The mobile technology sector is a bright spot in an otherwise difficult year for M&A. Updata Advisor’s transaction database shows the number of acquisitions in the mobile IT market has more than doubled in the first six months of 2009 versus 2008, to 17. While transaction volume in the sector is down, this largely reflects the influence of Nokia’s 2008 acquisition of the remaining part of Symbian for $790 million.
Amazon has been particularly busy this year advancing its m-commerce strategy, acquiring SnapTell (image recognition-based mobile marketing solutions). Amazon, as well as IAC/InterActiveCorp, has also recently acquired companies developing iPhone applications.
Speaking of applications, Apple announced today that there are officially more than 65,000 apps available by more than 100,000 developers – with an average of 299 new applications added per day (just try and keep up with downloading all those!). Data from Juniper Research shows direct and indirect revenue from mobile apps is expected to exceed $25 billion by 2014, compared to $7 billion in 2008. This demand is driving venture investment in mobile apps.
Last year, Silicon Valley venture capital firm Kleiner Perkins Caufield & Buyers dedicated a $100 million fund to start-up companies developing apps and services for the iPhone. So far the fund has invested in six start-ups, including $20.5 million of series B funding at iControl (mass-market solutions for remote home monitoring), and Pegalo’s series B of $15 million (innovative online information product development). According to data from Chubby Brain, more than $102 million in VC funds has been invested in 17 companies. On top of that, BlackBerry has partnered with Thomson Reuters and Royal Bank of Canada to launch a $150 million fund for BlackBerry apps.
Google is expected to be a major beneficiary of mobile migration. While the tech world is abuzz about Google’s plans for Chrome OS, its mobile operating system Android is quietly making waves. IDC predicts Android’s share will grow from its current 3% to more than 10% by 2013 – digging away at current market share leaders Symbian, Blackberry OS and even (gasp!) Mac OS X. And on the VC side, Borqs – a Beijing-based startup that develops mobile software for Android – says it has received $17.4 million in Series B funding as an increasing number of devices using the platform are being readied for launch. Some 18-20 new Android-based phones are expected to be released this year, including the T-Mobile’s successor to G-1, according to GigaOM.
Given the mass migration away from traditional feature phones and into the continually advancing and growing market of smart phones, we believe this sector is only going to get hotter.
1H Mobile Technology Transactions
