Profit From the One Company That Will Win the “Mobile Internet” Gold Rush

By Money Morning
Jon D. Markman writes: Experts call it the “mobile Internet,” and it’s the next real “gold rush” in the high-tech sector.

And in my latest report, I’ve identified the next set of big winners.
Investors who act now can expect to profit in a big way.

And one stock in particular – a networking play – is actually one of my favorite stocks for this year.

How to Pick the Mobile Internet’s New Winners

Analysts have been predicting the Internet’s “mobile explosion” for years.

It’s finally happening. And it’s a much bigger blast than anyone anticipated.

Slightly more than a year ago, Gartner Inc. (NYSE: IT) projected that 172 million Web-connected mobile devices would be sold in 2010 – a 45% increase over 2009.

And the story gets better from there: Just weeks after Gartner’s forecast was published, the once-wild estimate suddenly seemed tame – since 61 million were being sold every three months.

Mobile devices – and M in particular – are a big, big business now.

But here’s what really has me jazzed about the tech sector right now: Mobile devices are one of the big opportunities that I see in the New Year.

The growth potential over the next 12 months is spectacular.
More than 8 million iPhones are sold each quarter. And roughly 200,000 new Android phones are activated every single day.

The amount of data being transferred through these devices is astonishing.

Indeed, Google Inc. (Nasdaq: GOOG) Chief Executive Officer Eric Schmidt notes that “every two days, we now digitize as much information as we did from the dawn of the Internet until 2003.”

And that’s just it.

The mobile Web is putting countless new demands on technology – far more than the old, wired Web did. And this development is inconceivable without Apple Inc. (Nasdaq: AAPL), Google, Inc. (Nasdaq: AMZN), and Netflix Inc. (Nasdaq: NFLX). Those companies will continue to reap the benefits of leadership.

But it’s the new companies – springing up left and right to fill the gaps – that offer the real windfall profits. You see, each of their business models offers a ton of operational leverage, which means most new revenue goes to the bottom line.
The Next Networking Giant
The “supply chain” for the mobile Web is a long one. It includes handset makers, chip and capacitor makers, security software makers, application developers, “cloud-computing” software makers, cellular tower builders, wireless phone carriers, RF radio makers, and suppliers to each.

There’s also money to be made in the pure-play mobile Web players, in semiconductors, in storage and in networking.

In fact, it was in the networking sector where I discovered the stock that is my favorite technology play for 2011. In fact, I’d go as far as to say that this is my favorite stock – of any type – for the New Year.

The company is a technology leader and low-price leader, and its stock has come to deserve a premium Price/Earnings (P/E) ratio. It managed to surprise on the upside, even in these difficult times, by reporting that profits jumped 75% in the second quarter relative to the same period last year, on revenue growth of 34%.

The company in question has a shot at becoming – in this New Era of the mobile Web – what Cisco Systems Inc. (Nasdaq: CSCO) or Juniper Networks Inc. (NYSE: JNPR) was to the first part of the Internet boom back in the 1990s (during the “real” growth that came before the dot-com bubble).

Indeed, based on increasing demand for its products and services, it could happen even sooner.

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