There are now high speed internet, unix powered, quad-core pocket computers in the hands of billions. You can't understand the implications of that and think there's a bubble by any meaningful definition.
There should probably be 10000x more companies than there are. The 1+ million mobile apps that exist hint at the true scale.
Things can be overpriced (and therefore in a bubble), while still adding value. The people saying we're in a bubble aren't claiming that the companies affected by the bubble are bad companies. They're saying that the price required to buy into them isn't commensurate with the future revenue those companies will generate.
Think about it this way. Wikipedia adds a tremendous amount of value to the world, but it can't capture any of that value, since people don't really want to pay for it, so if in some hypothetical world you could buy equity in Wikipedia valuing Wikipedia at say, $10b, then Wikipedia would be overvalued, even though it may in fact have generated many times more than $10b of value.
Of course, you could argue that if Wikipedia were for profit it would be able to find some way to capture that value. In effect, this is where the disagreement arises between those who say there is no bubble and those who say there is.
Quad-core devices are probably in the 100s of millions for now, not billions, but I agree with the rest. :)
(Globally speaking, the most common type of smartphone today is probably a one-core 0.6-0.8 GHz Android device running Android 2.x. With a crappy 320x480 TN display and not nearly enough RAM.)
There were billions of internet-connected devices in peoples' hands in 1999 too. They were called personal computers. I'm not sure how being "unix powered, quad-core" turns devices into magical bubble protection.
Of course in the long term proliferation of communications technology will result in big changes, but that's a generational cycle, not a quarterly one. The market can (and probably will) boom and bust many times while that broader trend works itself out.
We had Internet "everywhere" in 2000, all these new doors were being opened! And yet we crashed. The investment has to remain in step with the economic returns, or else eventually a crash happens. The possibilities are one thing, the returns are something else.
Of course there are a lot more viable online/mobile businesses now than there were in 2000, so a bubble has that much more space to grow before crashing.
There should probably be 10000x more companies than there are. The 1+ million mobile apps that exist hint at the true scale.