Noro Moseley Partners, Mike Elliott - VC Predictions 2007

The Year of Apple; Investment Opportunities Emerge Around Search and Filtering Tools Allowing Users to Cut Through Massive Amounts of "Garbage" on the Net

(note: this is the first in a series of four VC predictions for 2007)

By Mike Elliott, Noro-MoseleyPartners

1. 2007 will be the year of Apple. Steady growth in the Mac's market share, especially in the all important entrepreneurial tech community, coupled with the introduction of the iPhone in Q1 and iTV for home entertainment later in the year (both of which will no doubt have a loyal Apple user following), should point to a very strong year for Apple. Look for Apple to be in the videogame console market by year-end as well.

2. The official rollout of WiMAX, scheduled to occur in late 2007, will be delayed again.

3. Security concerns will continue to occupy mindshare for enterprise CIO's. Even the smallest, most nimble technology firms will need to invest considerable time and energy, documenting and maintaining security standards and policies simply to be in position to qualify as a potential vendor for larger enterprises.

4. User generated content will continue to proliferate wildly, creating investment opportunities around search and filtering tools that will allow users to cut through the massive amounts of "garbage" now clogging the net. (Sphere, for example, is an interesting new company providing highly filtered search capability for blogs.) Focused, edited and monitored Web 2.0 communities will rise rapidly with the aid of tools developed by a host of companies, such as Vox and Ning, providing users all the functionality needed to develop niche sites with capabilities similar to YouTube, MySpace, Flickr, etc. - but in tightly controlled communities.

5. Vista's built in desktop "lock-down" feature for corporate CIO's may result in an unexpected boost in PC sales in late '07 and early '08 as users will be unable to customize corporate PCs and will need to buy computers for home and personal applications.

6. On the healthcare front, significant new growth in new and novel healthcare delivery services companies will be limited as investors and entrepreneurs take a conservative stance while waiting to see what the recent and upcoming elections might portend for reimbursement.

Comments

[Brad Hessel]

I too like Apple's positioning, but I wouldn't be buying any AAPL until Steve Jobs' exposure level to the options backdating brouhaha is clarified. If he is forced out, the stock could drop 30%+, imo.