MORGAN STANLEY RESEARCH GLOBAL Morgan Stanley & Co. International Francois A Meunier plc+
[email protected] +44 (0)20 7425 6603 Morgan Stanley & Co. LLC Katy L. Huberty, CFA Keith Weiss, CFA Joseph Moore September 24, 2013 Morgan Stanley Asia Limited+ Bill Lu Morgan Stanley & Co. International Shawn Kim Technology- plc, Seoul Branch+ Morgan Stanley MUFG Securities Shoji Sato Semiconductors Co., Ltd.+ The Internet of Things: the opportunity is The Internet of Things is now potentially huge Computing Growth Drivers Over Time, 1960 - 2030E Internet of Things The key building blocks are in place for the Internet 1,000,00012 of Things – the next evolutionary step in personal 11 Mobile Internet Desktop Internet computing – to take off. The opportunity is huge 10,00010 tens of bns with the number of units potentially reaching tens of of units 9 billions of billions. Similar to the mobile internet wave, PC units 100 8 hardware stocks could be first to benefit. Minicomputer 1B+ Units / 100MM+ Users 7 Units Mainframe 10MM+ Units The Internet of Things is the next wave of 1 6 Devices / Users (MM in Log Scale) in Users (MM Devices / computing. If IoT follows a similar development pattern 1MM+ Units 5 to previous computing waves, units could reach tens of 1960 1970 1980 1990 2000 2010 2020 2030 billions at maturity. At this stage, it looks more Source: Company Data, Thomson Reuters, Morgan Stanley Research complementary than disruptive to the mobile internet wave. Why is IoT likely to happen now? The key building blocks are in place: These include: 1) the wide availability of smartphones, which can be used as remotes or hubs for IoT; 2) inexpensive and low power processors based on ARM; 3) wireless connectivity and We will organize an Internet of Things panel Bluetooth Smart in particular at a low price point for a at our European TMT Conference in 2-year battery life from a coin battery cell; 4) IPV6; and Barcelona on November 20th, 2013.