the photos database, and a bunch of different content applications. My key social media apps are on the front page — Facebook, Twitter and CubeTree, a social media platform we are testing within the company. I also have the Kindle app, because I have ended up using my iPhone as my primary eReader, and a couple of branded news sources: Bloomberg and ESPN. Foursquare and Yelp are on the front page because I’ve been testing both apps recently.

To get to the second page, you simply drag your finger across the screen from right to left and the new page comes up.

On the second page, you begin to see some of the flexibility of this device.

I have a couple of games installed on this screen, which are primarily used by my 4-year old. I’ve got three applications associated with my social media activity: Ego, which accesses my Google analytics, Twitter and Feedburner data on a real-time basis; Statistics, which shows the stats of my WordPress blogs, and a WordPress app that allows me to create blog posts and edit comments on the moves. There’s my Amazon cart, for shopping; my ApartmentFinder app, and some other basic components of the iPhone system.

Move to the third screen and you see some less frequently used tools. A flight tracking applications. A mind-mapping applications. An applications that tells me the schedule of MetroNorth trains. A movie finding applications. Some game.

The fourth screen has the same variety. A TV Guide app. The local news channel app, which allows me to get quick access to school closings and weather. A ski report app, which I recommend to any one who skis — you get the real scoop on snow conditions from the updates people leave. And, finally, an application that turns my iPhone into a remote for our Apple TV in the library.

There you have: a peek into the world of applications. Some of these applications cost money — the most expensive is probably Madden. I’ve downloaded and then deleted dozens more.

My web experience through the filter of applications is dramatically different than my web experience on my laptop. I am probably more brand-loyal in my app usage. I am definitely exposed to less advertising. And, my usage of Google is down, because I know exactly where I’m going for a bunch of different things. When I need to search, I’ll use the Google box in my Safari browser on the iPhone. But, I’m seeing a lot less of Googles advertising.

It’s a different ecosystem than what we’ve traditionally thought about for the experience of web content.

We believe more users will likely connect to the Internet via mobile devices than desktop PCs within the next 5 years.
The Mobile Internet Report
Morgan Stanley

Apple’s launch of the iPad last month provides a catalyst to look at the implications that the broadly-defined term Mobile Computing has for the interplay of Media and Marketing. Clearly we are at a critical inflection point.

Broadly defined, the mobile Internet market includes a broad range of devices, like Smartphones, E-readers and cell phones, that can access applications and content over the web. (The category doesn’t include portable computers and netbooks.

Right now, the scale of the mobile computing market is relatively small. While 92% of Americans own a mobile phone, only 17% of them used their phone to conduct a mobile banking transaction in 2009, for instance. And, according to Comscore, only 27.5% of Internet users used a mobile web browser in the last three months of 2009. There are probably just over 10 million iPhones active in the U.S., a fraction of the 208 million users reported by Comscore in January.

The current scale of the mobile web is easy to marginalize as an early-adopters paradise. That would be a mistake. The rate of mobile web usage has accelerated rapidly over the past six months, and the configuration and usage of the mobile web has significant implications for those us of who are media and marketing professionals.

The Scale & Velocity of the Mobile Internet is of Consequence

Over the past six months, mobile data bandwidth worldwide has increased by more than 70%, with streaming video driving a significant portion of the demand. According to forecasts from Cisco, mobile data traffic will grow 40% from 2009 to 20014. By that time, mobile bandwidth will be equivalent of 249 years of DVD quality feature-length films.

The quote at the opening of this post, comes from Morgan Stanley’s report on the Mobile Internet, where Mary Meeker smartly frames the scale and impact of this inflection point .

The size of the mobile web is going to dwarf the size of the wired web by a factor of 10, Morgan Stanley projects. Already, the mobile internet, as measured by the iPhone and iTouch, has achieved scale at a faster rate than any other transformative technology.

Device Usage Changes on the Mobile Internet

The mobile device has become the hub of user’s digital activity executed off the backbone of the Internet.

Only 45% of the time spent on an iPhone is dedicated to talking on the phone. Texting and doing e-mail make up 26% of the activity, while listening to music and playing games make up 18% of the activity. Surfing the web makes up another 9% of the activity.

Emarketer shared some ComScore research recently that captured how diverse the web-based activity of smartphone users was. 94% of the respondents that used an iPhone consumed mobile media; 80% accessed news; 58% participated in mobile networking.

This new mobile user is markedly different from the traditional cell phone users, only 26% of whom consumer mobile media on their device, and only 14% who accessed news.

The best lens on the evolution of Internet habits is gained by looking at the behavior of young adults, for whom using digital devices of all kinds is second nature. ComScore’s recent study on wireless internet usage by Gen Y paints a picture of a wireless cohort who are leveraging targeted applications that are built on the backbone of the Internet. The portrait is very different from the accepted notion of Internet users browsing the web.

• 81% of adults between the ages of 18 and 29 are wireless internet users. By comparison, 63% of 30-49 year olds and 34% of those ages 50 and up access the internet wirelessly.
• Roughly half of 18-29 year olds have accessed the internet wirelessly on a laptop (55%) or on a cell phone (55%), and about one quarter of 18-29 year-olds (28%) have accessed the internet wirelessly on another device such as an e-book reader or gaming device.
• The impact of the mobile web can be seen in young adults’ computer choices. Two-thirds of 18-29 year olds (66%) own a laptop or netbook, while 53% own a desktop computer. Young adults are the only age cohort for which laptop computers are more popular than desktops.

The un-wiredness of Gen Y is a driver of the success of the iPhone and Facebook’s Mobile app. This early-mover position should have long-term benefits for both companies. Morgan Stanley report believes that Apple and Facebook have created dominant market positions in the early Mobile Internet ecosphere.

Of Facebook, the report says:

We believe Facebook has the potential to serve as a communications platform/engine of the one-to-one, one-to-some and one-to-many (and vice versa) for the Mobile Internet.

As for Apple, Morgan Stanley points out that “in technology, the product with the most/best apps usually wins.” Apple’s 100,000+ application universe dwarfs that of the next-closest competitor, Google’s Android platform. Apple’s mobile ecosystem is generating more than $4 billion a quarter in revenues; a combination of paid apps, subscriber fees and phone sales. The more-than 100,000 applications in Apple’s Apps Store had been downloaded more than 2 billions times, as of September 2009.

Facebook already is the most popular Mobile web site. According to ComScore, 4.9 million web users viewed the site using mobile handsets in December. The usage was frequent and intense: those 4.9 million users viewed more than 2.6 billion pages for more than 2.2 billion minutes.

High-Level Implications of the Un-Wiring of the Internet

The two most obvious implications of the explosion of the Mobile Internet are anytime, anywhere access to web content by a much bigger universe of users.

That kind of shift in scale gets the blood rushing.

The urgency that accompanied the launch of the iPad is an indicator, however, that this expansion of web access isn’t going to be a simple matter of taking the current business models and pushing them forward. In the iPad, many of us in media and marketing are looking for a mobile mass media device. Basically, a future with a iPad-like device as the dominant platform gives the current ecosystem of media and marketing models — content supported by advertising, with advertising becoming more deeply embedded in terms of relevance and utility — a richer, more accessible distribution point to consumers.

That’s not going to be the dominant model, however attractive it might be.

The model of Internet design that drives the current paradigm for media and marketing is a multi-function, data-processing device — the computer — connecting to a group of inter-connected networks — the Web — through a single point of entry — the browser.

Media, marketing, communications, interaction, storage all happen through this point of entry, creating a vast Swiss Army knife of utility.

Look at the way that computing and communications habits shift among Gen Y, according to the research.

Networking and communications becomes the core feature of their cellular device. Their web-based behavior shifts towards those applications that create utility and connectedness. Their “content” time — consumption and creation of edited content — is typically isolated to their computer. As the utility of their primary communications device expands, their usage of their primary computing device declines.

There isn’t going to be a seamless melding of these two environments. Computing and communications devices will have common attributes and functionality, but each will have their unique emphasis and usefulness. (Where does the iPad sit? As a tremendous media device. But that will be a subset of two larger markets — computing and communications.)

The shift towards unwired connectedness driven by communications-focused devices has a big impact on those of us in media and marketing.

The first shift is to begin thinking about our web assets in terms of defined applications rather than as content-publishing systems. The mobile Internet turns web assets into the backbone of targeted patterns of usage by consumers. They want to find a thing, learn a thing, do a thing, within the constraints of the device.

The second shift is to rethink mobile as a media platform. While there will be a much larger addressable market, the traditional inventory of advertising is going to shrink. As a result, more emphasis than ever will be put on integration of marketing messages into content and on the conversion of users into some measurable business activity.

The third shift is ownership. How do you get to a unique identifier for a consumer? How do you generate a relationship with the consumer that is not wholly gated by the cellular provider or the device provider?

The fourth shift is sustainability. The switching cost of applications on a mobile device are minimal. Apps downloaded on Apple’s platform have a remarkably short half-life.

We’re entering a new generation of connected content and communications, driven by a new set of devices that have a different topography than traditional web development. While it’s exciting, it will be a mistake to believe that the transition will be orderly, and it presents a new challenge that only the most creative and persistent media and marketing brands will solve.

Here is another link to the Morgan Stanley summary of The Mobile Internet Report.

Here’s two tables, courtesy of eMarketer, that put Mobile in perspective. Big perspective, that is.

The first shows Morgan Stanley’s outlook on the growth internet-enabled mobile devices, which the firm says will grow 120% in the next four years.

That growth is driven by a high-level of consumer desire. Pew Research released a study that shows that a majority of U.S. adults believe “handheld devices are a change for the better.” The younger you are, the more likely you are to share that sentiment. The dividing line appears to be 50. Younger than 50 and mobile is all good; older than 50 and you have reservations.

Here’s Mary Meeker of Morgan Stanley presenting at the Web 2.0 conference last year. A large portion of the presentation is focused on mobile.

www.youtube.com/watch?v=SyZuoDIVXBQ