Mobile Content : Case Study for Economic Recovery?

 

The deluge of economic doom and gloom in the news would make Chicken Little seem like a wide-eyed optimist.disney-chicken-little-sky-falling

Headlines scream at consumers with news like:

Auto Sales Plunge 45% to 27-Year Low

-Unemployment Rate hits 8.1%, Most Jobs lost in a short time period since they started keeping track in 1939

-Citicorp stock dips below $1

With all of this news you would expect that Eli Lilly, the manufacturer of the world’s leading anti-depression medication would be having huge profits. Their stock is down about 30% since the beginning of the year. I wonder if they hand out Prozac in their cafeteria?

In midst of all of these downward indicators, I saw several news stories in the last week about the forecast for Mobile Content Services.

The best the press could muster for a down beat story on the Mobile Content industry was “Under the worst case scenario, Mobile Content would grow by only 7% this year”. The worst case scenario for GM, GE, Chrysler, AIG, and the other former titans of American Industry is that they cease to exist, and for Mobile Content its only 7% growth. Wow!

Unfortunately the Mobile Content industry is not a trillion dollar industry and cannot impact the overall economy in a meaningful way. It can however serve to highlight what still works in our economic system.

When innovation is coupled with the right financial and human capital resources, true value is created for consumers, investors and employees. This has been the model for value creation in high tech for a generation.

During the worst economic carnage since the 1930’s, a new economic value chain has been created that is enabling unprecedented portfolios of mobile applications on a new generation of devices.

There are now over 15,000 Apple iPhone applications.

Twitter and Tweeting are accepted terms used on the nightly news.

Android (G1) is not science fiction and 10 year olds are carrying Blackberry’s.

I’ve been in the Mobile Content Industry for over a decade. The vibrancy of this new economic value creation system for mobile content is what we have been trying to achieve for a long time. Device technology, software, networks and courageous investors and management have finaly created the reality of what was once just a dream.

Despite the example of the mobile content industry, there are literally hundreds, if not thousands of successful value-creating entrepreneurs presently on the bench. These are the leaders who have started, managed and sold companies. In the process they created tens of thousands of jobs, made millions for their investors and providing valuable services for businesses and consumers. Of course not every business was successful, but enough were to make a well-managed portfolio a good return.

I have the honor to personally know many of these industry leaders. I find their forced bench sitting, due to a lack of investment capital, one of the most staggering aspects of our present economy. Our nation never needed their talent more than it does now.

The U.S. Economy is going through a fundamental re-structuring. We have lived beyond our means because we have not created enough products and services that are valued on a global scale. The economy for the goods and services of the last century will continue to shrink. In my view the financial debacles of junk mortgages and the Madoff Ponzi schemes are symptoms of the underlying problem with our economy. Money was created with schemes that were in the final analysis, valueless.

We need new innovation, new services, new products, and new industries. We need real value creation.

The mobile content industry is just one example of such a value creation industry.

So here’s a note to all of you investors out there who have run for the hills.

“If mobile content and applications can thrive in this environment, what do you think will happen when the general e conomy finally recovers?”

seedmoney1

 

For those with the capacity and the courage to invest in the right opportunities now, the rewards should be extraordinary.

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1 Comment

Filed under Apple, auto sales, bailout, blackberry, citicorp, iphone, mobile, Mobile Application Stores, unemployment

One response to “Mobile Content : Case Study for Economic Recovery?

  1. Michael

    Do you have a source for the 7% increase story?
    To be honest, all i see in the industry is not supporting your theory. The numbers are (by far) not as bad as in other industries like automotive but its still a decrease since about 4 months (in europe – and i doubt rising user numbers in emerging markets can compensate lost revenues, as price level is just way lower)

    What is more: I dont think our industry really creates value. To be honest – about 80% of the rev created origin from subscription billing WITHOUT (mobile) content being delivered to the customer. I dont see a great value here for the customer.

    A rising star are – of course – all activities like apples app store. This business niche is great, will still grow in 2009, find many successors within competition – but will not be able so resolve the general problems we are facing in the industry.

    If you replace “mobile content” by “mobile services” i maybe might agree 🙂