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thinkLA Mobile Breakfast 2014 - Henry Blodget Presentation

This document discusses the rise of mobile devices and their impact on digital trends. Some key points: - Mobile devices like smartphones and tablets now greatly outnumber PCs and are driving growth in connected devices. - Popular communication apps like WhatsApp, WeChat and Snapchat are seeing massive adoption rates, surpassing text messaging usage. - Mobile media consumption and online activities like photo sharing are also growing rapidly as people spend more time on their phones. - Many industries like retail, transportation, payments and advertising now rely heavily on mobile users, who account for over 20% of online traffic and an increasing share of sales and revenues. - Mobile has extended people's digital time and changed consumption patterns, with smartphones

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The Future Of Mobile Henry Blodget BI Intelligence
PCs are now small share of connected devices… Personal Computers Smartphones Tablets Smart TVs Wearables 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Units Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates Global Internet Connected Device Shipments
Almost 1 billion smartphones shipped in 2013 Samsung Apple Huawei LG Lenovo Sony Ericsson ZTE Nokia Windows Phone BlackBerry HTC Motorola Other 0 25,000,000 50,000,000 75,000,000 100,000,000 125,000,000 150,000,000 175,000,000 200,000,000 225,000,000 250,000,000 275,000,000 300,000,000 325,000,000 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 UnitsShipped Global Smartphone Shipments By Manufacturer Source: BI Intelligence Es mates
Tablets cannibalizing PCs… PCs Tablets 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 (thousands) Source: Gartner, IDC, Strategy Analy cs company releases Global Computer Shipments
“Phablets” filling in the gap… Laptop Tablet Phablet 0 3 6 9 12 15 18 21 24 27 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 MillionsOfUnitsShipped Source: Interna onal Data Corpora on August 2013 "Asia" excludes Japan and includes Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam. Demand For Phablets Is Skyrocke ng In Asia
$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Millions) Source: BI Intelligence es mates, ABI Research, IMS, Juniper, *Assumes 42$ average selling price for wearable devices Wearable Device Market Size Forecast Wearables beginning to take off…
In-vehicle services Hardware Telema cs service providers Telecom service providers € 0 € 5,000 € 10,000 € 15,000 € 20,000 € 25,000 € 30,000 € 35,000 € 40,000 € 45,000 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E (millions) Source: SBD, GSMA Connected Car Revenue Forecast Cars increasingly connected
PC vendors, meanwhile, are getting smoked Lenovo HP Dell Acer Other 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 (thousands) Source: Gartner, IDC, BI Intelligence Es mates Global PC Shipments By Manufacturer iPad released Windows 8 released
Mobile is creating big challenges and opportunities.
We spend 1 hour a day on our smartphones Other 10% Visit Websites 15% Games 9% Social Networking 17% Talk 28% Text 21% Breakdown Of The Average Smartphone Owner's Daily Time-Spend On Average, U.S. Smartphone Owners Spend 58 Minutes Daily On Their Phones Source: Experian Marke ng Services, May 2013
43 39 30 17 0 5 10 15 20 25 30 35 40 45 50 TV PC/Laptop Tablet Smartphone Minutes Source: Google, August 2012 Average Minutes Spent Per Interac on By Device We spend ½ hour on tablet each time we use it
Mobile is the only media time that is growing 45%$ 25%$ 17%$ 9%$ 7%$ 4%$ 44%$ 26%$ 16%$ 8%$ 8%$ 6%$ 43%$ 26%$ 15%$ 7%$ 7%$ 9%$ 42%$ 26%$ 14%$ 6%$ 5%$ 12%$ 38%$ 20%$ 12%$ 4%$ 5%$ 20%$ 0%$ 5%$ 10%$ 15%$ 20%$ 25%$ 30%$ 35%$ 40%$ 45%$ 50%$ TV$ Online$ Radio$ Print$ Other$ Mobile$ Source:(eMarketer,(August(2013( U.S.$Consumer$Media$Consump2on$Share$ 2009$ 2010$ 2011$ 2012$ 2013$
Mobile is enabling new forms of entertainment, communication, media, and commerce.
Staggering growth for new communication apps… Instagram WhatsApp Snapchat 0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 TotalUserBaseSize Source: News Reports, Company Lis ngs, ComScore, BII Es mates Total User Base
450 million WhatsApp users, +1 million a day 8 10 11 16 19 200 Ac ver Users 450 0 50 100 150 200 250 300 350 400 450 500 0 5 10 15 20 25 Apr-13 Jun-13 Aug-13 Dec-13 Feb-14 NumberOfAcveUsers(Millions) NumberOfDailyMessages(Billions) Source: WhatsApp, News Reports, BII Es mates WhatsApp Growth Messages Sent Ac ver Users
Similar growth for WeChat and Line… 0 50 100 150 200 250 300 350 400 450 500 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Millions Source: BI Intelligence Es mates WhatsApp, WeChat, LINE, Viber Monthly Ac ve Users (Global) WhatsApp WeChat LINE Viber
Usage of these apps has blown past “texting” 16.2 19.5 4.4 41.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 2011 2012 2013 BillionsOfMessagesPerDay Source: Informa, April 2013 OTT Surpasses SMS SMS OTT
~1 billion pictures shared each day Facebook, 43% Snapchat, 49% Instagram, 7% Flickr, 1% Top Photo Sharing Sites, November 2013 Daily Photo Uploads Among Top 4 Sites (809 Million Photos) Source: BI Intelligence
~500 million Snapchat pictures a day 0 50 100 150 200 250 300 350 400 450 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 DailyPhotoSharesInMillions Source: Snapchat, TechCrunch September 2013, CNET June 2013, KPCG May 2013 Snapchat's Daily Photo Shares Are Soaring
Over 1/5th of Internet traffic is now from mobile 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Source: StatCounter, December 2013 Global Internet Traffic Desktop Vs. Mobile
Mobile video is booming… 0 1 2 3 4 5 6 7 8 2011 2012 2013 2014 2015 2016 2017 MillionsofTerabytesPerMonth Source: Cisco, 2013 Global Mobile Video Traffic Will Con nue To Surge
Pandora 85% Facebook 65% Twi er 80% 0% 25% 50% 75% 100% 2008 2009 2010 2011 2012 2013E %ofTrafficfromMobile Source: Mary Meeker, Kleiner Perkins, companies, BII es mates Mobile Usage: Pandora, Twi er, Facebook Social and music are now mostly mobile
Mobile is driving all of Facebook’s revenue growth Total Ad Revenue Mobile Ad Revenue $ 0 $ 500 $ 1,000 $ 1,500 $ 2,000 $ 2,500 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Millions Source: Facebook Facebook Ad Revenues
Mobile is now ~25% of e-commerce traffic… PC Tablet Smartphone 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: Monetate Ecommerce Website Traffic By Device
(But only 13% of e-commerce sales) Desktop E-Commerce Sales Mobile $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13E ($millions) Source: BI Intelligence, comScore, Federal Reserve Economic Data--St. Louis Fed U.S. E-Commerce Retail Sales
0 20 40 60 80 100 120 140 160 Am azon eBay W al-M art Apple Target BestBuy The Hom e Depot Ticketm aster Etsy Low es (Millions) Source: comScore Leading Retailers' Digital Audience Popula on By Device Desktop Only Desktop + Mobile Mobile Only Retailers are seeing huge mobile audience gains …
PayPal powers $30 billion in mobile transactions PayPal Mobile Braintree Mobile* $0 $5 $10 $15 $20 $25 $30 $35 2008 2009 2010 2011 2012 2013 U.S.DollarsInBillions *PayPal counted a small por on of Braintree's transac on volume as its own in the last 12 days of Q4 2013. Source: PayPal PayPal Mobile Transac on Volume (Including Braintree 2013)
Starbucks did $1 billion in mobile transactions last year $145 $207 $244 $272 $340 $0 $50 $100 $150 $200 $250 $300 $350 $400 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2014 MillionsOfU.S.Dollars Source: Starbucks's Statements, BI Intelligence Es mates Starbucks's Mobile Payments Volume (United States)
New mobile car services like Uber are thriving 11,879,718 781,088 4,407,629 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 PaymentCardsOnFile Source: BI Intelligence Payment Cards On File For Car-Hailing Apps (Cumula ve) Uber Ly Hailo
Apple did $10 billion in app revenue last year $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2008 2009 2010 2011 2012 2013 (millions) Source: news reports, company releases Apple App Store Revenues By Year
Mobile has extended digital day to 18/7 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Mobile Visits Desktop Visits Source: Google Analytcs, Business Insider
Source: comScore, Telefonica, Macquarie Capital (USA), December 2011 Each device has a different “prime time” Share Of Device PageTraffic Over A Day:
Where are we in the smartphone adoption cycle?
Entering the late innings...
Smartphone sales have overtaken “dumb phones” - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 1Q08 4Q08 3Q09 2Q10 1Q11 4Q11 3Q12 2Q13 (Thousands) Source: Gartner Global Mobile Phone Sales Feature Phones Smartphones
Developed markets are nearing maturity 18% 65% 0% 10% 20% 30% 40% 50% 60% 70% Jan 10 Jun 10 Nov 10 Apr 11 Sep 11 Feb 12 Jul 12 Dec 12 May 13 Oct 13 (asapercentageofthemobilepopulaon) Source: comScore U.S. Smartphone Penetra on
US smartphone growth is slowing 0 5 10 15 20 25 30 35 40 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Users Added (Millions) U.S. Smartphone Market: Year-Over-Year Net Adds Source: comScore, Nielsen
Biggest opportunities now China and India 0 50 100 150 200 250 300 China India USA Brazil Indonesia Russia Japan M exico Germ any France UK Others Italy Australia M alaysia Sw eden MillionsOfSmartphones Source: Mediacells via The Guardian Smartphone Sales In 2014 Will Be Driven By New Users In Emerging Markets Sales To New Smartphone Users In 2014 Smartphone Upgrades In 2014 Top 11 Markets Other Markets
China is already twice the size of the US market… Mobile Users Total Users U.S. Users 0 100 200 300 400 500 600 700 June 06 Dec 06 June 07 Dec 07 June 08 Dec 08 June 09 Dec 09 June 10 Dec 10 June 11 Dec 11 June 12 Dec 12 June 13 Dec 13 MillionsOfInternetUsers Source: China Internet Network Informa on Center Chinese Internet Users
…And the No. 2 market for apps 1,358 294 185 139 130 244 79 507 315 4.30 4.65 2.30 2.12 0.67 1.70 3.43 0.37 2.47 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 0 200 400 600 800 1,000 1,200 1,400 1,600 USA UK Germany France Brazil Russia Australia China Japan AppDownloadsPerCapita TotalAppDownlaods(Millions) Source: XYO, BII Es mates Total App Downloads vs. App Downloads Per Capita By Country, April 2013 Total App Downloads App Downloads Per Capita
$100 $150 $200 $250 $300 $350 2010A 2011A 2012A 2013E 2014E 2015E 2016E AverageSellingPrice Source: BI Intelligence Estimates Global Smartphone Average Selling Price Forecast Prices are dropping fast
iPhone sales growth has cratered 0% 20% 40% 60% 80% 100% 120% 140% 160% 0 10,000 20,000 30,000 40,000 50,000 60,000 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 YOYSalesGrowth UnitSales(Thousands) Source: Company Filings iPhone Sales Unit Sales YOY Sales Growth
iPad sales growth has also nose-dived -50% 0% 50% 100% 150% 200% 0 5,000 10,000 15,000 20,000 25,000 30,000 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 YOYSalesGrowth UnitSale(Thousands) Source: Company Filings iPad Sales Unit Sales YOY Sales Growth
~225 million tablets were shipped in 2013 Apple Amazon (Kindle Fire) Windows - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Global Tablet Shipments By Pla orm Source: BI Intelligence Es mates Android
But growth is slowing rapidly Smartphones Tablets 0% 50% 100% 150% 200% 250% 300% 350% Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: BI Intelligence Es mates Year-Over-Year Growth Smartphones vs. Tablets, Quarterly
What about the platform war?
We have a winner!
~80% of smartphones run Android Android Apple iOS Microso BlackBerry Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 ShareofGlobalUnitSales Source: IDC, Strategy Analy cs Global Smartphone Market Share By Pla orm
~60% of tablets run Android Android Apple Amazon (Kindle Fire) BlackBerry Nook Windows 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: BI Intelligence Es mates Global Tablet Market Share By Pla orm
~60% of all new computing devices run Android Android Windows Apple BlackBerry Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: Gartner, IDC, Stategy Analy cs, Company Filings, BI Intelligence Es mates Global Compu ng Pla orm Market Share
Android used to lag Apple badly with app developers.
Not anymore.
Android 34% iOS 33% HTML5 17% Windows Phone 5% BlackBerry 4% Other 7% Mobile Developers' Main Pla orm Source: Developer Economics, July 2013 Android now as popular with global developers as iOS
Android “fragmentation” improving ReprintedWith Permission From OpenSignal, “Android FragmentationVisualized”
A majority of users now on “Jelly Bean” Froyo 1% Gingerbread 20% Ice Cream Sandwich 16% Jelly Bean 61% KitKat 2% Android Pla orm Distribu on, February 2014 Source: developer.android.com
Apple still very strong in US — but weaker globally Android Apple BlackBerry Microso Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 U.S. Smartphone Market Share By Pla orm Source: comScore
In US, Apple also still has edge in ad revenue iOS Android Other RIM Symbian 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 %MarketShare Source: Opera Media Works, The State Of Mobile Adver sing Q2 2012-Q3 2013 Ad Revenue Share By OS
And a big edge in eCommerce traffic… iPad iPhone Android Phone Android Tablet Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Source: Monetate Ecommerce Website Traffic By Mobile Pla orm
Should you be “mobile only?”
No!
The world is now “multi-screen” Personal Computers Smartphones Tablets Smart TVs Wearables 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Units Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates Global Internet Connected Device Shipments
You should be “mobile, too.”
What about ad spending?
One thing we can learn from the history of media…
Money follows eyeballs.
Eyeballs are moving to mobile 45%$ 25%$ 17%$ 9%$ 7%$ 4%$ 44%$ 26%$ 16%$ 8%$ 8%$ 6%$ 43%$ 26%$ 15%$ 7%$ 7%$ 9%$ 42%$ 26%$ 14%$ 6%$ 5%$ 12%$ 38%$ 20%$ 12%$ 4%$ 5%$ 20%$ 0%$ 5%$ 10%$ 15%$ 20%$ 25%$ 30%$ 35%$ 40%$ 45%$ 50%$ TV$ Online$ Radio$ Print$ Other$ Mobile$ Source:(eMarketer,(August(2013( U.S.$Consumer$Media$Consump2on$Share$ 2009$ 2010$ 2011$ 2012$ 2013$
6% 42% 26% 14% 12% 23% 43% 22% 10% 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Print TV Web Radio Mobile Source: IAB, eMarketer, Mary Meeker 2012 U.S. Ad Spending vs. Consumer Time Spent By Media Time Spent Ad Spend Mobile ad spending still lags time spent
So the money will follow… Offline All Other Online Mobile $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (billions) U.S. Adver sing Source: IAB, U.S. Census Bureau, Stategy Analy cs. BI Intelligence es mates
Spending is moving to mobile… 48% 43% 21% 19% 7% 15% 7% 6% 6% 7% 5% 4% 2% 2% 3% 3% 0.5% 0.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% H1 2012 H2 2013 %OfTotalDigitalAdRevenue Source: IAB 2013 US, Digital Ad Revenue By Format Email Rich Media Sponsorship Lead Genera on Digital Video Classifieds Mobile Display/ Banner Search
Mobile ad prices are lower but rising $3.50 $0.75 Desktop Internet Mobile Internet Effec ve CPM, Desktop vs. Mobile Source: comScore, Vivaki, Mobclix Exchange
US mobile ad spending per sub growing fast $0.0 $0.1 $0.1 $0.8 $1.4 $4.5 $0.1 $0.3 $0.3 $1.3 $2.8 $9.2 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 La n America Middle East and Africa Central Europe Asia-Pacific Western Europe North America Source: IAB, IHS Annual Mobile Ad Spend Per Mobile Subscrip on By Region 2011 2012
Search Display Messaging $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 2007 2008 2009 2010 2011 2012 2013E (Millions) Source: IAB, BI Intelligence Es mates Global Mobile Adver sing Revenue By Format Mobile is still dominated by paid search ads
And Google owns almost all of it 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Dec08Feb 09Apr09Jun 09Aug09Oct09Dec09Feb 10Apr10Jun 10Aug10Oct10Dec10Feb 11Apr11Jun 11Aug11Oct11Dec11Feb 12Apr12Jun 12Aug12Oct12Dec12Feb 13Apr13Jun 13Aug13Oct13Dec13 Source: StatCounter Global Mobile Search Market Share Google Yahoo! bing
So, what’s next?
6% 9% 19% 2% 4% 7% 7% 17% 7% 22% 0% 5% 10% 15% 20% 25% Other Connected TV Everything As A Service Indoor Loca on Distance Learning Mobile Adver sing Mobile Health Mobile Wallet Connected Car Wearables Source: Open Mobile Media, July 2013; n = 50+ Top-Level Mobile Execu ves A ending The Open Mobile Summit What Is The Next Big Thing In Mobile? Wearables!
Health devices are the most popular 87% 13% 20% 12% 6% 2% 2% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% No Yes Nike+ Fuelband Or Ac vity Tracker Fitbit Bodymedia Fitcore Pebble Watch Jawbone UP Recon Ski Goggles Source: Bloomberg/Survey Monkey, April 2013 Have You Ever Purchased A Wearable Compu ng Device Or Received One As A Gi ? If So, Which One? (US Respondents)
Not much interest in smart watches so far Galaxy Gear Official Shipments Galaxy Gear Low Es mate Retail Sales Pebble Shipments May-June 2013 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Month 1 Month 2 Source: Samsung, New Reports, BII Es mates Samsung Galaxy Gear Vs. Pebble Smart Watch Es mated Shipments And Retail Sales - First Two Months
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Tech-Sensi ve Tex les And Clothing Headset/Eyeglasses Sensor-Enabled Wristwear Medical Devices That Transmit Data Source: Bloomberg West/SurveyMonkey Consumers Are Interested In Smart Medical Devices And Wristwear Interest in glasses and headgear is only modest
They cost a lot, and there’s the creepiness thing Yes 28% No 53% Not Sure 19% Would You Feel Comforable If Someone You Were Interac ng With Were Wearing Glasses Like These?* Source: YouGov, May 2013 *n = 1,000 smartphone owners in U.S. Image: Google+/Robert Scoble
Connected Cars Image: GM
We spend 1.2 hours a day in cars... Sleeping 7.6 hours Leisure And Sports 2.5 hours In The Car 1.2 hours Ea ng/Drinking 1.1 hours Household Work 1.1 hours Other 1.7 others 0 12 24 Source: Bureau Of Labor Sta s cs Average Daily Time Spent Per Person U.S. Employed Ci zens ages 25 to 54 Working 8.8 hours
So connectivity will soon come standard 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E UnitShipments(thousands) Source: SBD,GSMA Connected Car Unit Shipment Forecast
Music, maps, weather, traffic, news are the killer apps U.S. Connected Cars Pandora U.S. Connected Car Ac va ons - 5,000 10,000 15,000 20,000 25,000 30,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 NumberOfCars(Thousands) Source: News Reports, Company Statements, BI Intelligence Es mates Es mated U.S. Market For Pandora In The Car
And soon you won’t even have to drive…
Enjoy the mobile future! Personal Computers Smartphones Tablets Smart TVs Wearables 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Units Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates Global Internet Connected Device Shipments
Thank you
Henry Blodget CEO & Editor-in-Chief, Business Insider Tony Danova, Research Analyst Marcelo Ballvé, Editorial Director BI Intelligence is a new subscription service from Business Insider that provides in-depth insight, data, and analysis of the mobile industry. More info at intelligence.businessinsider.com Cooper Smith, Research Analyst John Heggestuen, Research Analyst

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thinkLA Mobile Breakfast 2014 - Henry Blodget Presentation

  • 1.
    The Future OfMobile Henry Blodget BI Intelligence
  • 2.
    PCs are nowsmall share of connected devices… Personal Computers Smartphones Tablets Smart TVs Wearables 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Units Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates Global Internet Connected Device Shipments
  • 3.
    Almost 1 billionsmartphones shipped in 2013 Samsung Apple Huawei LG Lenovo Sony Ericsson ZTE Nokia Windows Phone BlackBerry HTC Motorola Other 0 25,000,000 50,000,000 75,000,000 100,000,000 125,000,000 150,000,000 175,000,000 200,000,000 225,000,000 250,000,000 275,000,000 300,000,000 325,000,000 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 UnitsShipped Global Smartphone Shipments By Manufacturer Source: BI Intelligence Es mates
  • 4.
    Tablets cannibalizing PCs… PCs Tablets 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 1Q083Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 (thousands) Source: Gartner, IDC, Strategy Analy cs company releases Global Computer Shipments
  • 5.
    “Phablets” filling inthe gap… Laptop Tablet Phablet 0 3 6 9 12 15 18 21 24 27 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 MillionsOfUnitsShipped Source: Interna onal Data Corpora on August 2013 "Asia" excludes Japan and includes Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam. Demand For Phablets Is Skyrocke ng In Asia
  • 6.
    $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 2010 2011 20122013 2014 2015 2016 2017 2018 (Millions) Source: BI Intelligence es mates, ABI Research, IMS, Juniper, *Assumes 42$ average selling price for wearable devices Wearable Device Market Size Forecast Wearables beginning to take off…
  • 7.
    In-vehicle services Hardware Telema csservice providers Telecom service providers € 0 € 5,000 € 10,000 € 15,000 € 20,000 € 25,000 € 30,000 € 35,000 € 40,000 € 45,000 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E (millions) Source: SBD, GSMA Connected Car Revenue Forecast Cars increasingly connected
  • 8.
    PC vendors, meanwhile,are getting smoked Lenovo HP Dell Acer Other 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 (thousands) Source: Gartner, IDC, BI Intelligence Es mates Global PC Shipments By Manufacturer iPad released Windows 8 released
  • 9.
    Mobile is creatingbig challenges and opportunities.
  • 10.
    We spend 1hour a day on our smartphones Other 10% Visit Websites 15% Games 9% Social Networking 17% Talk 28% Text 21% Breakdown Of The Average Smartphone Owner's Daily Time-Spend On Average, U.S. Smartphone Owners Spend 58 Minutes Daily On Their Phones Source: Experian Marke ng Services, May 2013
  • 11.
    43 39 30 17 0 5 10 15 20 25 30 35 40 45 50 TV PC/Laptop TabletSmartphone Minutes Source: Google, August 2012 Average Minutes Spent Per Interac on By Device We spend ½ hour on tablet each time we use it
  • 12.
    Mobile is theonly media time that is growing 45%$ 25%$ 17%$ 9%$ 7%$ 4%$ 44%$ 26%$ 16%$ 8%$ 8%$ 6%$ 43%$ 26%$ 15%$ 7%$ 7%$ 9%$ 42%$ 26%$ 14%$ 6%$ 5%$ 12%$ 38%$ 20%$ 12%$ 4%$ 5%$ 20%$ 0%$ 5%$ 10%$ 15%$ 20%$ 25%$ 30%$ 35%$ 40%$ 45%$ 50%$ TV$ Online$ Radio$ Print$ Other$ Mobile$ Source:(eMarketer,(August(2013( U.S.$Consumer$Media$Consump2on$Share$ 2009$ 2010$ 2011$ 2012$ 2013$
  • 13.
    Mobile is enablingnew forms of entertainment, communication, media, and commerce.
  • 14.
    Staggering growth fornew communication apps… Instagram WhatsApp Snapchat 0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 TotalUserBaseSize Source: News Reports, Company Lis ngs, ComScore, BII Es mates Total User Base
  • 15.
    450 million WhatsAppusers, +1 million a day 8 10 11 16 19 200 Ac ver Users 450 0 50 100 150 200 250 300 350 400 450 500 0 5 10 15 20 25 Apr-13 Jun-13 Aug-13 Dec-13 Feb-14 NumberOfAcveUsers(Millions) NumberOfDailyMessages(Billions) Source: WhatsApp, News Reports, BII Es mates WhatsApp Growth Messages Sent Ac ver Users
  • 16.
    Similar growth forWeChat and Line… 0 50 100 150 200 250 300 350 400 450 500 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Millions Source: BI Intelligence Es mates WhatsApp, WeChat, LINE, Viber Monthly Ac ve Users (Global) WhatsApp WeChat LINE Viber
  • 17.
    Usage of theseapps has blown past “texting” 16.2 19.5 4.4 41.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 2011 2012 2013 BillionsOfMessagesPerDay Source: Informa, April 2013 OTT Surpasses SMS SMS OTT
  • 18.
    ~1 billion picturesshared each day Facebook, 43% Snapchat, 49% Instagram, 7% Flickr, 1% Top Photo Sharing Sites, November 2013 Daily Photo Uploads Among Top 4 Sites (809 Million Photos) Source: BI Intelligence
  • 19.
    ~500 million Snapchatpictures a day 0 50 100 150 200 250 300 350 400 450 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 DailyPhotoSharesInMillions Source: Snapchat, TechCrunch September 2013, CNET June 2013, KPCG May 2013 Snapchat's Daily Photo Shares Are Soaring
  • 20.
    Over 1/5th ofInternet traffic is now from mobile 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Source: StatCounter, December 2013 Global Internet Traffic Desktop Vs. Mobile
  • 21.
    Mobile video isbooming… 0 1 2 3 4 5 6 7 8 2011 2012 2013 2014 2015 2016 2017 MillionsofTerabytesPerMonth Source: Cisco, 2013 Global Mobile Video Traffic Will Con nue To Surge
  • 22.
    Pandora 85% Facebook 65% Twi er 80% 0% 25% 50% 75% 100% 2008 20092010 2011 2012 2013E %ofTrafficfromMobile Source: Mary Meeker, Kleiner Perkins, companies, BII es mates Mobile Usage: Pandora, Twi er, Facebook Social and music are now mostly mobile
  • 23.
    Mobile is drivingall of Facebook’s revenue growth Total Ad Revenue Mobile Ad Revenue $ 0 $ 500 $ 1,000 $ 1,500 $ 2,000 $ 2,500 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Millions Source: Facebook Facebook Ad Revenues
  • 24.
    Mobile is now~25% of e-commerce traffic… PC Tablet Smartphone 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: Monetate Ecommerce Website Traffic By Device
  • 25.
    (But only 13%of e-commerce sales) Desktop E-Commerce Sales Mobile $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13E ($millions) Source: BI Intelligence, comScore, Federal Reserve Economic Data--St. Louis Fed U.S. E-Commerce Retail Sales
  • 26.
    0 20 40 60 80 100 120 140 160 Am azon eBay W al-M art Apple Target BestBuy The Hom e Depot Ticketm aster Etsy Low es (Millions) Source: comScore Leading Retailers'Digital Audience Popula on By Device Desktop Only Desktop + Mobile Mobile Only Retailers are seeing huge mobile audience gains …
  • 27.
    PayPal powers $30billion in mobile transactions PayPal Mobile Braintree Mobile* $0 $5 $10 $15 $20 $25 $30 $35 2008 2009 2010 2011 2012 2013 U.S.DollarsInBillions *PayPal counted a small por on of Braintree's transac on volume as its own in the last 12 days of Q4 2013. Source: PayPal PayPal Mobile Transac on Volume (Including Braintree 2013)
  • 28.
    Starbucks did $1billion in mobile transactions last year $145 $207 $244 $272 $340 $0 $50 $100 $150 $200 $250 $300 $350 $400 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2014 MillionsOfU.S.Dollars Source: Starbucks's Statements, BI Intelligence Es mates Starbucks's Mobile Payments Volume (United States)
  • 29.
    New mobile carservices like Uber are thriving 11,879,718 781,088 4,407,629 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 PaymentCardsOnFile Source: BI Intelligence Payment Cards On File For Car-Hailing Apps (Cumula ve) Uber Ly Hailo
  • 30.
    Apple did $10billion in app revenue last year $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2008 2009 2010 2011 2012 2013 (millions) Source: news reports, company releases Apple App Store Revenues By Year
  • 31.
    Mobile has extendeddigital day to 18/7 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Mobile Visits Desktop Visits Source: Google Analytcs, Business Insider
  • 32.
    Source: comScore, Telefonica,Macquarie Capital (USA), December 2011 Each device has a different “prime time” Share Of Device PageTraffic Over A Day:
  • 33.
    Where are wein the smartphone adoption cycle?
  • 34.
  • 35.
    Smartphone sales haveovertaken “dumb phones” - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 1Q08 4Q08 3Q09 2Q10 1Q11 4Q11 3Q12 2Q13 (Thousands) Source: Gartner Global Mobile Phone Sales Feature Phones Smartphones
  • 36.
    Developed markets arenearing maturity 18% 65% 0% 10% 20% 30% 40% 50% 60% 70% Jan 10 Jun 10 Nov 10 Apr 11 Sep 11 Feb 12 Jul 12 Dec 12 May 13 Oct 13 (asapercentageofthemobilepopulaon) Source: comScore U.S. Smartphone Penetra on
  • 37.
    US smartphone growthis slowing 0 5 10 15 20 25 30 35 40 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Users Added (Millions) U.S. Smartphone Market: Year-Over-Year Net Adds Source: comScore, Nielsen
  • 38.
    Biggest opportunities nowChina and India 0 50 100 150 200 250 300 China India USA Brazil Indonesia Russia Japan M exico Germ any France UK Others Italy Australia M alaysia Sw eden MillionsOfSmartphones Source: Mediacells via The Guardian Smartphone Sales In 2014 Will Be Driven By New Users In Emerging Markets Sales To New Smartphone Users In 2014 Smartphone Upgrades In 2014 Top 11 Markets Other Markets
  • 39.
    China is alreadytwice the size of the US market… Mobile Users Total Users U.S. Users 0 100 200 300 400 500 600 700 June 06 Dec 06 June 07 Dec 07 June 08 Dec 08 June 09 Dec 09 June 10 Dec 10 June 11 Dec 11 June 12 Dec 12 June 13 Dec 13 MillionsOfInternetUsers Source: China Internet Network Informa on Center Chinese Internet Users
  • 40.
    …And the No.2 market for apps 1,358 294 185 139 130 244 79 507 315 4.30 4.65 2.30 2.12 0.67 1.70 3.43 0.37 2.47 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 0 200 400 600 800 1,000 1,200 1,400 1,600 USA UK Germany France Brazil Russia Australia China Japan AppDownloadsPerCapita TotalAppDownlaods(Millions) Source: XYO, BII Es mates Total App Downloads vs. App Downloads Per Capita By Country, April 2013 Total App Downloads App Downloads Per Capita
  • 41.
    $100 $150 $200 $250 $300 $350 2010A 2011A 2012A2013E 2014E 2015E 2016E AverageSellingPrice Source: BI Intelligence Estimates Global Smartphone Average Selling Price Forecast Prices are dropping fast
  • 42.
    iPhone sales growthhas cratered 0% 20% 40% 60% 80% 100% 120% 140% 160% 0 10,000 20,000 30,000 40,000 50,000 60,000 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 YOYSalesGrowth UnitSales(Thousands) Source: Company Filings iPhone Sales Unit Sales YOY Sales Growth
  • 43.
    iPad sales growthhas also nose-dived -50% 0% 50% 100% 150% 200% 0 5,000 10,000 15,000 20,000 25,000 30,000 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 YOYSalesGrowth UnitSale(Thousands) Source: Company Filings iPad Sales Unit Sales YOY Sales Growth
  • 44.
    ~225 million tabletswere shipped in 2013 Apple Amazon (Kindle Fire) Windows - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Global Tablet Shipments By Pla orm Source: BI Intelligence Es mates Android
  • 45.
    But growth isslowing rapidly Smartphones Tablets 0% 50% 100% 150% 200% 250% 300% 350% Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: BI Intelligence Es mates Year-Over-Year Growth Smartphones vs. Tablets, Quarterly
  • 46.
    What about theplatform war?
  • 47.
    We have awinner!
  • 48.
    ~80% of smartphonesrun Android Android Apple iOS Microso BlackBerry Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 ShareofGlobalUnitSales Source: IDC, Strategy Analy cs Global Smartphone Market Share By Pla orm
  • 49.
    ~60% of tabletsrun Android Android Apple Amazon (Kindle Fire) BlackBerry Nook Windows 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: BI Intelligence Es mates Global Tablet Market Share By Pla orm
  • 50.
    ~60% of allnew computing devices run Android Android Windows Apple BlackBerry Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: Gartner, IDC, Stategy Analy cs, Company Filings, BI Intelligence Es mates Global Compu ng Pla orm Market Share
  • 51.
    Android used tolag Apple badly with app developers.
  • 52.
  • 53.
    Android 34% iOS 33% HTML5 17% Windows Phone 5% BlackBerry 4% Other 7% Mobile Developers'Main Pla orm Source: Developer Economics, July 2013 Android now as popular with global developers as iOS
  • 54.
    Android “fragmentation” improving ReprintedWithPermission From OpenSignal, “Android FragmentationVisualized”
  • 55.
    A majority ofusers now on “Jelly Bean” Froyo 1% Gingerbread 20% Ice Cream Sandwich 16% Jelly Bean 61% KitKat 2% Android Pla orm Distribu on, February 2014 Source: developer.android.com
  • 56.
    Apple still verystrong in US — but weaker globally Android Apple BlackBerry Microso Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 U.S. Smartphone Market Share By Pla orm Source: comScore
  • 57.
    In US, Applealso still has edge in ad revenue iOS Android Other RIM Symbian 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 %MarketShare Source: Opera Media Works, The State Of Mobile Adver sing Q2 2012-Q3 2013 Ad Revenue Share By OS
  • 58.
    And a bigedge in eCommerce traffic… iPad iPhone Android Phone Android Tablet Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Source: Monetate Ecommerce Website Traffic By Mobile Pla orm
  • 59.
    Should you be“mobile only?”
  • 60.
  • 61.
    The world isnow “multi-screen” Personal Computers Smartphones Tablets Smart TVs Wearables 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Units Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates Global Internet Connected Device Shipments
  • 62.
    You should be“mobile, too.”
  • 63.
    What about adspending?
  • 64.
    One thing wecan learn from the history of media…
  • 65.
  • 66.
    Eyeballs are movingto mobile 45%$ 25%$ 17%$ 9%$ 7%$ 4%$ 44%$ 26%$ 16%$ 8%$ 8%$ 6%$ 43%$ 26%$ 15%$ 7%$ 7%$ 9%$ 42%$ 26%$ 14%$ 6%$ 5%$ 12%$ 38%$ 20%$ 12%$ 4%$ 5%$ 20%$ 0%$ 5%$ 10%$ 15%$ 20%$ 25%$ 30%$ 35%$ 40%$ 45%$ 50%$ TV$ Online$ Radio$ Print$ Other$ Mobile$ Source:(eMarketer,(August(2013( U.S.$Consumer$Media$Consump2on$Share$ 2009$ 2010$ 2011$ 2012$ 2013$
  • 67.
    6% 42% 26% 14% 12% 23% 43% 22% 10% 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Print TV WebRadio Mobile Source: IAB, eMarketer, Mary Meeker 2012 U.S. Ad Spending vs. Consumer Time Spent By Media Time Spent Ad Spend Mobile ad spending still lags time spent
  • 68.
    So the moneywill follow… Offline All Other Online Mobile $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (billions) U.S. Adver sing Source: IAB, U.S. Census Bureau, Stategy Analy cs. BI Intelligence es mates
  • 69.
    Spending is movingto mobile… 48% 43% 21% 19% 7% 15% 7% 6% 6% 7% 5% 4% 2% 2% 3% 3% 0.5% 0.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% H1 2012 H2 2013 %OfTotalDigitalAdRevenue Source: IAB 2013 US, Digital Ad Revenue By Format Email Rich Media Sponsorship Lead Genera on Digital Video Classifieds Mobile Display/ Banner Search
  • 70.
    Mobile ad pricesare lower but rising $3.50 $0.75 Desktop Internet Mobile Internet Effec ve CPM, Desktop vs. Mobile Source: comScore, Vivaki, Mobclix Exchange
  • 71.
    US mobile adspending per sub growing fast $0.0 $0.1 $0.1 $0.8 $1.4 $4.5 $0.1 $0.3 $0.3 $1.3 $2.8 $9.2 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 La n America Middle East and Africa Central Europe Asia-Pacific Western Europe North America Source: IAB, IHS Annual Mobile Ad Spend Per Mobile Subscrip on By Region 2011 2012
  • 72.
    Search Display Messaging $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 2007 2008 20092010 2011 2012 2013E (Millions) Source: IAB, BI Intelligence Es mates Global Mobile Adver sing Revenue By Format Mobile is still dominated by paid search ads
  • 73.
    And Google ownsalmost all of it 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Dec08Feb 09Apr09Jun 09Aug09Oct09Dec09Feb 10Apr10Jun 10Aug10Oct10Dec10Feb 11Apr11Jun 11Aug11Oct11Dec11Feb 12Apr12Jun 12Aug12Oct12Dec12Feb 13Apr13Jun 13Aug13Oct13Dec13 Source: StatCounter Global Mobile Search Market Share Google Yahoo! bing
  • 74.
  • 75.
    6% 9% 19% 2% 4% 7% 7% 17% 7% 22% 0% 5% 10%15% 20% 25% Other Connected TV Everything As A Service Indoor Loca on Distance Learning Mobile Adver sing Mobile Health Mobile Wallet Connected Car Wearables Source: Open Mobile Media, July 2013; n = 50+ Top-Level Mobile Execu ves A ending The Open Mobile Summit What Is The Next Big Thing In Mobile? Wearables!
  • 76.
    Health devices arethe most popular 87% 13% 20% 12% 6% 2% 2% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% No Yes Nike+ Fuelband Or Ac vity Tracker Fitbit Bodymedia Fitcore Pebble Watch Jawbone UP Recon Ski Goggles Source: Bloomberg/Survey Monkey, April 2013 Have You Ever Purchased A Wearable Compu ng Device Or Received One As A Gi ? If So, Which One? (US Respondents)
  • 77.
    Not much interestin smart watches so far Galaxy Gear Official Shipments Galaxy Gear Low Es mate Retail Sales Pebble Shipments May-June 2013 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Month 1 Month 2 Source: Samsung, New Reports, BII Es mates Samsung Galaxy Gear Vs. Pebble Smart Watch Es mated Shipments And Retail Sales - First Two Months
  • 78.
    0% 5% 10%15% 20% 25% 30% 35% 40% 45% Tech-Sensi ve Tex les And Clothing Headset/Eyeglasses Sensor-Enabled Wristwear Medical Devices That Transmit Data Source: Bloomberg West/SurveyMonkey Consumers Are Interested In Smart Medical Devices And Wristwear Interest in glasses and headgear is only modest
  • 79.
    They cost alot, and there’s the creepiness thing Yes 28% No 53% Not Sure 19% Would You Feel Comforable If Someone You Were Interac ng With Were Wearing Glasses Like These?* Source: YouGov, May 2013 *n = 1,000 smartphone owners in U.S. Image: Google+/Robert Scoble
  • 80.
  • 81.
    We spend 1.2hours a day in cars... Sleeping 7.6 hours Leisure And Sports 2.5 hours In The Car 1.2 hours Ea ng/Drinking 1.1 hours Household Work 1.1 hours Other 1.7 others 0 12 24 Source: Bureau Of Labor Sta s cs Average Daily Time Spent Per Person U.S. Employed Ci zens ages 25 to 54 Working 8.8 hours
  • 82.
    So connectivity willsoon come standard 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E UnitShipments(thousands) Source: SBD,GSMA Connected Car Unit Shipment Forecast
  • 83.
    Music, maps, weather,traffic, news are the killer apps U.S. Connected Cars Pandora U.S. Connected Car Ac va ons - 5,000 10,000 15,000 20,000 25,000 30,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 NumberOfCars(Thousands) Source: News Reports, Company Statements, BI Intelligence Es mates Es mated U.S. Market For Pandora In The Car
  • 84.
    And soon youwon’t even have to drive…
  • 85.
    Enjoy the mobilefuture! Personal Computers Smartphones Tablets Smart TVs Wearables 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Units Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates Global Internet Connected Device Shipments
  • 86.
  • 87.
    Henry Blodget CEO &Editor-in-Chief, Business Insider Tony Danova, Research Analyst Marcelo Ballvé, Editorial Director BI Intelligence is a new subscription service from Business Insider that provides in-depth insight, data, and analysis of the mobile industry. More info at intelligence.businessinsider.com Cooper Smith, Research Analyst John Heggestuen, Research Analyst