As we approach the end of the year, it seems as good a time as any to take stock of the current state of the mobile phone software market, and where we're heading in 2005 beyond. Today, the total annual market for mobile phone software stands at around $1B per year; and high-quality venture capital groups such as Apax continue to make major investments in developers and publishers of mobile phone software. For example, Digital Bridges based in London, UK, successfully closed their $18M third round in November this year - they're doing a fabulous job in the mobile games space. It's great to see mobile phone software companies competing so successfully for capital - that's a real testament to the potential of our industry. In case you don't undersand the investment rationales of medium and large venture capital groups in start-up software companies (mobile or otherwise), a successful exit requires that a portfolio company achieve a valuation in the low hundreds of millions of dollars.

Over the next five years, then, many people believe that the market for mobile phone software will grow to around $8B per year, with the fastest growing segment being mobile entertainment software. And I'm confident that the overall market will be much bigger than this, with many analysts massively underestimating what mobile phones are going to do in the Enterprise... but mobile phones and the Enterprise is a subject for another day.

I can't tell you, yet, what our plans are in the mobile entertainment space, but I can say I'm pretty excited about them! We've known exactly where we are going in mobile entertainment software for the last couple of years, and have been biding our time for the market to move in our direction, which it is now. So... roll on 2005... it's going to be an exciting year!