MOBILE IS EATING THE WORLD BENEDICT EVANS
For the first time, tech is selling to everyone
Growth into the bubble 0.5 0.4 0.3 0.2 0.1 0.0 Billion people online 1995 2000 Source: ITU, a16z
Growth since the bubble 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Billion people online 1995 2000 2014 People online Sma...
Growth into the future - everyone Another 1bn people will come online, all due to smartphones 5 4 3 2 1 0 Billion ...
The unconnected are shrinking 100% 75% 50% 25% 0% Global adult population 1995 1997 1999 2001 2003 2005 2007 2009 2...
The world in 2020 By 2020 80% of the adults on earth will have a smartphone 8 7 6 5 4 3 2 1 0 Population Adults...
Source: Apple, Intel, a16z A new iPhone CPU has 625 times more transistors than a 1995 Pentium iPhone launch weekend: A...
Yes, everyone The utility of mobile increases as income falls 80% 70% 60% 50% 40% 30% 20% 10% 0% Cellular cover...
The first thing this changes is the internet
Post-Netscape, post-PageRank More time is spent in mobile apps than on all of the web 1,250 1,000 750 500 250 0 US...
And remains totally unsettled “Android”? Forks, Google Play Services, Chrome… “I installed an app on my Android smartph...
Ecosystem complexity Ecosystem dynamics depend on where you are and what you’re doing 100% 75% 50% 25% 0% Mobile pl...
New sensors, new businesses Smartphones are far more sophisticated than PCs A computer shouldn’t ask anything that it...
Key: mobile leverage I n creased sophistication from mobile is as important as the increase in scale x Personal Taken ...
Facebook’s multi-stage rocket Mobile ads have doubled revenue and built a $6.5bn run-rate business in just 24 months 3.0...
Source: GSMA, WhatsApp Global SMS: 7.5tr messages a year WhatsApp: 7.2tr messages a year (with just 30 engineers)
Fundamental change in costs Mobile leverage plus collapse of development costs transforms early capital needs 2000 100 ...
Mobile remakes the tech industry
The smartphone industry dwarfs PCs 4bn people buying every 2 years instead of 1.6bn buying every 5 years 300 250 200 ...
Mobile scale eats consumer electronics Smartphones & tablets are now close to half of the consumer electronics industry ...
1999 – 80bn consumer photos taken on film This year – 800bn photos shared on social networks More iPhones & Android pho...
Shift away from Microsoft 100% 75% 50% 25% 0% Microsoft share of personal computing device sales March-09 March-10 ...
Apple, the minority smartphone player, is overtaking the entire PC industry * PC industry excluding Mac sales Source: Ap...
Tech centre of gravity moves from Seattle and Finland (and Japan) Old New Computing platform Microsoft Apple & Google ...
Leveraging the mobile supply chain Enabling new categories Wearables, Internet of Things, Smart TV Connected cars, D...
More interesting: remaking other industries
Technology dominates our attention Source: Ofcom
And tech brands are huge 50% 40% 30% 20% 10% 0% Share of top 100 global brand value 2004 2014 Google, Apple, Fac...
What would children miss the most? Mobile 100% 75% 50% 25% 0% ‘Media you would miss most', UK aged 11-15 Boys Girls...
Comms are going pure digital, pure mobile Email is for grandparents 100% 75% 50% 25% 0% Share of communication acti...
TV sets are in the minority Computing devices used for video now far outnumber actual ‘televisions’ Source: Apple, Googl...
Glass is eating the world Close to a square foot of screen sold for every adult on earth 5 4 3 2 1 0 Global LCD di...
Yet tech is still a pretty small industry 1,600 1,400 1,200 1,000 800 600 400 200 0 Global revenue, 2013 ($bn) ...
Three phases of technology deployment Companies that write a check to buy technology Companies that make technology ...
Companies that write a check for technology
Amazon: Sears Roebuck of the 21st Century Tech company? Or retailer created with tech? 80 70 60 50 40 30 20 10 0...
But still (relatively) tiny Amazon still only has 1% of US retail 1.25% 1.00% 0.75% 0.50% 0.25% 0.00% Amazon North...
Each wave of tech creates new businesses Railways & steam press Photography Color printing Internet & Social Hearst Li...
But are those ‘tech’ businesses? Trucks & inter-state highways Trucks & inter-state highways Web & Smartphones Smart...
When tech is fully adopted, it disappears 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950...
Steel 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Source: G...
Computerization 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 ...
Software 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Source...
‘Software is eating the world’ Tech outgrows the tech industry
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Mobile Is Eating the World (2014)

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There is no point in drawing a distinction between the future of technology and the future of mobile. They are the same. In other words, technology is now outgrowing the tech industry.

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Mobile Is Eating the World (2014)

  1. MOBILE IS EATING THE WORLD BENEDICT EVANS
  2. For the first time, tech is selling to everyone
  3. Growth into the bubble 0.5 0.4 0.3 0.2 0.1 0.0 Billion people online 1995 2000 Source: ITU, a16z
  4. Growth since the bubble 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Billion people online 1995 2000 2014 People online Smartphones Source: ITU, a16z
  5. Growth into the future - everyone Another 1bn people will come online, all due to smartphones 5 4 3 2 1 0 Billion people online 1995 2000 2014 2020 People online Smartphones Source: ITU, a16z
  6. The unconnected are shrinking 100% 75% 50% 25% 0% Global adult population 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015e 2017e No Internet No smartphone [Source: a16z, World Bank, Apple, Google, Nokia]
  7. The world in 2020 By 2020 80% of the adults on earth will have a smartphone 8 7 6 5 4 3 2 1 0 Population Adults TV audience Literate adults Mobile Online pops Smart phones PCs Consumer PCs Global population (bn) Growth to 2020 2014 Source: World Bank, GSMA, a16z
  8. Source: Apple, Intel, a16z A new iPhone CPU has 625 times more transistors than a 1995 Pentium iPhone launch weekend: Apple sold 25x more CPU transistors than were in all the PCs on Earth in 1995 Everyone gets a pocket supercomputer
  9. Yes, everyone The utility of mobile increases as income falls 80% 70% 60% 50% 40% 30% 20% 10% 0% Cellular coverage 3G coverage now 3G coverage by 2019 Improved water Electricity Mobile users Sub-Saharan Africa population coverage Source: Ericsson, McKinsey
  10. The first thing this changes is the internet
  11. Post-Netscape, post-PageRank More time is spent in mobile apps than on all of the web 1,250 1,000 750 500 250 0 US time spent online (bn minutes) June 2013 June 2014 Mobile web Mobile app Desktop web Source: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S., June 2013 - June 2014
  12. And remains totally unsettled “Android”? Forks, Google Play Services, Chrome… “I installed an app on my Android smartphone ” “Installed” an “app”? Web apps, cards, APIs, push notifications, social platforms, Google Now… “Smartphone?” Watches, Glass, wearables, TV, tablets…
  13. Ecosystem complexity Ecosystem dynamics depend on where you are and what you’re doing 100% 75% 50% 25% 0% Mobile platform share Phone unit sales SF FB users Delhi FB users App store revenue Global Browsing China browsing Android iOS Source: Facebook, Apple, Google, Gartner, Akamai, Baidu, a16z
  14. New sensors, new businesses Smartphones are far more sophisticated than PCs A computer shouldn’t ask anything that it should know Sensors profoundly change what a computer can know Every new sensor creates a new business
  15. Key: mobile leverage I n creased sophistication from mobile is as important as the increase in scale x Personal Taken everywhere Frictionless access Sensors, cameras Location Payment Social platform Much easier to use = 10x the opportunity 2-3x more smartphones than PCs by 2020
  16. Facebook’s multi-stage rocket Mobile ads have doubled revenue and built a $6.5bn run-rate business in just 24 months 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Facebook revenue by segment ($bn) June-11 December-11 June-12 December-12 June-13 December-13 June-14 Mobile ads Payments & Other Desktop ads Source: Facebook
  17. Source: GSMA, WhatsApp Global SMS: 7.5tr messages a year WhatsApp: 7.2tr messages a year (with just 30 engineers)
  18. Fundamental change in costs Mobile leverage plus collapse of development costs transforms early capital needs 2000 100 staff 1m users $10m raised Today 10 staff 10m users $1m raised YO 1 man 1m users $0 raised
  19. Mobile remakes the tech industry
  20. The smartphone industry dwarfs PCs 4bn people buying every 2 years instead of 1.6bn buying every 5 years 300 250 200 150 100 50 0 Quarterly unit shipments (m) March-95 March-97 March-99 March-01 March-03 March-05 March-07 March-09 March-11 March-13 PCs iOS & Android Source: Gartner, Apple, Google, a16z
  21. Mobile scale eats consumer electronics Smartphones & tablets are now close to half of the consumer electronics industry 50% 40% 30% 20% 10% 0% Smartphone & tablet share of global CE retail revenue 2008 2009 2010 2011 2012 2013 2014 Source: GfK, a16z
  22. 1999 – 80bn consumer photos taken on film This year – 800bn photos shared on social networks More iPhones & Android phones sold than Japanese cameras ever Source: Kodak, Companies, CIPA, a16z
  23. Shift away from Microsoft 100% 75% 50% 25% 0% Microsoft share of personal computing device sales March-09 March-10 March-11 March-12 March-13 March-14 Source: Gartner, Apple, Google, Microsoft, Nokia, Blackberry, a16z
  24. Apple, the minority smartphone player, is overtaking the entire PC industry * PC industry excluding Mac sales Source: Apple, Microsoft, Barclays Capital 250 200 150 100 50 0 Revenue ($bn) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Apple PC industry * Microsoft
  25. Tech centre of gravity moves from Seattle and Finland (and Japan) Old New Computing platform Microsoft Apple & Google Chips Intel ARM & Qualcomm Mobile Nokia Shenzhen, China
  26. Leveraging the mobile supply chain Enabling new categories Wearables, Internet of Things, Smart TV Connected cars, Drones etc etc Flood of small, cheap, low-power, high-performance smartphone chips And pushing into the data centre From ‘big iron’ and Intel to ARM and commodity components
  27. More interesting: remaking other industries
  28. Technology dominates our attention Source: Ofcom
  29. And tech brands are huge 50% 40% 30% 20% 10% 0% Share of top 100 global brand value 2004 2014 Google, Apple, Facebook, Amazon All tech brands Source: Interbrand
  30. What would children miss the most? Mobile 100% 75% 50% 25% 0% ‘Media you would miss most', UK aged 11-15 Boys Girls Other TV set Games console PC Mobile & tablet Source: Ofcom
  31. Comms are going pure digital, pure mobile Email is for grandparents 100% 75% 50% 25% 0% Share of communication activity, UK Adults 12 to 15 Photo messages Messaging apps Social networks Phone calls Email Source: Ofcom
  32. TV sets are in the minority Computing devices used for video now far outnumber actual ‘televisions’ Source: Apple, Google, Nokia, Blackberry, Displaysearch, a16z TVs 24% iOS 13% Google Android 23% Chinese Android 9% WP/RIM 1% PCs & Macs 30% Global install base of video players “By the summer of 2012, the majority of the televisions you see in stores will have Google TV embedded” - Eric Schmidt
  33. Glass is eating the world Close to a square foot of screen sold for every adult on earth 5 4 3 2 1 0 Global LCD display sales (billion square feet) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Corning
  34. Yet tech is still a pretty small industry 1,600 1,400 1,200 1,000 800 600 400 200 0 Global revenue, 2013 ($bn) Music Films Online ads Books PCs Phones GAFA TV Advertising Mobile Apparel Cars Source: Companies, PwC, a16z
  35. Three phases of technology deployment Companies that write a check to buy technology Companies that make technology Companies that are created with technology
  36. Companies that write a check for technology
  37. Amazon: Sears Roebuck of the 21st Century Tech company? Or retailer created with tech? 80 70 60 50 40 30 20 10 0 -10 Amazon since launch ($bn) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenue Net income Source: Amazon
  38. But still (relatively) tiny Amazon still only has 1% of US retail 1.25% 1.00% 0.75% 0.50% 0.25% 0.00% Amazon North America ecommerce as % US retail* 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * Excluding gasoline, building supplies, food & beverage service. Source: a16z, BLS, Amazon
  39. Each wave of tech creates new businesses Railways & steam press Photography Color printing Internet & Social Hearst Life Glossy Magazines Buzzfeed … but these are all still media businesses
  40. But are those ‘tech’ businesses? Trucks & inter-state highways Trucks & inter-state highways Web & Smartphones Smartphones McDonalds Walmart AirBnB Uber/Lyft Food Retail Travel Transport
  41. When tech is fully adopted, it disappears 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Source: Google Frequency of ‘Railways’ in Google Books
  42. Steel 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Source: Google Frequency of ‘Steel’ in Google Books
  43. Computerization 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Source: Google Frequency of ‘Computerization’ in Google Books
  44. Software 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Source: Google Frequency of ‘Software’ in Google Books
  45. ‘Software is eating the world’ Tech outgrows the tech industry

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