Growth Attracts Capital

Here’s another interesting snapshot on why so much attention is moving into mobile (smartphone + tablet): Mobile Is Eating the World (thanks to Paul Stephanouk for the link).  You don’t have to dig through the whole presentation, just page through the graphs that show the growth patterns in the last few years.

Double-digit growth year-over-year creates very profitable marketplaces.  China has seen this level of growth in internet, specifically broadband, penetration over the last ten years, but the curve is starting to slide.  Smart companies in China know that user growth over the next ten years will not sustain the numbers that have been possible over the last ten.  Similarly, worldwide, people are looking at the potential increase in both the smartphone and tablet adoption numbers (and not just potential; other studies have shown that this is an area with “hot” consumer interest levels), and the growth dynamics outpace what you can see in any other entertainment space.  Movies, television, music, no one is seeing double-digit growth in user numbers outside of internet-enabled platforms.  In fact, is there any major consumer product category that is seeing growth at these levels?

From a sheer size of market perspective, digital entertainment still trails a large variety of markets: health-care, agriculture, hell, even porn.  But growth is what draws capital, because stable markets may be profitable, but growth is what makes profits into fortunes.  PC isn’t dead; consoles are not dead; they’re not even dying.  The competition between platform holders in mobile and internet, though, is what’s going to drive the capital markets for the next decade, or at least until new platforms emerge.

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