As anybody who downloads Katy Perry videos to their iPad know, the mobile Internet is hot.
Today’s Upshot looks at the companies that are involved in the mobile Internet, from the chip makers, to the parts suppliers, to Apple and AT&T. What’s interesting about the column, though, is that originally we were going to do this piece just looking at the companies that had the biggest sales growth, and try and suss out what the trends were.
Well, the trend turned out to be the mobile web. Apart from a few outliers, companies like Stanley Black & Decker, which grew through a merger, and Caterpillar, the vast majority of companies showing big sales growth, 30%, 40%, 80%, were all tech companies related somehow to mobile web. This is a sector that is just growing explosively.
It’s not likely to go cold, either.
If there’s one group of companies that isn’t tied down by the slack economy, it’s those that supply the wiring, chips, and services related to mobile Internet.
The “explosive demand” for broadband, as Xilinx Inc. Chief Executive Moshe Gavrielov puts it, is fueling sales of memory, communications and ancillary chips—and the gadgets that use them.
“Growth for us continues to be driven by the phenomenal rise of the mobile Internet and social network,” said Eli Harari, chief executive of SanDisk Corp., whose sales rose 32% in the third quarter. That’s a trend he expects to remain in place, meaning SanDisk and other chip makers can continue to see material growth even while economies in the developed countries struggle.
To illustrate SanDisk’s recovery, Mr. Harari pointed out that the company’s cumulative operating profit over the past six quarters is more than two and a half times the cumulative loss it posted in the six preceding quarters.