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According to Nexit Ventures, the decade we’re currently living, will be the decade of the mobile. Their research shows that every decade dating back to the 1960s can more or less be symbolised with a certain wave of technological development (and adoption for that matter). In the 1960s it was the mainframe computers, 1970s saw those getting smaller while 1980s to the mid 1990s was the decade of the personal computer and from there onwards we’ve seen the wave of desktop internet. According to Nexit’s analysis 2010 onwards is strongly looking to be the decade of the mobile.

5 reasons mobile will be big
1) Devices – there has been an explosion of smarter mobile devices in the recent years. Part of this has been fueled by new operating systems coming to the market, making smartphone sales a potential 500 million unit business by 2013. However, there is an array of other devices also out there. Apple has come up with its iPad, and many others have announced that they will be releasing competitive products shortly.

2) Wireless access – a natural add-on to the devices business. When you sell smarter mobile devices, it’s clear today that consumers will want internet access to go with it. The concept of wireless access makes available a whole new layer of services to be built. Furthermore, while traditional operators are heavily dominating this business, their monetization models might not be best suited for the changing consumer needs. This leaves the door open to a whole new set of innovation.

3) Mobile software – with over 2 billion downloaded application from the Apple App Store in only 18 months, mobile software has shown there is some serious money to be made. Apple is not the only player in the market, although dominating it currently, as Android market has shown a lot of strength in the recent months in terms of traction. As more and more devices are shipped to the market, application downloads will only increase – making this a very attractive space to be in.

4) Paid mobile services – not only is there money to be made in mobile software, but paid services is also an area that has seen a lot of growth in recent months. Mobile devices by nature will compete in totally new value classes as they are constantly with you, location aware – enabling a new set of services previously unavailable to computers to be capitalised on.

5) Mobile advertising – lastly, an area that will further enable companies and services to monetize their offering. Advertising has been a key component of making business opportunities work in the desktop internet -era, but it is unlikely mobile advertising will play such a huge role. Nevertheless, the opportunities mobile advertising enables for service providers and app developers are very concrete.

With these five attributes, it can be said that mobile as a sector wil grow definitely from where it currently stands. This is a clear signal for startups as well, to make sure they move quickly to build on those ideas they may have.

Will there be revenue?
Simple answer is yes, absolutely. While many believe that mobile won’t be tens of times larger than desktop internet, some sources do believe that it will be several times the market size of the previous wave. Money is basically to be made on each of the previous 5 ingredients of the market.

Estimates vary greatly, but show the breadth of business potential in the wave itself. Below is a table showing the estimates of each market sector.

Although the scale of the estimates is large by all means, I think it is safe to assume that the market size is extremely attractive, both for startups and investors.

Interesting areas for M&A, ie. where are investors looking for startups?
So if there’s revenue to be made, what areas interest investors the most? According to Nexit, there are 2 areas that they outline as examples.

1) Develop infratructure layer technologies that can help the leading companies position better in their business. Some key areas as an example are mobile video, location based technologies as well as mobile advertising technologies.

2) Superior user experiences or content that efficiently leverages the dominant distribution channels. Yet again, making the lifes of the big boys easier makes any startup an interesting target for acquisition.

What are your takes on mobile? Did we leave any obvious ones out that both investors and startups should be looking into?

This post is part of a series of posts supported by
Nexit Ventures.

Nexit Ventures is a mobile venture capital firm focused on wireless technologies and services. Leveraging its extensive network in the global mobile marketplace, Nexit invests primarily in Nordic and US-based earlystage companies with products and services for a global market. For Nordic mobile companies, Nexit provides a bridge to Silicon Valley markets and exit opportunities.

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