Investment in mobile businesses and strategies has been riding high this year, but will the good times continue if there is another recession ? something that is beginning to look like a real possibility?

Venture capital and private equity firms, as well as brands and technology companies are witnessing the growth in mobile and betting on the channel?s long-term potential by investing. While a dip in consumer confidence and the recent stock market turbulence among other factors suggest another recession may be coming, the news may not be so bad for the mobile space and could even be good.

?While the consumer sector continues to demonstrate real restraint in spending, demand for mobile connected devices and services remains substantial and is a real bright spot of the economy,? said Colin R. Knudsen, managing director at investment bank Coady Diemar Partners, New York.

?Also, corporate balance sheets are very healthy and investment in new technologies, products and services for mobile will continue to satisfy consumer demand,? he said.

?A double dip recession definitely has the potential to dampen mobile investment for a period but the consumption trends are compelling and investment will continue.?

Strong investment
Investment in mobile has been on an upward trend for the past 12 months or so. This includes investment in the hardware and software sides of the sector.

According to investment bank Rutberg & Co., venture capital firms invested $3 billion in mobile during the first half of 2011, representing 42 percent of overall technology investment. Investment levels have grown substantially since 2009, when the investment for the entire year was approximately $2 billion.

Some of the bigger areas of investment include mobile payments, social networks, mobile games, video and mobile marketing.

Additionally, there has been investment in developing countries where access to landlines is limited, with mobile providing a way for the population in these areas to access the Internet.

The excitement around mobile has resulted in some fairly substantial deals being made this year, including mobile payments company Square?s $100 million round of financing and the$70 million that headset manufacturer Jawbone raised.

There have been some fairly significant strategic deals as well.

For example, mobile payments firm Payfone recently partnered with American Express and Verizon Wireless.

?Venture capital in mobile is incredibly strong,? said Rajeev Chand, head of research at Rutberg & Co., San Francisco. ?The available equity for mobile startups that have traction is tremendous.

?We?re doubtful that the potential for a downturn in the economy will have an impact on venture capital,? he said. ?The fundamental growth drivers in mobile continue to be there.?

The smartphone factor
One of the factors driving the investment to date is the growing penetration of smartphones.
Companies are also watching the success that others have had here, including AdMob, Ngmoco and Paypal and looking for ways to replicate it.

?If you fundamentally believe in the macro trends that people are using mobile phones more and more and that phones are getting cheaper, then the adoption rate will continue to go up and you will need the investment in commerce and other services that go through this channel,? said Michael Guptan, managing director and leader of Internet and Technology investment banking Duff & Phelps, New York.

There is even the possibility that the economic uncertainty could drive further mobile adoption, which would only boost mobile?s attractiveness as an investment.

Many consumers reacted to the last downturn by reigning in spending and increasing their efforts to find coupons and deals. Another downturn could cause consumers to redouble their cost-saving activities.

?As the economic conditions get more uncertain, people will become more price sensitive and will want deals sent through their mobile phones,? Mr. Guptan said. ?We should see a greater adoption of mobile apps as a result and higher levels of commerce through phones as a result.?

Companies will continue to invest in mobile as consumers continue to gravitate towards the space.

?There is a set of people who are much more comfortable transacting on the phone rather than the Internet and everybody is racing to capture that demo and those dollars,? Mr. Guptan said. ?Everything is in place for this to continue.?

There are also competitive reasons why companies will want to continue to invest in mobile.

?As people move to do more ecommerce via mobile, retailers are incented to make that investment,? Mr. Guptan said. ?If they don?t do that, competitively they won?t be relevant.?

Interest rates help
Some broader developments as the government looks for ways to give the economy a boost could also be a factor.

For example, the Federal Reserve?s recent announcement on interest rates could support investment levels.

?I believe that the Feds commitment to keep interest rates at current levels for two years should result in more M&A activity, so I think that mobile investment and M&A activity in the mobile sector will continue to be robust,? Coady Diemar?s Mr. Colin said.

However, the uncertainty in the economy does have the potential to impact some areas of mobile.

?I?ve been hearing conversations that the IPO window may narrow because of this volatility,? Rutberg & Co.?s Mr. Chand said.

Overall, the growth in mobile and its success to date may be strong enough to overcome the uncertainty in the marketplace.

?We?ve hit an inflection point where mobile is here to stay,? Mr. Guptan said. ?It has become integrated within the strategy of retailers, infrastructure providers and financial services providers plus there is a pull from consumers for mobile solutions.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York