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That said, mobile’s gonna be huge

|Includes: Apple Inc. (AAPL), GOOG
The release of Mary Meeker’s gargantuan tome, which Henry Blodget so beautifully summarized in four words, reminds me that this is the time of year when predictions are made. This puts me at a blogging disadvantage, although leaving me in good company with capital markets participants everywhere. I was considering this issue while sitting through a number of M&A, private equity, and venture capital panel discussions today, noticing how the tone has changed over the years. I remember these deal conferences back in 2006 and even 2007, at which time the atmosphere was of unbridled grandstanding. Circa 2008 and early 2009, this morphed into almost pure despair. Nowadays, the extremities of emotion have been replaced with carefully chosen words, incomplete sentences, hedging of statements, and the perpetual disclaimer, “that said…”

That said, I will go contrary to my better judgment and make some forecasts, in keeping with the time of year and this being a blog and all. That said, these aren’t predictions, really, as much as considerations. If anything, these are suggestive, sort of like bringing up possibilities, and with all due respect.

That said, because the world in 2010 will likely be even more vast than in 2009 (this much is clear), I will limit myself to a single theme for purposes of the current article. I may follow up with other themes in days ahead, but for now let me begin with the issue that is on everyone’s mind:

The new Google Phone and what it means for the future. Here is my string of considerations, as it relates:

  • Consumers will not resume spending again like they used to, because an 18-month hiatus from the mall has made us realize that we really are alright without owning every last trinket and new chotchkie in the bin.
  • The new Google Phone would thus be a tough sell at full price unsubsidized, and it isn’t like Google needs the cash. So, not only will this item not be sold at full price, but will be sold for almost nothing. Virtually given away.
  • Google will share the subsidy with advertisers, and consumers won’t mind the ads, because it really is not such a big deal to see an ad, let’s be honest.
  • With net neutrality, which will pass, Google can thus move from the desktop to the airwaves, which is a whole new market with lots of upside per Mary Meeker.
  • Apple, more or less the incumbent in the field, will have decisions to make, won’t they… luckily their cash balances are no laughing matter, so it could make sense for Apple to throw AT&T once and for all under the bus and subsidize its own open phone.
  • The possibilities are endless, and with the hardware ice thus broken by the low-cost Google Phone, eReaders are next, naturally… and eventually other trinkets and chotchkies.
  • As entertainment hardware units are thus purchased at little to no cost, and as content is already for the most part free, consumer disposable income for communication expenditures increases.
  • Mindful of this very thing, and with net neutrality hot off the presses, telcos, cablecos, and wirelesscos, increase their charges to consumers… because somebody needs to pay for all that free bandwidth allocated to Apple and Google and Amazon. Consumers oblige, because they can afford to within reason.
  • And so, the age-old media model of advertising and subscription economics thrives, just in a different way and given new technical realities. What used to be the HBO or magazine subscription will be the monthly bill to Verizon, and what used to be the annoying commercial at the moment of high television drama will be an annoying new ad each time we turn on our free Google Phone… supplied like a free set-top box by the cable company?

I don’t know. Stay tuned for more.



Disclosure: No positions