What does this mean? It means Google is rolling out new algorithms that change rank for (and that means penalize or downrank) sites that aren't optimized for mobile.
If your site isn't mobile-friendly, you need to get it ready for smartphone users as soon as possible, to avoid losing hard-won web capitol. (And, of course, to access the millions of smartphone users you want to do business with!)
The message about rolling out ranking changes is embedded in a helpful post on the Google Webmaster Central Blog, home of "Official News on Crawling and Indexing Sites for the Google Index". So it's not an ill-founded rumor being spread by SEO companies or Red Bull-crazed tech bloggers.
The post itself covers "common configuration mistakes" and Google's recommendations. In other words, it lays out how Google wants you to set your site up for smartphone users. Google wants everyone who searches for anything on Google to have a "positive user experience".
So they're not going pull up sites that render for mobile with janky 404 pages or faulty redirects in the first page of mobile search results- they're going to downrank those sites.
The new algorithm, when it's released, will apparently also penalize your Flash videos.
Flash, why must you continue to walk the earth like a zombie dinosaur? Google wants you to go away, even though they used to be your friend. Go find a tar pit, Flash.
Getting your site responsive, i.e. smartphone-optimized and multiple-device friendly, means rebuilding your site.
But now, Google is making sure you can't afford not to do it.
To visualize the payoff, consider the fact that most people sleep with their phones within arms' reach these days. You can reach potential customers 24-7 with a mobile-friendly site. Don't you want your site to be the one they can use at the breakfast table? (Does anyone sit at the breakfast table anymore? Don't people just spray food in the general direction of their faces between gulps of Venti lattes?)
Seriously, people are miserable and completely cracked out with Present Shock these days. If they need an answer, they need it really, really fast, and the site that delivers it to where they are, when they want it, wins.
From the Google webmaster blog post comments, a link to some free tools that analyze your site's mobile performance- find out where you stand, and get ready to adapt.