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<ul><li>1.TOP MOBILE INTERNET TRENDS Matt Murphy / Mary Meeker 2/10/11 http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011Copyright 2011. All rights reserved. Duplication or redistribution of this presentation are prohibited without prior written authorization.1</li></ul> <p>2. Mobile Trends Rapid Growth + Disruption1. 2. 3. 4. 5. 6. 7. 8. 9. 10.Mobile Platforms Hit Critical Mass Mobile is Global Social Networking Accelerating Growth of Mobile Time Shifting to Mobile Usage Mobile Advertising Growing Pains But Huge Promise mCommerce Changing Shopping Behavior Emergence of Virtual Goods &amp; In-App Commerce Not All Platforms Are Created Equal Change Will Accelerate, New Players Emerging Rapidly Summary Trends to Watch2 3. MOBILE PLATFORMS HIT CRITICAL MASS 4. iPods Changed the Media IndustryiPhones Ramped Even FasteriPad Growth Leaves its Siblings in the Dust First 3 Quarters Cumulative Unit Shipments, iPod vs. iPhone vs. iPad 16,000 iPadiPhoneiPodGlobal Unit Shipments (000)14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 0123Quarters After Launch Source: Apple.4 5. iTunes Changed the Media IndustryApp Store Growth Leaves it in the Dust Cumulative Number of Downloads, iTunes Music / Video / Movie vs. Apps, First 10 Quarters 10 AppsiTunes# of Downloads (B)86420 01234 5 6 Quarters After Launch78910Source: Apple.5 6. Android has Hit Critical Mass First 9 Quarters Cumulative Android Unit Shipments 80Global Cumulative Unit Shipments (MM)Android Global Units Shipped 70 60 50 40 30 20 10 0 01234 5 Quarters After Launch6789Source: Gartner.6 7. Smartphone + Tablet &gt; PC Shipments Since CQ4:10 Global Unit Shipments of Desktop PCs + Notebook PCs vs. Smartphones + Tablets, 2005-2013E 700,000CQ4:10: Inflection Point Smartphones + Tablets &gt; Total PCsGlobal Unit Shipments (MM)600,000500,000400,000300,000200,000100,0000 2005 Desktop PCs200620072008Notebook PCs20092010Smartphones2011E2012E2013ETabletsNote: Notebook PCs include Netbooks. Source: Katy Huberty, Ehud Gelblum, Morgan Stanley Research. Data and Estimates as of 2/117 8. MOBILE IS GLOBAL 9. 5 Countries = 46% of Internet Users China, USA, Russia, Brazil, India 2009 1.8B Global Internet Users, +13% Y/Y(1); 18.8T Minutes Spent, +21% Y/Y(2)Russia 60MM users; +31% Y/Y 42% penetration* USA 240MM users, +4% Y/Y 76% penetration*Brazil 76MM users, +17% Y/Y 39% penetration*China 384MM users; +29% Y/Y 29% penetration*India 61MM users; +18% Y/Y 5% penetration*Note: *Penetration is per 100 inhabitants. Source: 1) Internet user stats per International Telecommunications Union; pertime spent data per comScore global 12/09. time spent data per comScore global 12/09. Source: 1) Internet user stats 2) International Telecommunications Union; 2)9 10. 35% Y/Y Global Mobile 3G Subscriber Growth to ~726MM, CQ3Rank Country 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15USA Japan Korea Italy UK Germany Spain Poland Indonesia France China Brazil Australia Canada RussiaCQ3:10 3G 3G Sub 3G Subs PenetraY/Y (MM) tion Growth 141 109 40 34 31 28 27 23 21 21 20 19 18 12 12Global 3G Stats:47% 95 79 40 41 28 48 50 11 33 2 10 66 50 527% 12 12 21 32 28 21 35 54 30 458 177 29 147 67Subscribers = ~726MMRank 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30Country Taiwan Malaysia Saudi Arabia Sweden South Africa Turkey Netherlands Philippines Portugal Austria Israel Vietnam Singapore Egypt GreecePenetration = 14%CQ3:10 3G 3G Sub 3G Subs PenetraY/Y (MM) tion Growth 11 9 8 7 7 6 6 6 6 6 5 5 4 4 442% 26 18 57 15 10 32 7 35 46 52 4 59 7 2640% 23 50 43 36 160 27 98 8 30 18 707 48 34 28Growth = 35%Note: *Informa reports a lower global 3G subscription # vs. Ovum due to the exclusion of 4G and the use of different sources. 3G includes CDMA 1x EV-DO and Rev. A/B, WCDMA, HSPA; Source: Informa WCIS+.10 11. SOCIAL NETWORKING ACCELERATING GROWTH OF MOBILE 12. Different Types of Platforms = Facebook + Apple + GoogleiPhone/iTouch/iPad662MM users +41% Y/Y130MM+ users +103% Y/Y550K+ apps 500MM+ downloads350K+ apps 10B+ downloadsSOCIALMOBILE*SEARCH972MM users +8% Y/Y CQ4: CPCs +4% Q/Q paid clicks +18% Y/YSource: Company data, comScore global 12/10. *Google Android momentum especially strong too.12 13. Emerging Types of Social NetworksMore to ComeINFORMATION SHARING253MM unique visitors +85% Y/Y130MM+ monthly active users +15% Y/YGAMING51MM subscribers +25x Y/YSource: Groupon, Twitter, Zynga.COMMERCE 13 14. Zynga Proves that Great New Social Products for Old Users Can Ramp Extremely Quickly Daily Active Users, FarmVille vs. CityVille, First 60 Days Since Product Launch20 Daily Active Users (MM)FarmVilleCityVille16 12 8 4 16111621 26 31 36 41 Days After Launch465156Source: Zynga. Note that FarmVille launched in 6/09, CityVille launched in 12/10.14 15. Real-Time Social Features Accelerating Mobile Usage Growth - Sharing + Location + Friending...Location Sharing FourSquareWhrrlCommunication TwitterTextPlusTextFreeMusic Sharing ShazamSpotifyFB Connect for Mobile Built in Friend Connectivity, Share, Virality Invite FriendsShareFeed15 16. KPCBs John Doerr Calls It SoLoMoSo Lo Mo SocialLocalMobile16 17. TIME SHIFTING TO MOBILE USAGE 17 18. Japan Social Networking Trends Show Importance of Mobile Mixi Mobile Page Views = 85% vs. 14% 4.5 Years AgoMonthly Page Views (MM)Mixis (Japans Leading Social Network) Monthly Page Views, Mobile vs. PC, CQ2:06-CQ4:10 Mobile Page Views Desktop Page Views30,00085%25,000CQ3:09 Platform opened to 3rd-party developers20,000 15,000 10,000 14% 5,000 86%15%0 2Q064Q062Q074Q072Q084Q082Q094Q092Q104Q10Note: Mixi is one of Japans leading social networking sites on PC and mobile with 20MM registered users as of 12/31/10. It monetizes mobile usage via sales of avatars, customized homepages and other premium services. Source: Company reports, Naoshi Nema, Morgan Stanley Research18 19. 60% of Time Spent on Smartphones is New Activity for Mobile Users Average Time Spent on Various Mobile Functions, 1/11 10 minutes (12%) Web/Web AppsNEW ACTIVITY40 minutes (47%) All Other Maps Games Social Networking Utilities More27 minutes (32%) Telephony Phone Skype Messages7 minutes (9%) Mail App Source: AppsFire, 1/11. Note that Android users show a higher % browsing activity.19 20. Total Mobile Data Traffic (Tetabyte per month)Global Mobile Data Traffic Should Grow 26x Over Next 5 Years ,Global Mobile Data Traffic, by Type 2008 2015E,2010-2015E CAGR Total92%22%M2M*109%6%Data80%File Sharing62%Video104%VoIP42%5%6,000,000 5,000,000 4,000,000 3,000,00066%2,000,000 1,000,000 0 2008200920102011E 2012E 2013E 2014E 2015ESource: Cisco Visual Networking Index (VNI) Global Data Traffic Forecast, 2010-201520 21. Strong Mobile Trends for Leading Social Companies200MM mobile active users vs. 50M in 9/09 2x more active than desktop-only usersMobile = 50% of total active users, vs. 25% Y/Y Mobile = 40% of all tweetsIntroduction of mobile product drove 2x conversion ratio from free to paying subscribers Mobile users = 25-30% total users in mature markets100MM mobile users vs. 50MM Y/YAdding 3MM users per month 50% of all users subscribe on mobile 21 22. MOBILE ADVERTISING GROWING PAINS BUT HUGE PROMISE 23. So Far, Difficult to Build Consistent Mobile Ad Revenue Owing to Lumpy Buys, Need for More Premium Advertisers2010 Mobile eCPMs for 4 KPCB Portfolio Companies $ 4 3 A B C D2 1 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: KPCB Companies23 24. Yet the Efficacy of Mobile Ads vs. Other Media is Compelling Relative Efficacy of Mobile vs. Other Advertising Media, 1/11 ReachTargetingEngagementViralTransactionMobile10090708080Internet5050804060TV503090Print401 0Radio601 0Outdoor201 020401 0201 01 01 01 0Source: Chetan Sharma, January 2011 24 25. Media Time Spent vs. Ad Spend Still Out of Whack Internet/Mobile (upside) vs. Newspaper/Magazine/TV (downside)% of Time Spent in Media vs. % of Advertising Spending, USA 2009% of Total Media Consumption Time or Advertising SpendingTime SpentAd Spend50% 40% 39% 30%31% 26%20% 10%Global Opportunity16% 12%~$50B28%13% 9%0% PrintRadioTVInternetNote: Time spent data per NA Technographics (2009), ad spend data per VSS, Internet advertising opportunity assumes online ad spend share matches time spent share, per Yahoo!. Source: Yahoo! Investor Day, 5/10.25 25 26. Advertising $s Follow Eyeballs Ad Revenue per User = $46 in 2009E vs. $0 in 1994E1995E2009E$55MM$54BAd Revenue per User$9$46Global Internet Users6MM1.2BGlobal Internet Ad RevenueSource: Global online ad revenue per Juniper Communications (1995), ZenithOptimedia (2009). Internet users per Morgan Stanley estimate (1995) and comScore (2009). We note that comScore reports a lower global Internet user # than International Telecommunications Union. Morgan Stanley Research.26 26 27. Google Paid Clicks &amp; Cost-Per-Click Continue to AccelerateMobile Search as a Key Driver?CQ4:09CQ1:10CQ2:10CQ3:10CQ4:10$6,465$6,475$6,562$7,032$8,167Y/Y Growth17%21%23%22%26%Q/Q Growth12%0%1%7%16%12,40112,90912,65113,15714,669Y/Y Growth13%15%15%16%18%Q/Q Growth9%4%-2%4%11%$0.52$0.50$0.52$0.53$0.56Y/Y Growth4%6%7%6%7%Q/Q Growth3%(4%)3%3%4%Gross Advertising Revenue ($MM)Aggregate Paid Clicks (MM)Cost per Click (CPC - $)27 28. New &amp; More Powerful Ad Units are Rolling Out Quickly in MobileDisney Super Bowl Sunday takeover campaign -- All pages of textPlus, February 7, 201028 29. And Many Brands are Testing29 30. Branded Virtual Goods &amp; Sponsorships are Impactful InterstitialCall to action click to mobile site, app, call, location, add to calendar, and moreSource: Booyah and Shazam.30 31. Smartphones Can Make TV Interactive TV Action Via Mobile: -Get coupons / offers-Learn more about products-Share content with friends31 32. M-COMMERCE CHANGING SHOPPING BEHAVIOR 32 33. Online Commerce Gaining Share vs. Offline Online at ~5% of USA Retail, Mobile Should Get to Same Level Much FasterUSA eCommerce % Share(1) of Total Retail Sales, CQ3:00-CQ4:12EeCommerce as % of Total Retail Sales7%eCommerce Penetration 4% in CQ2:106% 5% 4%Mobile eCommerce Penetration?3% 2% 1%0% Q3:00 Q3:01 Q3:02 Q3:03 Q3:04 Q3:05 Q3:06 Q3:07 Q3:08 Q3:09 Q3:10 Q3:11 Q3:12 eCommerce PenetrationLinear Trendline (y=0.094x + 0.9895, R^2=0.9599)Note: (1) Adjusted for eBay by adding back eBay US gross merchandise volume; Source: US Dept. of Commerce (CQ2:10), Morgan Stanley Research.33 34. Mobile Revolutionizing Commerce With Constant Product Improvements Location-Based Services Enable real-time physical retail / service opportunities Transparent Pricing Instant local + online price comparison could disrupt retailers Discounted Offers Deep discounts drive foot traffic to local retailers Immediate Gratification OTA (over-the-air) instant digital product + content delivery Location-Based Services Shopkick iPhone App Finds deals and offers in your areaTransparent Pricing ShopSavvy Android App Comparison shopping among online + local storesDiscounted Offers Groupon iPhone App Local Services Up to 90% OffImmediate Gratification iTunes Store on iPhone Music / video / apps delivered wirelesslySource: Company Reports, Morgan Stanley Research.34 35. Mobile Shopping Apps - Changing Behavior + Driving Revenue &amp; ROI For Retail Partners Shopkicks Daily Walk-Ins to Retail Partners, 11/15/10 12/6/10# of Daily Walk-InsMore shopkick walk-ins to a retail partner on Cyber Monday due to the 3x kickbucks promotion than on Black Friday11/153X Cyber MondayBlack Friday These types of experiments have been repeated a dozen times at 5 different retailers: every time, 50-100% increase in foot traffic11/1811/2111/2411/2711/3012/312/6Source: Shopkick. Note Shopkick has 750K users in five months since launch.35 36. Mobile Devices + Services Driving New Ways to ShopMobile is clearly becoming a new way people shop[eBay has] nearly tripled mobile GMV (gross merchandise value) year-over-year to nearly $2 billion, with strong holiday shopping momentum in Q4. In 2011, we expect Mobile GMV to double to $4 billion. -John Donahoe, President &amp; CEO, eBay CQ4:10 Earnings Call36 37. EMERGENCE OF VIRTUAL GOODS &amp; IN-APP COMMERCE 38. Virtual Goods = $2B Market in USA U.S. Virtual Goods Revenue, 2008 2011EU.S. Virtual Goods Revenue ($MM)$2,500$2,000$1,500$1,000$500$0 2008200920102011Source: Inside Virtual Goods: The US Virtual Goods Market 2010-2011. 38 39. What Are Virtual Goods Anyway?Average Monthly Revenue per UserAverage # of Transactions &amp; Annual Dollar Spent by Virtual Goods, 9/09 $60 # of Transactions$50$50Gross Dollars Spent$40 $30$30$20$20 $10$20$20 $12755555$11 5$0Source: Playspan survey of 1736 respondents in 9/09. 39 40. Monetization Shift From Paid Downloads To Virtual Goods Has Been Profound For Many Developers Average Daily Revenue for a KPCB Portfolio Company Virtual Goods Introduction Drove 5x Revenue IncreaseSource: KP Portfolio Company 40 41. Powerful Shift to Ad &amp; Virtual Good Monetization from Initial Pay per Download ModelsRevenue Composition for Pinger a KPCB Portfolio Company 12/2009 5%12/2010 Paid Downloads Advertising30%35% 63%64% Affiliate 2% Virtual GoodsSource: Pinger. 41 42. Gaming Elements = Key to Success For Many Mobile / Social ApplicationsGamification of apps is the ultimate way to engage a new generation of audiences.Bing Gordon, KPCB Partner, AIAS* Hall-of-FamerNote: *AIAS is the Academy of Interactive Arts &amp; Sciences.42 43. NOT ALL PLATFORMS ARE CREATED EQUAL 44. Global Smartphones Huge Android + iPhone GrowthGlobal Smartphone Market Share - Q4:10 vs. Q4:09OS vendorTotalQ4 2010 shipments (M)% shareQ4 2009 shipments (M)% shareGrowth Q410/Q409101100%54100%89%Google*3333%59%615%Nokia3131%2444%30%Apple1616%916%86%RIM1514%1120%36%Microsoft33%47%-20%Others33%23%65%*Note: The Google numbers in this table relate to Android, as well as the OMS and Taps platform variants. Source: Canalys estimates, Canalys 201144 45. Differences in Platform Engagement Internet + App Usage Massively Higher on Android + iOSInstalled Base (MM)1,20020 171,000168001112600 4008 45200 50% population in developed markets will have Smartphone SoLoMo Social / local / mobile converging Gamification Ultimate way to engage a new generation of audiences Empowerment impact of empowering billions of people around the world with real-time connected devices has just begun...It's going to be a fascinating decade 54 55. Big Changes AheadWere at the beginning of a new era for social Internet innovators who are re-imagining and reinventing a Web of people and places, looking beyond documents and websites. -John Doerr, Partner, KPCB55 56. Contacts, PresentationMatt MurphyMary Meekermmurphy@kpcb.commmeeker@kpcb.comtwitter: @mmurph http://www.kpcb.com/team/index.php?Matt Murphyhttp://www.kpcb.com/team/index.php?Mary Meekerhttp://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-201156 </p>