(By Rich Bieglmieir) While government officials struggle to find a solution to the sluggish job market, smartphone and tablet makers are creating 100.000s of external jobs.
John B. Horrigan, Ph.D., Vice President at TechNet, told The House Energy & Commerce Committee, "At the end of 2011, the App Economy was responsible for approximately 466,000 jobs."
Elaborating further, he continued, "Some 311,000 jobs are directly supported by mobile apps, with another 155,000 brought about by buying power created by workers developing mobile applications."
The Association for Competitive Technology's (ACT) Executive Director, Morgan Reed told the Subcommittee on Commerce, Manufacturing, and Trade that the number of jobs created is closer to 600,000.
Mr. Reed's testimony illuminated the financial impact apps have, "Just two years ago, total industry revenues were $3.8 billion and expected to rise to $8.3 billion. However, by the end of last [year], we already reached $20 billion and are now projected to reach $100 billion by 2015. This is a meteoric rise for an app economy that didn't even exist four years ago."
Considering that not one person was employed creating apps as recently as 2007, these numbers are mind-blowing. In our view, the most exiting aspect of this story is that 78 percent of the top U.S. app developers are small businesses, according to ACT.
For those who think it's too late, this story is just in the middle innings. In 2012, only 46% of adult Americans had a Smartphone at home.
Perhaps, Scott Stanfield, CEO and Founder of Vertigo Software put it best when he said, "And I can say that we've never experienced such a rush of new work and hiring as we see now. Even in the dot-com boom, we weren't this busy. And it all has to do with the mobile app economy."
For investors, the market is fragmented and is mostly limited to penny stocks, and other internet information providers like Zynga, Inc.
), which is closing in on becoming a penny stock, too.
Glu Mobile, Inc.
) is another in the space, and following ZNGA's earnings debacle, GLUU preannounced and raised guidance. Now, management says 2012, non-GAAP revenues will be $94.4-96.4 million, up from $86.7-91.7 million, and Non-GAAP smartphone revenue for will be from $81.9 million to $83.9 million; however, Glu Mobile is still probably a year or so away from becoming profitable.
While growing pains for companies like Zynga, Inc. (ZNGA) and Glu Mobile, Inc. (GLUU), the unrivaled, industry growth warrants some exposure for your high risk, high reward, investable dollars.