Market Overview

Tablets Will Drive Data Demand


According to a new report from Cisco (NASDAQ: CSCO), tablet PCs like Apple's (NASDAQ: AAPL) iPad, will generate nearly 5 times more data traffic than the average smartphone. In 2010, mobile data traffic per tablet was about 405MB per month, compared to the nearly 79MB per month for smartphones. This is similar to other analyst's data usage estimates. Goldman Sachs forecasts 30% annual tablet data growth and by 2020, nearly 17% of all mobile wireless data demand will come from tablet PCs. As these devices continue to grow in popularity, network usage will grow just as fast.

However, with broadband and mobile internet bandwidth already stretched pretty thin, the opportunity for investors is within expanding that network. In the United States, only 27% of its residents subscribe to broadband internet service and less than 50% of homes even have access to high speed internet. The iShares S&P North American Tech-Multimedia Networking ETF (NYSE: IGN) and the PowerShares Dynamic Networking (NYSE: PXQ) both follow baskets of various networking firms. While American Tower (NYSE: AMT), Crown Castle (NYSE: CCI) and SBA Communications (NASDAQ: SBAC) represent the tower owners. By focusing on the networking infrastructure firms, investors can profit from the growth in tablets, no matter what device is popular.


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