It's all about the apps this year

Success in mobility will be all about software, says Victor Basta

Announcements and earnings reports so far suggest a clear direction for changes in the industry this year.

First of all, many industry commentators are wrong – and are stuck in a pre-1981, pre-Microsoft hardware mindset. The mobile industry is no longer about the device.

The past few years have been about perfecting the mobile device. Smartphones are now derivative, innovation has already happened, and Apple's share price has suffered, partly because of this.

In 2013, all important mobile innovation will be software-based. And the real value created will be in monetising fickle mobile users.

Facebook, Apple, Amazon and Samsung will flourish or wilt based on their ability to produce great software, not great devices.

This situation has precedents. Legend has it that a power tool company in the 1980s under pressure from new market entrants asked itself a fundamental question: whether it sells drills or holes.

This is exactly what Apple and others must ask themselves. The devices are secondary, it's their purpose that is absolute.

Most industry commentators have been locked into an outdated, hardware-centric view of the world, shades of pre-August 1981 when IBM installed MS DOS 1.0. This is antediluvian, and they are wrong.

However, this will be Facebook's year, even though the IPO was a disaster. Facebook has since "gotten religion" and upped its pace of mobile innovation.

The Graph Search announcement represented a huge opportunity for the company to transform itself over the next three to five years. Graph Search will have a dramatic and positive impact on advertising revenue over time, especially on mobile.

This year, we predict, Facebook's share price will climb above $38 (£24) for the first time since the IPO as analysts and investors form a better understanding of the huge commercial potential of Graph Search.

Amazon is coming on quietly but incredibly quickly in the mobile ecosystem. This company has incredible assets, including a huge credit card-enabled user base which only Apple can match, and a proven ability to innovate with low-cost mass-market devices such as the Kindle.

Amazon also has the software sophistication to set the global standard for online retail customer engagement, still unmatched by many lesser sites. And Amazon can scale, across any market it enters.

The rapid uptake of its low-cost, wireless and mobile-enabled Kindle underpin our prediction that Amazon will be the next emerging force in the mobile ecosystem. We will start to see this in 2013.

BlackBerry 10 isn't a year late. it's seven years too late. The business will eventually be pureed by the competition.

BlackBerry's launch of BB10 was neatly choreographed and the reviews were largely positive. BlackBerry's problem, though, is that the launch was too little, too late.

The business recorded its first-ever fall in subscribers in the final quarter of last year. BB10 will deliver a resurgence, but this will be temporary.

BlackBerry has been too hardware-focused for too long and its market will be eaten by others. Its trump cards, enterprise integration and BBM, are being picked off by Microsoft and What's App respectively.

This year, tech IPO intention announcements will become a major lure for M&A stalking horses. Several emboldened European next-generation businesses will announce their intention to list in the US this year.

Most of these businesses have no need for the capital injection that a listing would deliver. Most next-generation businesses are lean and have relatively little in the way of burdensome infrastructure or the relatively bloated headcounts that technology businesses had in the 80s and 90s.

IPO intentions will increasingly be a ruse intended to smoke out potential buyers.

This year we will of course see major innovation out of developing markets. For the most part, they are no longer developing – they are here.

The heterogeneous customer base in these markets will make it considerably easier for innovators to build a large, profitable user base. We expect the convention, which is that western technologies seep into developing markets, to reverse in a major way.

One major example is redefining smartphones: we will see sub-$100 smartphones in greater volume out of China and other markets, which will redefine what a smartphone is all around the world.

Social media settler Ad Tech has marked out its territory. Now it's time to monetise it. Applying technology to performance advertising has been coming for years.

This year will see Ad Tech on many if not all platforms and geographies. In particular agencies will work out how to monetise performance advertising across platforms to a much greater degree.

Victor Basta is managing director of Magister Advisors