Accenture - Bubble over Barcelona 2013 MWC - Mobility Trends

Capturing the value of NOW!
Mobile World Congress 2013
Barcelona | 25-28 February

Mobility Trends

Barcelona, February 2013

Lars Kamp

Copyright © 2013 Accenture. All Rights Reserved. Accenture, its logo, and High performance. Delivered. are trademarks of Accenture

Organizers.

Copyright © 2013 Accenture. All rights reserved. 2

Credits
Robin Murdoch
Lisa Maffucci
Philippe Bonneton
Sirish Davuluri
Taylor Gilbert


Agenda
Evolution of Computing Power
Cloud Stacks
Mobile platforms
Connected products
Apps


Computing Power


Evolution of computing devices.
~1 major form factor innovation every decade.

Mainframe
Mini
Computing
Client /
Server
Desktop
Internet
Cloud &
Mobile
Connected
Products ?
IBM 370 DEC VT180 IBM AT PC IBM ThinkPad iPhone & iPad Intelligent
Devices

?
Data Business Process Web Apps Mobile Apps Apps, Open
Management Logic Apps Automation Apps APIs & big
Apps data

1960’s 1970’s 1980’s 1990’s 2000’s 2010’s 2020’s
Computing

Institutional computing Mass market Multi-device computing
Era

One device for many users One device for one user Many devices for one user

Images: Apple.com, Sony.com, IBM.com


The 4 pillars of computing.
Processing Network
$ / GFLOP*, 1961-2015 CAGR, 1961-2015 $ / Mbps*, 1998-2015 CAGR, 1998-2015

-34% -36%
Charts in Logarithmic Scale

1961 1981 2001 2015 2000 2005 2010 2015

Storage Memory
$ / GB*, 1980-2015 CAGR, 1980-2015 $ / MB*, 1970-2015 CAGR, 1970-2015

-39% -37%

1980 1990 2000 2010 2015 1970 1985 2000 2015

Source: DrPeering.net, Matthew Komorowski, John McCallum
Complied and analyzed by Accenture

“Moore’s Law” (1965): Processing
power doubling every ~18 months.
Cramming more components onto
integrated circuits.
With unit cost falling as the number of components
per circuit rises, by 1975 economics may dictate
squeezing as many as 65,000 components on a
single silicon chip

By Gordon E. Moore
Director, Research and Development Laboratories, Fairchild
Semiconductor division of Fairchilde Camera and Instrument Corp.

Electronics, Volume 38, Number 8, April 19, 1965


Moore’s Law applied at Intel: Ever
smaller, faster chips, at less cost.
Evolution of Intel’s Processors,1971-2012

4004 286 Pentium Pentium Core i7
M

1971 1982 1993 2002 2012

Clock Speed 108 KHz 6 MHz 66 MHz 1.7 GHz 3.7 GHz
# of Transistors 2,300 134,000 3,100,000 55,000,000 995,000,000
~$ Price $60 $125 $150 $275 $320
MIPS 0.07 0.9 112 7,400 128,300

Price / MIPS $857 $138 $1.3 $.04 $.002

Source: Intel, Images: anandtech.com, MIPS: Million Instructions per Second.

Moore’s Law applied at Apple: Ever
smaller, faster chips, at less cost.
Evolution of Apple’s Processors, 2010-2012
A4 A5 A5X A6 A6X

March March March September October
2010 2011 2012 2012 2012
Chip Cortex-A8 Cortex-A9 Cortex-A9 SWIFT SWIFT
DMIPS/MHz 2.0 2.5 2.5 3.5* 3.5*
Clock Speed 1GHz 1GHz 1GHz 1.3GHz 1.4GHz
DMIPS/Core 2,000 2,500 2,500 4,550 4,900

Total Cores 1 2 2 2 2
Total DMIPS 2,000 5,000 5,000 9,100 9,800

Source: ARM Company Website, Accenture analyisis.

US Asset Prices
Normalized, 2005 = 100

105

Computers and Peripheral Equipment
104

103

Transportation
Other Equipment
102 Equipment

Industrial Equipment
101
1970 1980 1990 2000 2010

Source: BEA, Compiled and analyzed by Accenture

Enterprise IT Consumption
Annual Investment Nominal Annual
per Employee ($) Investment ($B)
$3,500 $350

$3,000 $300

$2,500 $250

$2,000 $200

$1,500 $150

$1,000 $100

$500 $50

$0 $0
1970 1980 1990 2000 2010
12

Software-to-hardware ratio
US IT Investment
Software-to-Hardware Ratio, 1969-2011
4

3.5

3

2.5

2

1.5

1

0.5
1970 1980 1990 2000 2011


Software-to-hardware ratio
US IT Investment
Software-to-Hardware Ratio, 1969-2011
4
“Wintel” “XaaS”
3.5

3

2.5

2

1.5

1

0.5
1970 1980 1990 2000 2011


Cloud stacks


$B investments into the cloud.
Amazon Google

Morrow, OR USA The Dalles, OR USA

Apple Microsoft

Maiden, NC USA Dublin, Ireland

Copyright © 2013 Accenture. All rights reserved. Images: datacenterknowledge.com, cleantechnica.com 16

Cloud, mobile driving up PP&E spend…
Amazon PP&E Spend CAGR Google PP&E Spend CAGR
USD Millions, per year: ’09 -’12 ‘09-’12 USD Millions, per year: ’09 -’12 ‘09-’12
$3,735 116% $4,018
$3,438 $3,273
60%

$1,811

$979
$810
$373

2009 2010 2011 2012 2009 2010 2011 2012

Apple PP&E Spend Microsoft PP&E Spend
USD Millions, per year: ’09 -’12 USD Millions, per year: ’09 -’12

$8,295 $3,119
94%
$2,355 $2,305
$1,977 -10%
$4,260

$2,005
$1,144

2009 2010 2011 2012 2009 2010 2011 2012
Source: Company 10Ks, Compiled and analyzed by Accenture

…followed by M&A.
Amazon M&A Spend CAGR Google M&A Spend CAGR
USD Millions, per year: ’09 -’12 ‘09-’12 USD Millions, per year: ’09 -’12 ‘09-’12
$745 165%
$705 $10,568 361%

$352

$1,900
$40 $1,067
$108

2009 2010 2011 2012 2009 2010 2011 2012

Apple M&A Spend Microsoft M&A Spend
USD Millions, per year: ’09 -’12 USD Millions, per year: ’09 -’12

$638
$10,112
127%

$350
$244

$868
$0 $245 $71

2009 2010 2011 2012 2009 2010 2011 2012
Source: Company 10Ks, Compiled and analyzed by Accenture

19

Cloud Dev
Cloud Services Dev

App Dev
Marketplace
Storage
Search
Mapping
Comms
Media
Semi IP
H/W Design
OS
Browser
(3rd Py Device)
Apps
Platforms Device
Logical stack.

(3rd Py Device)

Copyright © 2013 Accenture. All rights reserved.
Browser
Apps
TV Device
Phone
Tablet
PC

Positioning at start of 2008.
Platforms Device Cloud Services Dev

(3rd Py Device)

(3rd Py Device)

Marketplace
H/W Design

Cloud Dev
TV Device

Mapping
Browser

Browser

App Dev
Storage
Comms
Semi IP

Search
Phone
Tablet

Media
Apps

Apps

OS
PC

Source:: Corporate websites. Compiled and analyzed by Accenture

Positioning at start of 2010.

(3rd Py Device)

(3rd Py Device)

Marketplace
H/W Design

Cloud Dev
TV Device

Mapping
Browser

Browser

App Dev
Storage
Comms
Semi IP

Search
Phone
Tablet

Media
Apps

Apps

OS
PC

Source:: Corporate websites. Compiled and analyzed by Accenture.

Today: Vertical integration.

(3rd Py Device)

(3rd Py Device)

Marketplace
H/W Design

Cloud Dev
TV Device

Mapping
Browser

Browser

App Dev
Storage
Comms
Semi IP

Search
Phone
Tablet

Media
Apps

Apps

OS
PC

Source:: Corporate websites. Compiled and analyzed by Accenture.

Cloud-to-mobile instrumentation.

Cloud Device

Yesterday
HTTP
(custom libraries)

Today
SDKs, APIs
Open Source

Images: Samsung, Accenture analysis.

Backend-as-a-Service.

Images: Samsung, Accenture analysis.

Commerce w/o a single line of code.
Urban Airship Pass Builder for Apple Passbook

Images: Urban Airship.

Real-time performance monitoring.
Crittercism visualization of app usage data.

Images: Techcrunch.

Cloud efficiency: development
Users to
Users Engineers Engineers

1,139M ~11.5K 98K

901M ~900 1M

90M 6 15M

Source: Corporate websites, Accenture estimates. Directional estimates for mid 2012.
Copyright © 2013 Accenture All rights reserved. 27

Amazon AWS S3 traffic.
S3 Pricing vs. Objects Stored
2007-2012, USD Millions
Amazon S3 pricing Number of objects in S3
($/GB/Month) (Billions)
$0.16 1,400
$0.15 12.3B
$0.15 1,200

$0.14
1,000
$0.13
800
$0.12
600
$0.11
400
$0.10

$0.09 200
$0.09
14.0B
$0.08 0
2007 2008 2009 2010 2011 2012

Source: Amazon AWS Blog, Compiled and analyzed by Accenture

Amazon AWS revenue.
Amazon “Other” Revenue, Includes AWS
2006-2012, USD Millions
$2,500 2351

DB as a
$2,000 Service

$1,500 1431
Platform as a
Service
$1,000
827

550
$500
449
264 327 Storage as a
Service
Computing as a
$0 Service
2006 2007 2008 2009 2010 2011 2012

Source: Amazon 10K, Compiled and analyzed by Accenture; “Other” includes AWS

Amazon stack.

Apps

Devices

Cloud
Services

Platforms


The efficiency of Amazon’s stack.

Revenue ($B) Employees (K) Annual Revenue
TTM 2013 Dec 2012 per Employee

60 52 ~$1,200K

50 167 ~$300K

Source: SEC Filings, Accenture analysis. All numbers are rounded.

Mobile Platforms


Android
History of Android

July 2005 Oct 2008 Apr 2009
Android acquired Android Market Android
by Google announced. SDK
“G1” released

2003 2005 2007 2008 2009 2010 2011 2012

… C D E F G H I J …
Sept 2003 Nov 2007 April Sept Oct May Dec Mar Oct H1
Android OHA founded. 2009 2009 2009 2010 2010 2011 2011 2012
incorporated. “Android” Cupcake Donut Éclair FroYo GiBr HoCo IC JB
platform v1.5 v1.6 v2.0 v2.2 v2.3 v3.0 v4.0 V4.1
“Astro” & “Bender” unveiled. V4.2


…with rapid ecosystem adoption.
One OEM and SemiCo at a time

Android
Release E F G H I J K
Oct 2009 May 2010 Dec 2010 Mar 2011 Oct 2011 H1 2012 Jan 2013
Éclair FroYo GiBr HoCo IceCrm JB KLP
v2.0 v2.2 v2.3 v3.0 v4.0 V4.1/V4.2 V5.0

“Hero”
Device
HTC Samsung Motorola HTC Samsung Motorola Samsung Asus
Dream Behold II Droid Nexus One Nexus S Xoom Galaxy Nexus Nexus 7

Chip
Qualcomm Qualcomm TI OMAP Qualcomm Intrinsity NVIDIA TI OMAP NVIDIA
MSM7201A MSM7201A 3430 QSD8250 S5PC110 Tegra 2 250 4460 Tegra 3
528MHz 528MHz 600 MHz 998MHz 1,000MH 1,000MHz 1,200MHz 1,500MHz
z


Android code base.
From 4.1M to 15.2 lines of code in 3 years
25

20

15
Lines of Code

10

5
Comments

Blanks
0
Jan '09 Jul '09 Jan '10 Jul '10 Jan '11 Jul '11 Jan '12 Jul '12
Source: Ohloh.net, Accenture analysis

… activating ~1.65M devices per day.

1650
1500
1420
1300
1100
1000
900
880
870
850
850
730
700
675
650
625
600
550
500
400
375
350
325
300

Source: Google, estimates. Compiled an analyzed by Accenture.

Global Internet Traffic, 2008 - 2012
Desktop vs. Mobile
CAGR
’08 Q4-’12 Q4
100%
1% Mobile 12% 112%

95%

90%

99% Desktop 88% -3%
85%

80%

75%
2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4
Source: StatCounter; Compiled and analyzed by Accenture

India Internet Traffic, 2008 – 2012
Desktop vs. Mobile
100% 98%

90%

80%
CAGR
70% ’08Q4-’12Q4
60%
53% Mobile 125%
50%

40%
47% Desktop -17%

30%

20%

10%
2%
0%
2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4

Source: StatCounter; Compiled and analyzed by Accenture

Android running on more than “just”
smartphones and tablets.

HTC Dream Favi Pico Samsung Lenovo K91 Panasonic
Mobile Phone Projector Refrigerator Smart TV Rice Cooker

2008 2009 2010 2011 2012 2013

Samsung Parrot Asteroid Sony Galaxy
Galaxy Tab Car Stereo SmartWatch Camera

Images: android.com, samsung.com, parrot.com, favientertainment.com, touchrevolution.com, sony.com, htc.com, CES.com,
The Android robot is reproduced or modified from work created and shared by Google and used according to terms described in the Creative
Commons 3.0 Attribution License.

Cloud-to-mobile delivered.
“The Kindle is a service, not a device. ‘Amazon’s iTunes’ is made to
acquire customers and build up an ecosystem. We want to make money
when customers use our device, not when they buy it.”
Jeff Bezos, Amazon CEO

November 2011
Cost to build: $210
Selling Price: $199

Source: iSuppli

Amazon digital vs. physical sales.

Amazon Press Event
September 2012

Amazon Kindle Kindle Fire
released released
Nov. 2007 Nov. 2011

Source: The Verge, Amazon Press Event

Kindle #1 in Terms of Growth in 2013
Growth in Tablet Share Post Holiday Season
%, January 2013

Kindle Fire 3.03%

Samsung Galaxy 1.38%

Google Nexus 0.92%

Microsoft Surface 0.17%

-0.02% BlackBerry Playbook

-7.14% iPad
-8% -6% -4% -2% 0% 2% 4%
Source: techfever.net, Compiled and analyzed by Accenture

Amazon vs. NASDAQ Composite
1 year 2012 - 2013
150 Amazon 144

140

130

120

110

NASDAQ 117
100 Composite

90

80
1/3/2012 1/3/2013
Source: finance.google.com, Compiled and analyzed by Accenture

2 years 2011 - 2013
150

Amazon 138
140

130

120

110

100
NASDAQ 108
Composite
90

80
1/3/2011 1/3/2012 1/3/2013

5 years 2008 - 2013
290 Amazon 271

240

190

140

90 NASDAQ 119
Composite

40
1/3/2008 1/3/2009 1/3/2010 1/3/2011 1/3/2012 1/3/2013

Hardware
& Accesories

“User-to-device” ratio.
1 Device, 4 Users 1 User, 4 Devices

Source: Images: press.xbox360.com, screenshot of Apple iOS6 “Bluetooth” screen .

Images: 02/15/2013 screenshot of store.apple.com/us/browse/home/shop_ipad/ipad_accessories/app_enabled

Interface and sensor technology.
Interface Trends Sensor Trends
Wired

Proprietary
USB Mini-HDMI Audio Port Sensor Component Cost
Connectors Legend: 2015 2011
2011-2015, USD
$1.80
$1.50
Wireless

-33% $1.20 $1.25
$1.00 -33%
-44%
-17%
NFC Bluetooth Wi-Fi ANT+ -15%
$1.20
$0.85 $1.00 $1.00
$0.70

Temp Acceler- Camera Mic GPS
Thin Air

ometer


Connected product components.
UI & Cloud-to- Big Data/
Hardware OS
Applications device Metering


Radically different lifecycles.
UI & Cloud-to- Big Data/
Hardware OS
Applications device Metering

1-2 6-12 2-6 4-12 4-12
years months months weeks weeks


The Nest Thermostat.
UI & Big Data/
Hardware OS Cloud Service
Applications Metering

Images: Nest.com/about, aws.amazon.com

Looks easy, right?

Images: Nest.com/about,

Highly complex product lifecycle.

1.1.3

1.0.1

2.1.0

3.0.0
1.0.1
1.1.0

1.1.1

2.1.3

3.0.0
3.0.1
2.0
2.0
Mobile
App

INTERNAL
1.1.1
1.1.2
1.1.3

2.1.3

3.0.1
3.0.2

3.0.3

3.0.4
3.0.5
1.01
1.02

1.04

1.06

1.2
2.0

2.1

3.0
Firm-
1

ware

Diamond 1.10 Diamond 1.12 Display 2.6
Hard-
ware

Android 4.0 4.1 4.2
release

EXTERNAL
iOS 5 5.0.1 5.1 5.1.1 6
release

3rd Party API
releases

Q4’11 Q1’12 Q2’12 Q3’12 Q4’12
54

3rd Party APIs
Nike+ Fuelband iOS app launch sequence

1
2

3

4

1 Third-party app crash tracking API

2 Nike+ user metric tracking API

3 Nike.com app content API

4 Youtube video content

Images: youtube.com, nike.com, crittercism.com
55

Pervasiveness of APIs.
API Calls Found in the 2012 Top 10 iOS Apps (Free, Paid, Top Grossing)

CRM/
Analytics Debugging Ad networks Cloud Social SDK Other
notifications


Consumers not easy to please.

N/A


Apps


eBay’s evolution
Then… Now… Tomorrow
eBay Website eBay & PayPal Apps X.Commerce
Platform

X.Commerce Platform

From Internet, To mobile and To Platform-as-a-
Auction apps Service


In 2012…
Mobile commerce volume grew more than 120% to $13B to
account for 19% of all of eBay’s Marketplaces revenue

eBay’s suite of mobile applications attracted 4M new users with a revenue
per user of $325K
eBay celebrated their 100 millionth app downloaded in September

eBay’s mobile apps were available in 190 countries in 8 languages

The number of dollars spent every second through mobile purchases was
$275 in July

The number of new listings added via eBay mobile per week was 1.9M
Source: eBay SEC Filings and earnings calls; GMV: Gross Merchandise Value; TPV: Total Payment Volume

PayPal
In 2012…

PayPal processed $14B in mobile transactions, exceeding their
growth expectations by $4B and growing 250% since 2011

PayPal processed 692 mobile transactions between October and
December with 5,223 payments happening every minute

PayPal grew to have 123M active accounts. More accounts were accep-ted
in the last three months of FY12 than an entire quarter in the past 8 years

PayPal signed a deal with Discover that will enable 7M brick and mortar stores in the
US to accept PayPal as a form of payment in 2013

Source: eBay SEC Filings and earnings calls,

eBay restructuring for mobile.

Anti-fraud Barcode-scanning Mobile, location Mobile, social PayPal SDK
January 2008 mobile app app app July 2012
June 2010 April 2011 April 2012

2008 2009 2010 2011 2012 2013

Payment technology Mobile app developer Mobile payments Mobile payments
December 2008 December 2010 April 2011 July 2011

Source: Crunchbase, Compiled an analyzed by Accenture

Platform model.
From point-to-point … to a reusable model through
integration… exposure of APIs

Merchants Capabilities Merchants Capabilities
…

…

…

…

Growth driven by mobile.
“Mobile continues to rewrite the commerce playbook, and we continue to
be a mobile commerce and payment leader.”
– John Donahoe, eBay, CEO, January 2013

eBay Marketplaces GMV PayPal TPV
USD Billions, per year: ’09 -’12 CAGR USD Billions, per year: ’09 - ‘12 CAGR
’09 -’12 ’09 -’12

$48 $54 $60 $68 = 100% 12% $72 $92 $119 $145 = 100% 26%
1 2 5 0 1 4 14 Mobile
13 Mobile 165% 312%

48 52 71 91 115
55 131 Desktop 22%
55 Desktop 5%

2009 2010 2011 2012 2009 2010 2011 2012
Mobile Share Mobile Share
1.4% 4% 8% 19% >1% >1% 3% 10%
of GMV of TPV
Source: eBay SEC Filings and earnings calls, Accenture analysis; GMV: Gross Merchandise Value; TPV: Total Payment Volume

eBay vs. NASDAQ Composite
5 years 2008 - 2013
170
Ebay 160

150

130

110

NASDAQ
90 Composite 119

70

50

30
1/3/2008 1/3/2009 1/3/2010 1/3/2011 1/3/2012 1/3/2013
Source: finance.google.com

2 years: 2011 - 2013
160
Ebay 156

150

140

130

120
NASDAQ
Composite 130
110

100

90

80
1/3/2011 1/3/2012 1/3/2013
Source: finance.google.com

Disruption


Thank you!


Rights to trademarks referenced herein, other than
Accenture trademarks, belong to their respective
owners. We disclaim proprietary interest in the marks
and names of others."


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