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Audio & AirPods: The First Taste of Transhumanism

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A data-driven look at trends in audio-first hardware and software.

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Audio & AirPods: The First Taste of Transhumanism

  1. 1. 1 Audio & AirPods: the first taste of transhumanism Nick Pappageorge, Senior Analyst at CB Insights
  2. 2. 2 Nicholas Pappageorge A B O U T T H E A N A L Y S T Nick Pappageorge is a senior intelligence analyst at CB Insights, where he produces data-driven research on private market companies' financing, exit, and performance trends across emerging industries – specifically blockchain and IoT. Prior to joining CB Insights, Nick held a research role at MakerBot Industries, a 3D printing company. Nick is a graduate of Hamilton College. Popular analyses by Nick include: Why I’m Closely Watching (/Listening To) The Audio Space Amazon Strategy Teardown Apple Strategy Teardown @NpappaG | npappageorge@cbinsights.com Senior Intelligence Analyst, Frontier Tech
  3. 3. 33 @CBInsights @NpappaG J O I N T H E C O N V E R S A T I O N O N T W I T T E R
  4. 4. 4 W H O W E A R E The technology market intelligence platform. CB Insights software lets you predict, discuss, and communicate emerging technology trends using data in ways that are beyond human cognition. We are a leader in the Expert Automation & Augmentation Software (EAAS) space.
  5. 5. 5 T R U S T E D B Y T H E W O R L D ’ S L E A D I N G C O M PA N I E S “We use CB Insights to find emerging trends and interesting companies that might signal a shift in technology or require us to reallocate resources.” Beti Cung, Corporate Strategy, Microsoft
  6. 6. 6 What We’re Going to Cover Where audio is goingState of audio & airpods How startups fit in 1 2 3
  7. 7. 7 State of audio & AirPods
  8. 8. 8 Podcasting & streaming are mega-trends
  9. 9. 9 Percentage of Americans (12+) listening to podcasts Edison Research & Triton Digital, via a16z 65% of active podcast listeners began in the last 3 years Podcast content is exploding in recent years. 22% of Americans—62M— listened to a podcast in the past week. Among listeners, the average consumption is over 6 hours per week.
  10. 10. 10 Share of top podcast listening apps, Q1’19 Edison Research & Triton Digital, via a16z Spotify & challengers are are getting a foothold on Apple Apple podcasts, once at 80% of podcast listening, has new challengers. Spotify now accounts for 9.5% of listening, more than double where it was 2 years ago.
  11. 11. 1111 “Based on radio industry data, we believe it is a safe assumption that, over time, more than 20% of all Spotify listening will be non-music content. This means the potential to grow much faster with more original programming — and to differentiate Spotify” S P O T I F Y W A N T S O R I G I N A L P R O G R A M M I N G L I K E N E T F L I X Daniel Ek, Spotify CEO
  12. 12. 12 Open secret: AirPods are more monumental than they seem
  13. 13. 13 193 232 215 216 205 186 3 8 14 16 18 12 14 28 50 0 50 100 150 200 250 300 2014 2015 2016 2017 2018 2019 (EST) AirPods will pass 100M sold this year A N E N G I N E F O R D E V I C E S A L E S Source: Loup Ventures via WSJ Global device sales in millions, 2014 – 2019 (estimated) AirPods Watch iPhone
  14. 14. 1414 50M+ units $8B in revenue I N 2 0 1 9 , E S T I M AT E S P E G A I R P O D S S E L L I N G T R A N S L A T I N G T O Source: CB Insights
  15. 15. 15 $8B might not be much for Apple… Source: CB Insights' Consensus Industry Analyst (CIA) estimate A M I L L I O N D O L L A R S I S N ’ T C O O L AirPods $8B
  16. 16. 16 …but AirPods have big adjacent markets Source: CB Insights' Consensus Industry Analyst (CIA) estimate A M I L L I O N D O L L A R S I S N ’ T C O O L $720 M AirPods Wireless Headphones $25.9B Music Streaming $46.8B Podcast Ads Hearing aids $10B $8B $6B Voice assistants
  17. 17. 17 AirPods haven’t exploded past initial hype News mentions 2015 – 2019 YTD (9/17/19) Source: CB Insights U N D E R T H E R A D A R
  18. 18. 18 On earnings calls, Apple is tight-lipped… Apple earnings call mentions Q2’17 – Q2’19 Source: CB Insights Earnings Transcripts W H E R E ’ S T H E L O V E ? Apple TV AR AirPods
  19. 19. 19 …Tim Cook mentions AR and Apple TV far more Apple earnings call mentions Q2’17 – Q2’19 Source: CB Insights Earnings Transcripts N O T O N A P P L E ' S H Y P E T R A I N Apple TV AR AirPods
  20. 20. 20 Where audio is going
  21. 21. 21 AirPods: the first taste of transhumanism
  22. 22. 22 T H E F I R S T TA S T E trans·hu·man·ism /tranzˈhyo͞omənizm/ The belief or theory that the human race can evolve beyond its current physical and mental limitations, especially by means of science and technology.
  23. 23. 23 “We should skip straight to cochlear implants!” Y O U C A N W E A R I T F O R E V E R AirPods are the first consumer gadget that you’d compare to biohacking.
  24. 24. 24 Lo-fi AR or lo-fi Neuralink The ability to wear 5+ hours a day could be remembered as a precursor to brain-machine interfaces.
  25. 25. 25 Pertinent info, just in your ear Instead of a visual interface everywhere you go (like the Magic Leap demo below), voice could offer the same convenience with today’s hardware.
  26. 26. 26 Apple is eying biometrics & accelerometers A patent approved in Q4’18 mentioned accelerometers and GPS to record position and gestures. It also called for biometrics sensors to record perspiration, heart rate, and body temp. CB Insights Patent Tracker G E S T U R E C O N T R O L H E A R T R A T E , T E M P , P E R S P I R A T I O N
  27. 27. 27 When will Apple drop the headset? Different pieces of evidence suggest Apple has been investigating virtual and augmented reality applications for more than a decade. And new revelations suggest Apple may have a standalone AR headset as soon as 2020. However, 2019 has been a rough year for AR startups, with big flameouts from headset makers like ODG, Meta, and Daqri. Could Apple be planning something big in audio in the interim? Acquired Q3’17
  28. 28. 28 “Artificial reality” in audio form Samsung, Snap, HTC, Google’s ARCore, Apple’s ARKit, are allowing developers to unlock new video experiences, as an artificial layer on top of reality. Maybe audio will work similarly.
  29. 29. 29 Audio hasn’t changed yet— it’s the same content
  30. 30. 30 Why audio will transform E NT E R P R I S E Audio hasn’t touched the workplace. S O C I A L N E T W O R K S Audio-first networks are arriving. G O U R M E T I NT E R N E T Audio can cut through the noise. E N G I N E S O F C H A N G E
  31. 31. 31 Audio is coming to the enterprise
  32. 32. 3232 “Audio is on the rise just generally and particularly with Apple and the AirPods, which has been an absolute home run….everybody’s kind of wondering where people are finding the spare time to watch these YouTube videos and listen to these YouTube people in the tens and tens of millions. And the answer is: they’re at work. They have this Bluetooth thing in their ear, and they’ve got a hat, and that’s 10 hours on the forklift and that’s 10 hours of Joe Rogan. That’s a big deal.” I T ’ S A ‘ B I G D E A L’ Marc Andreessen, a16z
  33. 33. 33 Where podcasts are most often consumed, 2018 Source: Edison Research & Triton Digital, via a16z Work is the top location for only 12% of listeners Podcast content is rarely consumed in the workplace. Instead, the majority of listening is done at home or on the move.
  34. 34. 34 Knowledge work is increasingly remote & solo Open offices, remote work, and the solitary nature of knowledge work all benefit from audio.
  35. 35. 35 Social networks are nascent but seem inevitable
  36. 36. 36 On the heels of the Zoom and Slack IPOs, dynamism is in the air. Audio is the glue of nascent social networks Fortnite brought a new form of presence Entrants like TTYL are creating an AIM or Nextel- type network High Fidelity, originally in VR, is making a virtual island for work—using audio headsets S Y N C H R O N I Z E D B R O A D C A S T I S W O R K I N G
  37. 37. 37 Audio can offer ‘gourmet internet’
  38. 38. 38 What does artisanal internet look like? Software has made content cheap and abundant, and the pendulum might swing back. What does the digital paleo diet look like?
  39. 39. 39 Audio can cut through the noise People always want a shortcut to the signal. Inundation of content Knowledge work trending toward creative/open schedules High-throughput learning (2X speed) Deep work movement, RescueTime
  40. 40. 40 The “Her” OS digs into emails M O R E E M O T I O N A L C O M P U T I N G Maybe 10Xing PCs would sooner come from audio than a Minority Report gesture band. Personalities can make us our best selves.
  41. 41. 41 Where startups fit in
  42. 42. 42 Voice is underutilized, but SiriKit isn’t great While it feels inevitable, a Siri-first App Store is far from reality. But iOS 13 added media intents for playback controls in audio apps. P L A T F O R M R I S K
  43. 43. 43 Audio production can improve dramatically Podcasting tools have lots of room to improve. N O M O R E A U D I O P R O B L E M S
  44. 44. 44 Descript builds simple and powerful collaborative tools for new media creators. Descipt also acquired Lyrebird, which made audio editing tools for speech synthesis. S E L E C T I N V E S T O R S Andreessen Horowitz, Redpoint Ventures B L U R R I N G T H E L I N E S B E T W E E N T E X T A N D S P E E C H Funding $20M
  45. 45. 45 Glow offers a way to charge for and distribute premium podcast content that listeners can hear on any app. S E L E C T I N V E S T O R S Greycroft, Nas, Norwest Venture Partners, Revolution A D V E R T I S I N G I S A B I L L I O N - D O L L A R P R O B L E M Funding $2.3M
  46. 46. 46 Voices are getting natural with neural nets FA M G A F O U N D I T S V O I C E Now it’s a matter of delivering smarter content. Amazon is gradually giving Alexa more AI - Fast Company September 26, 2019
  47. 47. 47 How do you make audio a ‘bicycle for the mind’?
  48. 48. 48 Questions? Twitter: @NpappaG npappageorge@cbinsights.com

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