Browser wars: Google's browsers surpass Microsoft's in the US (Part 3 of 6)
Apple has started to replace Google as its default search engine with Bing on mobile devices
In the previous part of this series, we discussed how Apple’s (AAPL) lead in the mobile browser market could affect Google (GOOGL). Apple has started to replace Google with Microsoft’s (MSFT) Bing as its default search engine on its mobile browser. Here, we’ll analyze how this could benefit Bing—especially since the mobile search market is seeing tremendous growth.
The U.S. mobile search market is growing fast
According to eMarketer and as the chart below shows, the mobile ad search market was about 25% of overall digital search ad spending in the U.S. in 2013. But this market could contribute more than half of the overall spending by 2015. In absolute terms, the mobile search market could grow from $5 billion in 2013 to $28 billion in 2018, at a compound annual growth rate, or CAGR, of about 42%.
Smartphone market growth would lead to mobile search market growth
The smartphone market is growing fast. Meanwhile, the PC market is seeing a structural decline. According to Gartner, the smartphone market could grow from 1.0 billion in 2013 to 1.2 billion in 2014. The PC market could decline from 296 million to 277 million during the same period. This means the smartphone market is about four times bigger than the PC market currently. This difference in size will continue to grow. This growth could lead to more searches on mobile devices than on PCs.
How would this benefit Microsoft?
This outlook means several positive factors for Microsoft, including:
- An increasing number of searches on mobile devices
- A growing mobile search market
- Apple’s lead in the mobile browser market
- Apple favoring Microsoft Bing as its default search engine on mobile devices
This outlook would also benefit ETFs like the iShares U.S. Technology (IYW) and iShares North American Tech-Software (IGV). These ETFs offer high exposure to Microsoft.
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