Q4 CEO Dinner 2011                 A Discussion on the “Mobile Internet”                 December 1st, 2011               ...
A Massive Shift Underway…CONFIDENTIAL                2
“First Inning” Driven By Games and SocialCONFIDENTIAL                                3
Where the Time is Being Spent• Significant time spent on “existing” brand names from the PC web, with  notable exceptions ...
iOS / Android Comparison                               iOS     AndroidSales to date (all       265m        200m        Dev...
US Install BaseCONFIDENTIAL      6
Mobile Device/OS IP Wars: The Basics                                    Event                                             ...
Global Market: Center of Gravity is Changing FastCONFIDENTIAL                                        8
China is leading the ChangeCONFIDENTIAL                  9
China By The Numbers 900m          wireless               subscribers           250m   Weibo (twitter)                    ...
Where the Money Is (Revenue / 2014)CONFIDENTIAL                          11
Where the Investment $’s Have Gone       Many unfunded       players here                                     Sector      ...
$1.1Bn Invested Since 2010Q1, 70% in the Last 9 Mos. CONFIDENTIAL                                          13
Financing Highly Correlated with Rise of Smartphones CONFIDENTIAL                                          14
Where Do We Go From Here?•      Continued rise / impact of Android•      Importance of iOS / the App Store / etc.•      Ge...
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GGV Q4 2011 Mobile Internet Discussion

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GGV Capital Q4 2011 CEO Dinner Mobile Web discussion document

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GGV Q4 2011 Mobile Internet Discussion

  1. 1. Q4 CEO Dinner 2011 A Discussion on the “Mobile Internet” December 1st, 2011 @ggvcapitalCONFIDENTIAL 1 CONFIDENTIAL ©2011 GGV CAPITAL
  2. 2. A Massive Shift Underway…CONFIDENTIAL 2
  3. 3. “First Inning” Driven By Games and SocialCONFIDENTIAL 3
  4. 4. Where the Time is Being Spent• Significant time spent on “existing” brand names from the PC web, with notable exceptions in games and mCommerce Top Free iOS Apps by Category (9/2011) Top 10 Most Used Android Apps (7/2011) Social Android Market • Facebook Google Maps • Twitter Entertainment Gmail • Skype • Crackle Facebook • LinkedIn • Netflix Google Search • FB Messenger • Redbox YouTube News • IMDb Adv Tak Killer Free • CNN • HBO GO Angry Birds • Fox • Hulu+ QuickOffice Pro • ABC Pandora Radio • Yahoo News • CNN Int‟l CONFIDENTIAL 4
  5. 5. iOS / Android Comparison iOS AndroidSales to date (all 265m 200m Devicesdevices, oct 2011) • Apple has larger ecosystem, but has not matchedDaily new ~400k ~550k the growth of android lately.sales/activations (nov • Key drivers of this blockage for apple have been2011) carrier exclusivity (now solved), pent up demand for new models, and consumers‟ price sensitivity.US Smartphone Share 27.7% 43.7%(aug 2011) iPhone 4S, Tablets • iOS has always held strong in tablets and isUK Oct S.Ph. Sales 42.8% 35% expected to continue • The iPhone 4S and low cost 4, 3GSs have turnedTablet Sales 80%+ <15% around sales leaderboards for now; wait to see if itDevice configs 7 1000s lasts# of Apps >500k >300k Monetization and Other Android Issues • Developers find it cumbersome to work with% of Free Apps 37% 60% androidDownloads (cum, 18Bn 6Bn • many device configs, OS versionsQ32011) • Despite strong device sales, android users are not monetizing very well:Share of monetization $1.7Bn $102Mn • piracy (53% devs say it‟s a big problem)„10 • malware • crapware (crowding out good apps) • Low WTP of users • Poor payment systems) CONFIDENTIAL 5
  6. 6. US Install BaseCONFIDENTIAL 6
  7. 7. Mobile Device/OS IP Wars: The Basics Event ImpactMarch 2006: NTP settle with RIMM to pay $612m for infringement. This distraction is largely credited with the slowing down of innovation at RIMM and the missing of the smartphone movement.April 2010: HTC signs licensing deal with MSFT. It will pay a per phone This was a defensive move that proved very smart as MSFT hasroyalty. $5/phone is rumored. gone after samsung in a big way.June 2011: Apple settles with Nokia to pay ongoing royalty. Shows that the two agree android is enemy #1. And that even apple can be humbled in this war.July 2011: Nortel Patents Sale to Rockstar Bidco for $4.5Bn Allows all who are not winning from Android to go to OEMs and extract a per device licensing fee, which may make Android6k patents spanning mobile, search and social. AAPL, MSFT, RIMM unprofitable for OEMs and push other OS options. MSFT(770m), ERIC (340m), SNE, EMC. Google bid $900m, but pulled : “no value reportedly demanding $15/phone from Samsung.if all would have access.” Disputes over whether GOOG was bullied.July 2011: Google buys 1030 IBM patents Unknown. Specifics not disclosed.Aug 2011: Google buys MMI for $12.5Bn Largely understood to be a way to beef up the patent portfolio for defensive purposes.Ongoing: Apple and HTC sue each other for infringement Apple showing that it intends to flex muscle and trying to slow-july: apple wins in ITC first round vs HTC adoption of android if possible. Result of an ITC finding can-Aug: HTC counter sues with 3 infringement claims block imports to the US, which can be devastating.-Aug Apple gets Samsung tablets banned in EU, Australia requests sales Counter-suits goal is likely for cross-licensing.figures. Japan in process.Sep 2011: Google gives HTC access to patents to counter sue apple. Google posturing that it will not allow it‟s OEMs or its OS to be bullied out of the game.Q4 2011: Apple and Samsung face off in Germany, NZ, AUS over rightto sell 10” tablets. Varied results. Note: Nortel patents said to span “wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patent portfolios. The extensiveI patentT I A L touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking.” C O N F D E N portfolio 7
  8. 8. Global Market: Center of Gravity is Changing FastCONFIDENTIAL 8
  9. 9. China is leading the ChangeCONFIDENTIAL 9
  10. 10. China By The Numbers 900m wireless subscribers 250m Weibo (twitter) users 350m mobile internet users 812m QQ (chat) users 250m new devices per year 200m Tudou monthly actives 100m Smartphone sales in 2011 120m Combined fans of top 10 weibo users 19% 2011 smartphone penetration 10 Minimum number of SNS sites with 46% >100m users Netizens who access 39% internet ONLY via Users who click on mobile mobile ads 32% Users who‟ve made a mobile purchaseCONFIDENTIAL 10
  11. 11. Where the Money Is (Revenue / 2014)CONFIDENTIAL 11
  12. 12. Where the Investment $’s Have Gone Many unfunded players here Sector $$MM advertising 33 (+ 200) apps general 160.2 Enterprise apps 30 b2b mdm 48.2 backend/platform 138.7 devices 253 digital media 92 gaming 85.2 network equipment 33.5 pymts/commerce 185.3 sms 24.4 voice/data service 56.1 Grand Total 1139CONFIDENTIAL 12
  13. 13. $1.1Bn Invested Since 2010Q1, 70% in the Last 9 Mos. CONFIDENTIAL 13
  14. 14. Financing Highly Correlated with Rise of Smartphones CONFIDENTIAL 14
  15. 15. Where Do We Go From Here?• Continued rise / impact of Android• Importance of iOS / the App Store / etc.• Geolocation• China / Brazil / India• Security / Identity• iPad / tablet cannibalizing PC + Internet browser• Monetization CONFIDENTIAL 15

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