India Gadget Expo: Emotion Trumps Gadgets

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Keynote presentation by Levi Shapiro at the 2014 India Gadget Expo. The audience is invited to look beyond the spec war and create experiences with emotional resonance that capture lifetime value through "Freemium" pricing strategies. Examples include digital icons such as Lady Gaga and Jimmy Iovine, messaging apps like Facebook and WeChat, consumer brands like Nivea, Heineken, Vittel Water, Motorola as well as Israeli startups Waze, Magisto and JINNI.

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India Gadget Expo: Emotion Trumps Gadgets

  1. 1. Emotions Trump Gadgets Levi Shapiro, India Gadget Expo, June 19, 2014
  2. 2. The Future of Digital?
  3. 3. Apple Thinks So
  4. 4. First…let’s Talk About the Glass Ceiling
  5. 5. Multi-modal Competition
  6. 6. Ecosystems Compete on Cross-Screen Experience
  7. 7. Global annual unit sales (m) 1,000 750 500 250 0 PCs 1,250 1997 1999 2001 2003 2005 2007 2009 2011 2013e1995 Smartphones and tablets 0
  8. 8. Apps are eating the world Source Flurry Aug ‘12Mar ’11 Jan ‘12 80% Of time on mobile is spent in apps 140 120 60 40 20 0 100 80 160 Apps Mobile web Total min spent on mobile apps vs mobile web (billions of minutes per month, US) Minutesspentpermonth (billions)
  9. 9. Messaging is a Mobile Ecosystem
  10. 10. 14times average number of times a user checks Facebook on their mobile daily Source: comScore Mobile Metrix, US March 2013
  11. 11. Facebook revenue by source $2.5b Q4 $3.0b $1.5b 0 $1.0b $0.5b Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Mobile AdvertisingPayments Advertising $2.0b Q1 Q2 Q3 Q4 2010 2011 2012 2013 $2.6b
  12. 12. Engagement Enables eCommerce
  13. 13. WeChat Ecosystem Value Capture
  14. 14. Hardware as a Tool to Sell Digital Content
  15. 15. Glide’s Technical Edge
  16. 16. Personal Computers (Desktop And Notebook) Smartphones Tablets Smart TVs Wearables 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E #OfDevices(InMillions) Global Internet Device Installed Base Forecast Its Not Just Mobile (eMarketer, 2013)
  17. 17. The Magpie effect
  18. 18. Offline Economy is Becoming “Appified” • Massively contextual- Transactions are Incremental • Your 2nd brain knows better than you do • Wallet accessed through your mobile and gatekeepers
  19. 19. Neural Measurement Source: Professor Nathan Intrator , TAU
  20. 20. Hey Cookie…You Talkin’ To Me?
  21. 21. Welcome Levi
  22. 22. Web Mobile Context
  23. 23. NEXT GEN
  24. 24. Hours spent watching video monthly 5 12 9 33 8 Source:Mashable,July2012,LinearTVNielsen11/12 NON-LINEAR VIDEO VIEWING NOW EXCEEDS LINEAR TV
  25. 25. BRIDGING THE GAP
  26. 26. What Millenials Want…In Their Employer 1.Training 2. Management style 3. Work flexibility (time is currency) 4. Staff activities 5. Non financial rewards (Activism) 6. Good salary #1 priority: “sense of meaning” (Career Advisory Board, Harris Interactive study, 2012)
  27. 27. “In 2009, there were 2.5 billion connected devices. In 2020, there will be 50 billion, most of which will be products.” (Gartner, 2013) Millenials seek gadgets & experiences reflecting their values: Inclusive, Personal,Relationship-based
  28. 28. https://www.youtube.com/watch?v=OTwJI0f8c1s Israeli Brand: Magisto
  29. 29. https://www.youtube.com/watch?v=y_7yoEUrVhw Israeli Brand: Waze
  30. 30. https://www.youtube.com/watch?v=5wh6BoTBx2w Israeli Brand: JINNI
  31. 31. http://www.youtube.com/watch?v=OlvjzQJGDnY Nivea
  32. 32. https://www.youtube.com/watch?v=UYy1GmJgFXA Nivea (2)
  33. 33. https://www.youtube.com/watch?v=iMrZmSPpIRw Motorola
  34. 34. https://www.youtube.com/watch?v=IIpMtWeXCaE Heineken
  35. 35. https://www.youtube.com/watch?v=yyRgQJzILus Vittel Water
  36. 36. https://www.youtube.com/watch?v=sjvSqDPrjGk This is your Moonshot
  37. 37. Can Your Gadget Encapsulate Noble Brand Values and Yet be Freemium?
  38. 38. Freemium Products • ZERO marginal cost of distribution • Low inherent conversion rate • Large scale / large total addressable market • Continuous monetization curve • Minority of highly engaged users
  39. 39. Characteristics of Freemium Products • No switching cost • LTV difficult to calculate • Much larger potential audience (everyone can afford free) • Network effects easier to achieve • Advertising not as abrasive • Multiple points of monetization
  40. 40. Lifetime Customer Value (LTV) • Present value of future cash flows from user • What individual user can be expected to pay • Can be aggregated over various dimensions (demographic characteristics / early user behavior) • Marketing metric
  41. 41. Misunderstanding LTV Lifetime Customer Value is NOT Linear or Immediate *usually. An LTV evolution curve could theoretically be linear.
  42. 42. Misunderstanding LTV Lifetime Customer Value is NOT Linear or Immediate *usually. An LTV evolution curve could theoretically be linear.
  43. 43. Misunderstanding LTV Lifetime Customer Value is NOT Linear or Immediate *usually. An LTV evolution curve could theoretically be linear.
  44. 44. v QUESTIONS? •••

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