Mobile video viewing appears to be additive

Mobile offers new opportunities for video viewing, as smartphones and tablets offer options in terms of both when and where content can be viewed. This plays perfectly into the increasing trend of consumers accessing more and more content on the go and on demand.  

Device design also helps: Smartphones are now integrating larger screens and speedier processors. And the increasingly popular mini tablet format is perfect for on-the-go video. 

But, carriers may have a lot to say: Mobile video already accounted for more than 50% of global mobile data traffic for the first time in 2011 and will demand more and more bandwidth as consumers embrace it. The big question is how carriers will respond to the resulting data demands. If carriers limit data with tiered plans and high prices, mobile video's potential could be stifled. 

Read more: http://www.businessinsider.com/bii-report-why-mobile-video-is-set-to-explode-2012-10#ixzz2AFTSzEss

Gartner's top technology trends for 2013

Personal clouds will also play into the mobility theme for enterprises. Why? Bring your own device will yield to bring your own service as employees bring services like Dropbox to work. "The personal cloud will replace the personal computer," said Cearley.

In other areas, the Internet of things will digitize all businesses. The challenge will be making sense of all the data from image recognition, embedded sensors and other information related by physical objects. Cearley said that by 2015, 70 percent of companies will have one executive in charge of overseeing Internet-connected devices and objects. The payoff will be in the supply chain, control and information services. "The Internet of things has applications across multiple industries," said Cearley.

Cloud computing is a no brainer and Gartner has pitched for years that brokers would emerge to manage services. So far, these predictions haven't panned out completely.

On the big data and analytics front, Cearley noted that there's a difference between "strategic big data" and a flow of information. Among the key items:

• Sensor data will become dominant.
• Hadoop and NoSQL gain momentum.
• Pilots will move to production. 
• The social and mobile graphs will be critical.
• Data warehouses will be revamped into new models. 
• Analytics will be real time courtesy of a man-machine partnership.

These analytics tool will be enabled by mainstream in-memory computing. "In-memory will be in your world across multiple applications," said Cearley. "This will open new opportunities."

Mobility is new form of reality

Mobile phones and tablets are becoming the remote controls of our daily lives. 
Mobile web use is exploding: A majority of U.S. mobile users now access browsers and apps. According to Nielsen, the minutes spent per month on apps more than doubled from March 2011 to March 2012. 
http://znacomstva.blogspot.com/2012/10/mobile-web-use-is-exploding.html

Smartphones are the new digital hub for a growing percentage of consumers, while tablets are starting to rule the personal computing landscape at home and at work.
 Moving forward, new mobile form factors will emerge and wearable computing will gain traction.

 The definition of mobility is likely to evolve, but what’s certain is that increasingly connected devices will enable us to interact with the world around us by leveraging a host of new technologies packaged into smarter devices (QR codes, NFC, image recognition, Bluetooth 4.0, new sensors).

 The physical world will be a catalyst for spontaneous interactions and for commerce via mobile devices.

Economic singularity

An economic bubble of any type, but especially a debt bubble, can be thought of as an incipient black hole. When the bubble collapses in upon itself, it creates its own black hole with an event horizon beyond which all traditional economic modeling breaks down. Any economic theory that does not attempt to transcend the event horizon associated with excessive debt will be incapable of offering a viable solution to an economic crisis. Even worse, it is likely that any proposed solution will make the crisis more severe.

The Minsky Moment

Debt (leverage) can be a very good thing when used properly. For instance, if debt is used to purchase an income-producing asset, whether a new machine tool for a factory or a bridge to increase commerce, then debt can be net-productive.

Hyman Minsky, one of the greatest economists of the last century, saw debt in three forms: hedge, speculative, and Ponzi. Roughly speaking, to Minsky, hedge financing occurred when the profits from purchased assets were used to pay back the loan, speculative finance occurred when profits from the asset simply maintained the debt service and the loan had to be rolled over, and Ponzi finance required the selling of the asset at an ever higher price in order to make a profit.

Minsky maintained that if hedge financing dominated, then the economy might well be an equilibrium-seeking, well-contained system. On the other hand, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy would be what he called a deviation-amplifying system. Thus, Minsky's Financial Instability Hypothesis suggests that over periods of prolonged prosperity, capitalist economies tend to move from a financial structure dominated by (stable) hedge finance to a structure that increasingly emphasizes (unstable) speculative and Ponzi finance.

Minsky proposed theories linking financial market fragility, in the normal life cycle of an economy, with speculative investment bubbles endogenous to financial markets. He claimed that in prosperous times, when corporate cash flow rises beyond what is needed to pay off debt, a speculative euphoria develops; and soon thereafter debts exceed what borrowers can pay off from their incoming revenues, which in turn produces a financial crisis. As the climax of such a speculative borrowing bubble nears, banks and other lenders tighten credit availability, even to companies that can afford loans, and the economy then contracts.

"A fundamental characteristic of our economy," Minsky wrote in 1974, "is that the financial system swings between robustness and fragility and these swings are an integral part of the process that generates business cycles." (Wikipedia)

But a business-cycle recession is a fundamentally different thing than the end of a Debt Supercycle, such as much of Europe is tangling with, Japan will soon face, and the US can only avoid with concerted action in the first part of the next year.

A business-cycle recession can respond to monetary and fiscal policy in a more or less normal fashion; but if you are at the event horizon of a collapsing debt black hole, monetary and fiscal policy will no longer work the way they have in the past or in a manner that the models would predict.

There are two contradictory forces battling in a debt black hole: expanding debt and collapsing growth. Without treading again on ground covered in many past letters, let's take it as a given that if you either cut government spending or raise taxes you are going to reduce GDP over the short run (academic studies suggest the short run is 4-5 quarters). To argue that raising taxes or cutting spending has no immediate effect on the economy flies in the face of mathematical reality. Note that I'm not arguing for one approach or the other, just simply stating that there will be consequences, either way. The country might be better off with higher taxes and/or more spending, or the opposite. But those choices are going to have consequences in both the short and long term.

Second, there is a limit to how much money a government can borrow. That limit clearly varies from country to country, but to suggest there is no limit puts you clearly in the camp of the delusional.

The Event Horizon

In our analogy, the event horizon is relatively easy to pinpoint. It is what Rogoff and Reinhart call the "Bang!" moment, when a country loses the confidence of the bond market. For Russia it came at 12% of debt-to-GDP in 1998. Japan is at 230% of debt-to-GDP and rising, even as its population falls – the Bang! moment approaches. Obviously, Greece had its moment several years ago. Spain lost effective access to the bond market last year, minus European Central Bank intervention. Other countries will follow.

As an aside, it makes no difference how the debt was accumulated. The black holes of debt in Greece and in Argentina had completely different origins from those of Spain or Sweden or Canada (the latter two in the early '90s). The Spanish problem did not originate because of too much government spending; it developed because of a housing bubble of epic proportions. 17% of the working population was employed in the housing industry when it collapsed. Is it any wonder that unemployment is now 25%? If unemployment is 25%, that both raises the cost of government services and reduces revenues by proportionate amounts.

The policy problem is, how do you counteract the negative pull of a black hole of debt before it's too late? How do you muster the "escape velocity" to get back to a growing economy and a falling deficit – or, dare we say, even a surplus to pay down the old debt? How do you reconcile the competing forces of insufficient growth and too much debt?

The problem is not merely one of insufficient spending: the key problem is insufficient income. By definition, income has to come before spending. You can take money from one source and give it to another, but that is not organic growth. We typically think of organic growth as only having to do with individual companies, but I think the concept also applies to countries. The organic growth of a country can come from natural circumstances like energy resources or an equable climate or land conducive to agricultural production, or it can come from developing an educated populace. There are many sources of potential organic growth: energy, tourism, technology, manufacturing, agriculture, trade, banking, etc.

While deficit spending can help bridge a national economy through a recession, normal business growth must eventually take over if the country is to prosper. Keynesian theory prescribed deficit spending during times of business recessions and the accumulation of surpluses during good times, in order to be able to pay down debts that would inevitably accrue down the road. The problem is that the model developed by Keynesian theory begins to break down as we near the event horizon of a black hole of debt.

Facebook Deceivers preparing a new round of mobile revenues trick

While Wall Street has hammered Facebook's stock because of its "mobile problem" - it hasn't been making money on its fast-growing mobile user base - Sandberg calls mobile "a huge opportunity."

And Sandberg revealed that the new mobile app is "boosting engagement" more than the desktop service, saying that mobile users are 20% more likely to come back to Facebook on a given day.

Why it is bullshit?

SEC officer Jacobs wrote on March 22: “Please explain to us how you determined that your metrics are not overstated.”

Only eight days before the IPO, on May 9, did Facebook make clear in a filing that that daily mobile customers were increasing faster than advertising growth, potentially hurting revenue and profits. It was the strongest public signal that the IPO could fall short of its high expectations.

Read Facebook's May 9 amendment here.

The issue of mobile users is even more relevant today as Facebook, based in Menlo Park, California, announced on Oct. 4 it now counted one billion users worldwide, up from 845 million at the year’s start. More than half of them, or 600 million, access Facebook through a mobile device, a number that grew 41 percent this year.

In its initial filing, known as an S-1, the company said mobile usage of Facebook increased around the world and numbered 425 million “monthly active users” in December 2011. It acknowledged that it hadn’t proven it could “monetize” people using only mobile devices, where the absence of ads may “negatively affect our revenue and financial results.”

One concern, raised by several analysts, has to do with the rate at which Facebook will introduce sponsored stories to the newsfeed – both in the web and mobile channels. Right now the volume is low.

‘Excessive Expenses’

Jacobs responded on Feb. 28 by asking for a “more detailed” discussion of these key challenges. If the company’s attempts to monetize those mobile users fail, she wrote, then “ensure” that your disclosure addresses the potential consequences to revenue, “rather than just stating that they ‘may be negatively affected.’”

Vetter filed a revised prospectus on March 7, disclosing that Facebook’s monetization strategy could run up “excessive expenses.” Last year the agency pressed Groupon Inc. (GRPN) to abandon an accounting method that made the then-unprofitable daily coupon business look profitable by hiding certain marketing costs, a person familiar with the matter said at the time.

Her letters were addressed to Ebersman, who joined Facebook as chief financial officer in 2009 after holding the same title at drugmaker Genentech Inc. from 2005 until early 2009. A graduate of Brown University with a degree in economics and international relations, Ebersman replaced Gideon Yu, who left after Facebook said it wanted a successor with experience in running a public company.