Invest In What The Kids Are Doing...
Everybody wants to find the next Google to invest in. Eric Schmidt, the CEO of Google, says put your best people in mobile. That’s an interesting concept. So what he’s trying to say is mobile is the future. Mobile is where technology is going.
Basically, it’s because everything that you do that can be digitized is going toward mobile. Whether it’s voice, music, entertainment, information, everything is going toward mobile. So if Eric Schmidt, who runs one of the most significant technology companies on the planet, is basically saying put your best people in mobile, maybe as investors, we should be putting our best technology dollars into mobile.
So… To put it into perspective, we look at mobile, and we think about how significant it is. What does it really mean? There are a little bit less than 7 billion people on the planet.
And we compare mobile to other technologies and other industries. Think of automobiles. There are a billion automobiles registered in use today worldwide. There are 1.1 fix-line phones. There are 1.2 billion personal computers. Just think about that. 7 billion people, 1.2 billion personal computers. That includes tablets, PCs, laptops. There are 1.6 billion television sets. There are 1.7 billion credit card users worldwide. There are 2 billion Internet users. Think about that. There are 2 billion — again, there are more Internet users than people with PCs, that’s important. There are 2.2 billion people with a banking account. This includes everywhere, the United States, developed countries, developing nations, underdeveloped, doesn’t matter.
This could rival the great market stories of our era. What you’re about to see is so secretive — you could easily see huge profits BEFORE the story hits the mainstream.
This is what we’re looking at here. There are 3.9 billion radio receivers in use today. So there’s the number. There are 5.2 billion mobile subscribers out there. Unique, 3.7 billion. That’s over half the world population with mobile phones.
When you think about it, it makes sense. Pretty much everyone in this room has a mobile phone. Any of the developing countries, everyone has a mobile phone, kids have mobile phones. In some of the smallest countries, some of the poorest countries, the only way they can communicate is via mobile technology. Then we think about the future as investors. We’re all investors here. We’re all looking for the next Google, the next great opportunity, great investment.
If you’re thinking technology, what you want to do is — what are the kids doing?
Not what I’m doing, not what you’re doing. What are the kids doing?
Because that’s where the real future is. That’s where the growth is going to be. One in three teens today send over 100 text messages per day. If they’re sending 100 text messages, they’re receiving 100 text messages. That’s 200 text messages a day. And they’re doing that on their mobile phone. ChaCha, a mobile phone company, surveyed teens. 61% of the teens said, “If I could have one device, it would be a mobile device.”
Not a computer. 18% of them said they would want a computer, and 61% said they would want a mobile device. These are the kids that are growing up, and they’re going to be running future technologies, future businesses. Clearly, mobile is the future. And sticking with the teens, try to understand what they do with their mobile phones.
You would think that they talk on their mobile phones. They don’t.
Based on the ChaCha study, 68% of the teens prefer to text. Talking, only 10%. It’s not very much. The most telling figure is email. Less than 1% of the kids are actually emailing each other nowadays.
So this is, again, from an investor’s standpoint, understanding where the trend is. Where are the opportunities? What’s going on? Where are the changes happening? So again, it’s not what you and I are doing. I still fax. Email is still important for me. But where is the future going to be? Where is the next Google?
You never hear about adversities in mobile. Maybe because mobile is probably the most advanced, most important productivity tool on the planet. Think about it today. If you didn’t have a cell phone, how would you communicate with your spouse? How would you communicate with the office? How would you stay in touch with your kids? Just imagine. So it’s a productivity tool that’s accessible to everybody. So there’s the number, $1.18 trillion in revenues last year. It’s very big.
And it’s not just big, it’s growing. Growth is pretty much the lifeblood of earnings and investors. Without growth, without real dollars, without real buying power, you don’t have an investment.
So mobile is big. So the macro picture is telling us that it’s big, and it’s growing. Other trillion-dollar industries, cars, food, clothing, construction, weapons, banking. I don’t know anybody buying banks nowadays, but banking is a trillion-dollar industry. Mobile is the fastest-growing trillion-dollar industry. What you don’t see on the list? You don’t see movies, music, pharmaceuticals, you name it. They’re not trillion-dollar industries. Again, trillion-dollar industries are very rare.
A trillion-dollar industry that’s even growing is a once-in-a- lifetime opportunity.
Anybody ever heard of Angry Birds? Angry Birds is taking off leaps and bounds. The rest of the industry is hurting. But yet, Angry Birds, or Rovio, the maker of Angry Birds, they’re getting ready to launch a billion-dollar IPO. And this is a company that maybe two years ago probably didn’t really exist.
This is all due to mobile technology.
It’s a mobile-based platform. Bigger than Angry Birds is a company called Zynga. Who has heard of Zynga? Zynga is getting ready for a billion-dollar IPO. Their sales are up five-fold from last year, from 120 million up to 600 million. They’re getting ready for a $1 billion IPO. That’s not a $1 billion market cap. That’s $1 billion in cash. We’re talking about a market cap of anywhere between $20-30 billion.
Again, this is all new. This is all due to mobile technology, and these are the things that, as investors, we should be paying attention to.
It’s important that, as investors, we understand that the Internet, which is big, is adapting to mobile, and pretty much everything is adapting to mobile. So if you’re running a business, you want to think about your mobile strategy. If you’re looking for an investment, you want to think about your mobile strategy.
Regards,
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