Founder labs new york may 2011
 

Founder labs new york may 2011

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The entry lecture for the New York edition of Founder Labs - it's an evolution of the deck that was presented in Q1 in San Francisco, with more details on business models, the cloud stack, silicon ...

The entry lecture for the New York edition of Founder Labs - it's an evolution of the deck that was presented in Q1 in San Francisco, with more details on business models, the cloud stack, silicon evolution and on Apple's retail stores.

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Founder labs new york may 2011 Founder labs new york may 2011 Presentation Transcript

  • Founder LabsNYC EditionThe Mobile EcosystemMay 21, 2011 Licensed under Creative Commons Attribution 3.0 Unported License (http://www.creativecommons.org/licenses/by/3.0) You are free to Share or Remix any part of this work as long as you attribute this work to SF Mobile (sfmobile.org)
  • @l1rs Work Network Lars Kamp Lars Kamp Management Consulting Suite 1200 560 Mission Street San Francisco, CA 94105 San Francisco, CA 415.894.5423 415.894.5423 lars.kamp@accenture.com www.sfmobile.org lars@sfmobile.org2
  • Companies.3 View slide
  • Today’s topics. History Mobile Economics Silicon Cloud What’s Next?4 View slide
  • A note on people’s ability to predict the future. ”People tend to overestimate what can be done in one year and to underestimate what can be done in five to ten years.” J. C. R. Licklider, 1965 J. C. R. Licklider “Grandfather of the Internet”5
  • History6
  • We’re in NYC, but here’s a bit of Silicon Valley History: General Magic, Apple spin-off, 1990. General Magic Mission Statement, May 1990 “We have a dream of improving the lives of many millions of people by means of small, intimate life support systems that people carry with them everywhere. These systems will help people to organize their lives, to communicate with other people, and to access information of all kinds. They will be simple to use, and come in a wide range of models to fit every budget, need, and taste. They will change the way people live and communicate.”7
  • General Magic’s “Magic Cap”. “Magic Cap” User Interface, 19948
  • Three people from the team that architected Magic Cap. Andy Rubin Tony Faddel Kevin Lynch9
  • General Magic’s lasting influence on Android… “Magic Cap” UI, 1994 G1 “HTC Dream” UI, 200810 Source: Wired, Accenture analysis.
  • Google is iterating Android at a breathtaking pace…History of Android July 2005 Oct 2008 Apr 2009 Android acquired after Android Market Android Andy Rubin meets with announced. SDK Larry Page for support. First device. released 2005 2007 2008 2009 2010 2011 2012Sept 2003Androidincorporated. … C D E F G H I … Nov 2007 OHA founded. April Sept Oct May Dec Mar H2Android uses Google 2009 2009 2009 2010 2010 2011 2011as default search “Android” platform unveiled. Cupcake Donut Éclair FroYo GiBr HoCo ICengine. v1.5 v1.6 v2.0 v2.2 v2.3 v3.0 v3.111 Source: Google, Accenture analysis.
  • … including one OEM and SemiCo at a time. Android Release C D E F G H I April Sept Oct May Dec Mar Nov 2009 2009 2009 2010 2010 2011 2011 Cupcake Donut Éclair FroYo GiBr HoCo IceCrm v1.5 v1.6 v2.0 v2.2 v2.3 v3.0 v3.1 “Hero” Device ? HTC Samsung Motorola HTC Samsung Motorola Nexus Dream Behold II Droid Nexus One Nexus S Xoom 3 Chip Qualcomm Qualcomm TI OMAP Qualcomm Intrinsity NVIDIA MSM7201A MSM7201A 3430 QSD8250 S5PC110 Tegra 2 250 ? 528MHz 528MHz 600 MHz 998MHz 1,000MHz 1,000MHz12 Source: Accenture analysis.
  • Economics13
  • Software-driven innovation. ” The problem is, in hardware you cant build a computer thats twice as good as anyone elses anymore. […] But you can do it in software.” Steve Jobs, 1994 Steve Jobs Apple Founder & CEO (on leave), in 1994 Rolling Stone interview14 Source: Rolling Stone Magazine.
  • Mobile is the single biggest global distribution platform. PC TV Mobile PC Installed Base TV Households Mobile Subscribers 2009 2009 1.2 Billion 1.3 Billion 2009 4.0 Billion 2013 2013 1.6 Billion 1.33 Billion Broadband Pay TV Subscribers Subscribers 2009 2009 420 Million 600 Million 2013 5.5 Billion 2013 2013 648 Million 739 Million15 Source: Gartner, PWC, ITU, IDC, Accenture analysis.
  • Evolution of “the stack”: Shift from hardware to software. Mobile Device Stack Early days Today Comms User Interfaces, App Stores & Shell & UI e.g. USB, Speaker, Flash Card Software User Software External Interfaces, Application Middleware Middleware Phone Middleware Hardware Platform / OS Core Operating System Chipsets, Hardware Processors, Basebands 1-2 MB of >1 GB of open closed software software Hardware Software16 Source: Accenture analysis.
  • Value in mobile has moved up the stack… DIRECTIONAL Cost to Per-unit Break-even Mobile Handset Stack & Elements build ($M) Revenue ($) # of units Services and Content $0.1M $1.00 0.1M Screen, User Interfaces, e.g. USB, Speaker, Flash Card User Software $10M $0.10 100M Value Flow Application External Interfaces, Middleware Device Middleware Core Operating System $2,000M $10.00 200M Chipsets, Processors, Radio Basebands Hardware Software17 Source: Estimates based on industry interviews; see David Wheeler “Linux Kernel 2.6: Its Worth More!” for estimating the cost of the Linux Kernel.
  • … and is fueling the app store economy: ~350,000 apps. ESTIMATES Catalog Size – Apple App Store vs. Android Market 2008-2011, by Number of Available Apps at End of Quarter 350,000 300,000 310,000 250,000 225,000 200,000 149,000 130,000 97,000 74,500 52,610 56,200 35,200 25,300 20,100 13,200 5,200 11,500 740 4,400 600 2,900 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Source: Apple press releases & earnings calls, Google, AndroLib, PCWorld, Distimo, Accenture analysis. Catalog size for Apples excludes18 books. All numbers rounded.
  • The “early days” with iOS & Android: A mobile revolution. App & Mobile Web Usage Growth over 2 Years, US Ads Requested, April 2008 – March 2010 4,000 3,500 3,000 55% of Ads Requested (Millions) 2,500 Growth 2,000 1,500 41% of 1,000 Growth 500 0 RIM Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Others incl. Palm & Windows19 Source: AdMob, Accenture analysis.
  • But: An app is not a business model. Retention Rates of Mobile Apps Over Time, 2010 100% 100% 100% 100% 90% 90% 90% 90% 80% 80% 80% 80% 70% 70% 70%Retention Rate 70% 60% 60% 60% 60% 50% 50% 50% 50% 40% 40% 40% 40% 30% 30% 30% 30% 20% 20% 20% 20% News (9.1%) 10% 10% News (9.8%) 10% 10% Enter- Games (2.4%) tainment (2%) 0% 0% 0% 0% 0 0 30 30 60 60 90 90 120 120 150 150 180 180 0 0 30 30 60 60 90 90 120 120 150 150 180 180 Days After First Measurement Days After First MeasurementSource: Flurry, Accenture analysis. User retention defined by the number of users who downloaded an application and launched the application at any time in the past, and also launched the app within the last seven days, e.g. "30 days ago" represents any new user that launched a given app in January and also again within the last seven days. "60 days ago" represents new users identified in December and also used within last 7 days. Sample based on relevant 5-6 apps per 20 category with at least 120 days of data availability in the Flurry system.
  • 90% dead after 90 days. iPhone App Retention Android App Retention As of January 2010, by Application Category As of January 2010, by Application Category 30 Days 90 Days 30 Days 90 Days News 52% 20% 58% 18% Social 40% 9% 38% 5% Networking Games 34% 10% 34% 10% Lifestyle 35% 9% 38% 7% Enter- 33% 4% 42% 16% tainment Average Retention 39% 10% 42% 11% Rates21 Source: Flurry, Accenture analysis.
  • Enter analytics…22
  • … and push notifications.23
  • Emergence of solid mobile business models. Location Inventory Discounts Transparency Reviews Finds deals at local Real time visibility Real-time Compare local “Crowd-source” retailers of into restaurant discounts on local price with best reviews before national chains “inventory” merchant offers prices on the web buying decision24
  • Groupon Merchants App – turning smartphones into a PoS.25
  • Opportunities of unparalled scale if you figure it out. “Mobile is clearly becoming a new way people shop. [eBay has] nearly tripled mobile GMV (gross merchandise value) year-over-year to nearly $2B, with strong holiday shopping momentum in Q4. In 2011, we expect Mobile GMV to double to $4B.“ John Donahoe, CEO Ebay Q4’10 Earnings Call26 Source: Ebay.
  • And you ain’t seen nothin’ yet. (1 of 4) Global Mobile Shipments 2005-2015E, Millions ‘10 –’15 2,500 CAGR Total 2,076 8.4% 1,971 Devices 2,000 1,854 1,718 1,557 Smart 820 926 1,500 1,389 707 Phones 25.0% Millions 582 1,188 1,190 453 1,128 303 1,002 124 151 1,000 173 833 82 57 1,064 1,085 1,105 1,135 1,147 1,151 1,150 Non 500 1,039 954 1.2% 920 SPs 777 0 2005 2006 2007 2008 2009 2010 2011 E 2012 E 2013 E 2014 E 2015 E SP Share 7% 8% 10% 13% 15% 22% 29% 34% 38% 42% 45% of Total27 Source: IDC Accenture analysis.
  • A quick note on hardware and distribution thereof.28
  • 26,500 Apple retail employees selling your HW to 250M+ annual visitors in 323 stores in 11 countries. New York Paris Tokyo Sydney Munich Shanghai29 Source: Apple.
  • The Apple Store: $13B in sales, with more $/SqFt/Year than Tiffany & Co. Scale of Retail Operations Retail Revenue Metrics Q3 FY2010 – Retail Retail Retail FTEs / $ / SqFt / Year $ / employee / $ / Day / Store $ / Store / Year Q2 FY2011 Revenue Stores Space part-time ($) Year ($K) ($K) ($M) ($B) (#) (M SqFt) employees (K) 13 323 2.5 30 $4,793 $397 $102 $37 $3,010 $337 $36 $13 3.1 233 1 9 $866 $279 $33 $12 50.3 4,172 58 180 $425 $200 $128 $47 419 8,970 985 2,100 $391 $179 $125 $46 9.3 204 23.8 5230 Source: SECfilings, Accenture analysis.
  • 2 platforms you absolutely need to understand: Silicon & Cloud ”In addition to making raw computer power available in a convenient economical form, a computer utility would be concerned with almost any service or function which could in some way be related to the processing, storage, collection and distribution of information.” Douglas Parkhill, 196631
  • Silicon32
  • Moore’s Law – since ~1965 on the desktop.33 Source: Intel.
  • Coming your way in mobile as well. Baseband Processor “Fat Modems” Baseband & Application (aka Modem) Processor Low power silicon for OS-enablement of light High performance, low voice/SMS and long apps running on top power application battery life. of baseband. processors.34
  • Massive on-deck computing power for smartphones... 1966 2011 2016 Apollo Guidance Samsung Era of Computer – Block I Galaxy S2 “Uberphones” 4,100 Integrated Circuits ~26M ICs ~1B ICs 1 MHz Clock Speed 1 GHz 1GHz+ 9 KB RAM 512 MB ~4 GB35 Source: Computer History Museum, Accenture analysis.
  • … driven by one company in the UK.36
  • Orders of magnitude jump in processing power since 2007. HIGHLY SIMPLIFIED ARM Family ARM11 Cortex Shipment Date 2007 2009 2010 2012 Chip ARM1136 Cortex-A8 Cortex-A9 Cortex-A15 DMIPs/MHz 1.2 2.0 2.5 2.5 “Typical” Moore’s Law behavior for x x x x single core Clock Speed 600MHz 1GHz 2GHz 2.5GHz processors = = = = DMIPs/Core 720 2,000 5,000 6,250 Processing Doubles on average Speed Increase ~9x every ~21 months Cores/Cluster 1 1 2 4 x x x x Clusters 1 1 1 4 Theoretical max computing power = = = = increased through multi-core and Total Cores 1 1 2 16 clustering Total DMIPS 720 2000 10,000 100,000 Processing ~138x Speed Increase37 Source: ARM, Accenture analysis.
  • And you ain’t seen nothin’ yet. (2 of 4) Nvidia Tegra roadmap: 2 orders of magnitude until 2014. Today, you are here38 Source: NVIDIA.
  • Early stage mobile development with chipset SDKs.39
  • Cloud40
  • Who is building a cloud? Prineville, OR USA Lockport , NY USA The Dalles, OR USA Maiden, NC USA Morrow, OR USA Dublin, Ireland41
  • What is “The Cloud”? Cluster computing Machine Stack Cloud Benefits • Cost Reduction Lower infra, energy, licen- Distributed Systems Platform Computation sing, maintenance costs Workloads • Speed to Market RDBMS Reduces time required coordinated to pilot projects among many Storage • Elasticity / Scalability machines tied On-demand capacity and together to form a high business agility File System supercomputer • High Performance Computing Cluster Mgmt “Infinite” computing capacity as needed Basically the stuff that makes starting a start-up cheap, quick and agile.42
  • Stuff you can do with the cloud (growing as we speak). ~65 Million ~40,000 Users Searches Gaming Served Per Daily Second ~ 7,000 ~1.2 Million Tweets per Photos Viewed Second Per Second43
  • Stuff you can do with the cloud and your phone.44
  • Industrialization of the mobile cloud... Cloud Device Today HTTP (custom libraries) Tomorrow SDKs45
  • … will bring massive off-deck computing to mobile. Mobile Dev Center Android Project Hawaii & AWS SDKs for Cloud to Device Project Maui on Android & iOS Messaging Framework Windows Phone 746 Source: Corporate websites.
  • And you ain’t seen nothin’ yet. (3 of 4) Google’s Spanner: 107 = 10M machines.47 Source: Google.
  • What’s Next48
  • Jevon’s Paradox ” It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth." William S. Jevons, 1865 William S. Jevons From the Book “The Coal Question”49
  • As computing gets cheaper… U.S. Asset Prices, 1945 - 2008 Normalized, 1995 = 100 105 Normalized Price: 1995 = 100 (log) Computers and Peripheral Equipment 104 103 Transportation 102 Equipment Other Equipment Industrial Equipment 10 1950 1960 1970 1980 1990 200050 Source: The Business Impact of IT, based on U.S. Bureau of Economic Analysis data.
  • … companies consume more of it. U.S. IT Investment, 1970 - 2008 Investment per Employee & Nominal Annual Investment 3,500 350B Anuual Investment per Employee ($) Nominal Anuual Investment ($B) 3,000 300B 2,500 250B 2,000 200B 1,500 150B IT Investment / Employee 1,000 100B 500 Annual 50B Investment 0 0 1970 1975 1980 1985 1990 1995 2000 2005 201051 Source: The Business Impact of IT, based on U.S. Bureau of Economic Analysis data.
  • Plenty of cash. Cash on Hand for Select Tech Titans Cash and Cash Equivalents, as of 1/26/2011 44 39 35 27 29 Total of 22 226B 11 10 7 652 Source: SEC filings.
  • Think again… ”People tend to overestimate what can be done in one year and to underestimate what can be done in five to ten years.” J. C. R. Licklider, 1965 J. C. R. Licklider “Grandfather of the Internet”53
  • Lessons learned. A few thoughts on: Your Team: Who’s in charge? Platform: iOS vs. Android Pitching: Killer exec summary Funding (Angels): Ocean’s 11 Funding (VC): Lots vs. little54
  • And you ain’t seen nothin’ yet. (4/4) Your Start-up!55
  • 56