Founder LabsSummer EditionThe Mobile Ecosystem
August 12, 2011
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2
Lars Kamp
www.sfmobile.org
San Francisco, [email protected]
Lars Kamp
Suite 1200560 Mission StreetSan Francisco, CA [email protected]
Work Network
@l1rs
3
Companies.
4
Today’s topics.
Silicon
Mobile Economics
Cloud
What’s Next?
History
5
A note on people’s ability to predict the future.
J. C. R. Licklider“Grandfather of the Internet”
”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
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History
7
A bit of Silicon Valley History:General Magic, Apple spin-off, 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.”
General Magic Mission Statement, May 1990
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General Magic’s “Magic Cap”.
“Magic Cap” User Interface, 1994
9
Three people from the team that architected Magic Cap.
Andy Rubin Tony Faddel Kevin Lynch
10
General Magic’s lasting influence on Android…
“Magic Cap” UI, 1994 G1 “HTC Dream” UI, 2008
Source: Wired, Accenture analysis.
11
Google is iterating Android at a breathtaking pace…
Oct 2008Android Market
announced.First device.
July 2005Android acquired after Andy Rubin meets with Larry Page for support.
2005 2007 2008 2009 20112010
Sept 2003Android incorporated.
Android uses Google as default search engine.
Nov 2007OHA founded.
“Android” platform unveiled.
Apr 2009Android
SDK released
History of Android
D E FC GSept 2009Donutv1.6
Oct 2009Éclair v2.0
May 2010 FroYo v2.2
April 2009
Cupcakev1.5
Dec2010GiBrv2.3
… HMar2011HoCov3.0
…IH2
2011IC
v3.1
2012
Source: Google, Accenture analysis.
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… including one OEM and SemiCo at a time.
D
Sept 2009Donutv1.6
E
Oct 2009Éclair v2.0
F
May 2010 FroYo v2.2
C
April 2009
Cupcakev1.5
G
Dec2010GiBrv2.3
H
Mar2011HoCov3.0
HTC
Dream
Samsung
Behold II
Motorola
Droid
HTC
Nexus One
Samsung
Nexus S
Motorola
Xoom
Android Release
“Hero” Device
Chip
Qualcomm MSM7201A 528MHz
QualcommQSD8250998MHz
IntrinsityS5PC1101,000MHz
NVIDIATegra 2 2501,000MHz
TI OMAP3430600 MHz
Qualcomm MSM7201A 528MHz
Nov2011
IceCrmv3.1
I
?
Nexus
3
?
Source: Accenture analysis.
13
The IP Wars.
Uggh,
FAWK…
I will eat your babies.
Om nom nomnom.
Me too.
14
Silicon
15
Gordon Moore.
16
Moore’s Law – since ~1965 on the desktop.
Source: Intel.
17
Coming your way in mobile as well.
Today, you are here
Nvidia Tegra roadmap: 2 orders of magnitude until 2014.
Source: NVIDIA.
18
Massive on-deck computing power for smartphones...
1966Apollo Guidance
Computer – Block I
4,100 Integrated Circuits
1 MHz Clock Speed
9 KB RAM
2011SamsungGalaxy S2
2016Era of
“Uberphones”
~1B ICs
1GHz+
~4 GB
~26M ICs
1 GHz
512 MB
Source: Computer History Museum, Accenture analysis.
19
Horizontal de-layering of the silicon industry.
19Sources: ARM company website, Cadence company website, Accenture analysis. HW engineers refers to design, SW engineers to validation.Copyright © 2011 Accenture All Rights Reserved.\
Fully Vertically Integrated: Design & Foundry
1970sVertical
Suppliers
ASIC Vendor
System Manufacturer
(Foundry)
1980sASIC
Vendors
Design & Distribution (“Fabless”)
EDA
Foundry
1990sFablessSemis
IP
Design & Distribution
EDA
Foundry
2000sIP-drivenDesign
IP
Design & Distribution
EDA
Foundry
2010sSW-driven
Design
System Porting
“Texas Instruments” “VLSI Technology” “Qualcomm” “ARM” Various
1 : 0 1 : 0.5 1 : 1 1 : 2 1 : 2+RatioHW : SWEngineers
20
ARM vs. QCOM.
20Sources: Google Finance, Accenture analysis.Copyright © 2011 Accenture All Rights Reserved.
0
50
100
150
200
250
300
350
400
450
500
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
ARM announcement that “major OEM” acquired architecture license
in July 2008
QCOM
106 Index
05/12/11
ARM
460 Index
05/12/11
Daily Stock Prices ARM vs. QCOMIndexed, 01/01/2006 – 03/30/2011
21
Apple: A single application processor for all devices.
iPhone
Apple TV Time Capsule ?
iPad
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2 philosophies: Discrete baseband & CPU vs. a single, integrated SoC.
Apple: Discrete BB & CPU HTC: Integrated SoC with BB & CPU
iPhone 4 HD7
Qualcomm Baseband Apple CPU Qualcomm Snapdragon SoC
Physical separation of computing for RF
and applications through different chips
Logical separation of computing for RF and
applications but physically on same chip
23
The likely future, just untethered.
24
Economics
25
Explosive growth for mobility.
“We really see Mobile a bit like Search was in 2001, 2002, 2003. All these formats are so new it is a mistake to say today whatever we have is a good proxy for what the future will look like. I actually have a new metric to report in Android of 550,000 phones activated a day. That's a huge number, even by Google standards.”
Larry Page, Google CEOQ2’11 Earnings Call, July 14th, 2011
“Mobile” quoted 39 times during call “Mobile” quoted 62 times during call
“eBay mobile apps have been down-loaded more than 45 million times [with] $4 billion of volume on eBay Mobile: […] the mobile device is absolutely lowering the boundary or blurring the boundary between online and offline; […] this has created incremental opportunity far greater than what we would've expected.”
Joe Donahoe, eBay CEOQ2’11 Earnings Call, July 20th, 2011
“We were thrilled to sell a record 20.3 million iPhones compared to 8.4 million in the previous June quarter. This represents 142% year-over-year growth. […] iPhone continues to be adopted as the standard across the enterprise with 91% of the Fortune 500 deployed or testing the device, up from 88% last quarter.”
Peter Oppenheimer, Apple CFOQ3’11 Earnings Call, July 19th, 2011
“iPhone” quoted 48 times during call
“We [...] have articulated a very strong innovation-oriented strategy and mobility plays a very strong part in that. […] If you look at our results this quarter you'll see that it's not only the new categories that drive growth for us, it's also the traditional core business of SAP. […] Mobile will change the way we work and the way we live.”
Jim Hageman Snabe, SAP CEOCNBC Interview July 27th, 2011
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Software-driven innovation.
” The problem is, in hardware you
can't build a computer that's twice as
good as anyone else's anymore. […]
But you can do it in software.”
Steve Jobs, 1994
Steve Jobs1994 Rolling Stone interview
Source: Rolling Stone Magazine.
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SW is fueling the app store economy: ~350,000 apps.
Catalog Size – Apple App Store vs. Android Market2008-2011, by Number of Available Apps at End of Quarter
Source: Apple press releases & earnings calls, Google, AndroLib, PCWorld, Distimo, Accenture analysis. Catalog size for Apples excludes books. All numbers rounded.
740 4,400 13,20025,300
52,61074,500
97,000
149,000
225,000
250,000
300,000
350,000
600 2,900 5,200 11,500 20,100 35,200
56,200
130,000
200,000
310,000
Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11
ESTIMATES
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The “early days” with iOS & Android: A mobile revolution.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10
App & Mobile Web Usage Growth, USAds Requested, April 2008 – March 2010
Ads
Req
uest
ed (
Mill
ions
)
32% Monthly Growth
(Nov’08-Mar’10)
19 % Monthly Growth
(Apr’08-Mar’10)
RIM
Others incl. Palm & Windows
Source: AdMob, Accenture analysis.
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But: An app is not a business model.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 30 60 90 120 150 1800%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 30 60 90 120 150 1800%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 30 60 90 120 150 180Days After First Measurement
Ret
entio
n R
ate
News (9.1%)
Games (2.4%)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 30 60 90 120 150 180
News (9.8%)Enter-tainment (2%)
Days After First Measurement
Source: 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 category with at least 120 days of data availability in the Flurry system.
Retention Rates of Mobile Apps Over Time, 2010
30
90% dead after 90 days.
52%
40%
34%
35%
33%
20%
9%
10%
9%
4%
58%
38%
34%
38%
42%
18%
5%
10%
7%
16%
iPhone App RetentionAs of January 2010, by Application Category
30 Days 90 Days
Android App RetentionAs of January 2010, by Application Category
News
Social Networking
Games
Lifestyle
Enter-tainment
30 Days 90 Days
39% 10% 42% 11%Average
Retention Rates
Source: Flurry, Accenture analysis.
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Enter analytics…
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… and push notifications.
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Facebook: Putting a social layer into your app.
News and Media Companies Commerce and Sales Companies
90% more articles are read85% more time is spent
4x increase in traffic from Facebook
8 minutes longer on site22% more pages are read
$5.30 of direct ticket sales resulted from sharing links
57% more money spent per user
40% increase in referral traffic from visitors
Increase in traffic and time spent on websites through
“Login with Facebook”
Increase in sales through user of social plugins:
“Like” and “Share”
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Emergence of solid mobile business models.
Location DiscountsInventory Transparency Reviews
Finds deals at local retailers of
national chains
Real time visibility into restaurant
“inventory”
Real-time discounts on local merchant offers
Compare local price with best
prices on the web
“Crowd-source” reviews before buying decision
35
Ephemeralization: “Progressively accomplishing more with less”
Buckminster Fuller
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Early “ephemeralization” aka “appification”: Devices are being replaced by apps.
Copyright © 2011 Accenture All Rights Reserved.
2006 2011 and Beyond
Camera “Camera”
Credit Card Payments
MP3 Player Music
TV Video
Phone Voice
37
Software “eating” people and things.
People Things
Taxi Dispatcher ATMs Keys
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And it’s only the beginning.
Global Mobile Shipments2005-2015E, Millions
Total Devices
Mill
ions
777920
1,064 1,039 9541,085 1,105 1,135 1,147 1,151 1,150
57
82
124 151173
303453
582707 820 926
833
1,0021,188 1,190 1,128
1,389
1,5571,718
1,8541,971
2,076
0
500
1,000
1,500
2,000
2,500
2005 2006 2007 2008 2009 2010 2011 E 2012 E 2013 E 2014 E 2015 E
SP Share of Total
7% 8% 10% 13% 15% 22% 29% 34% 38% 42% 45%
‘10 –’15 CAGR
8.4%
SmartPhones 25.0%
NonSPs
1.2%
Source: IDC Accenture analysis.
39
Mobility hardware:This morning at Coupa Café in Palo Alto: “Bump Cube”
40
A quick note on distribution of mobility hardware.
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26,500 Apple retail employees selling your HW to 250M+ annual visitors in 323 stores in 11 countries.
Source: Apple.
New York Paris Tokyo
Sydney Munich Shanghai
42
The Apple Store:$13B in sales, with more $/SqFt/Year than Tiffany & Co.
Source: SECfilings, Accenture analysis.
$4,793
$3,010
$866
$425
$391
Retail Revenue
($B)
Retail Stores
(#)
Retail Space
(M SqFt)
FTEs / part-time
employees(K)
13 323 2.5 30
3.1 233 1 9
50.3 4,172 58 180
419 8,970 985 2,100
9.3 204 23.8 52
$397
$337
$279
$200
$179
$102
$36
$33
$128
$125
$ / SqFt / Year ($)
$ / employee / Year ($K)
$ / Day / Store($K)
$ / Store / Year($M)
Scale of Retail Operations Retail Revenue Metrics
Q3 FY2010 –Q2 FY2011
$37
$13
$12
$47
$46
43
Cloud
44
Who is building a cloud?
Prineville, OR USA The Dalles, OR USA
Maiden, NC USA Dublin, Ireland
Lockport , NY USA
Morrow, OR USA
45
Stuff you can do with the cloud (growing as we speak).
~65M+ Users Gaming Daily
~ 7,000+ Tweets per Second
~50,000+ Searches Served Per Second
~41B API Callsper Day
46
Stuff you can do with the cloud and your phone.
47
Industrialization of the mobile cloud...
Today
Tomorrow
HTTP(custom libraries)
SDKs
Cloud Device
48
… will bring massive off-deck computing to mobile.
Android
Cloud to Device
Messaging Framework
Project Hawaii &
Project Maui on
Windows Phone 7
Mobile Dev Center
AWS SDKs for
Android & iOS
Source: Corporate websites.
49
Google’s Spanner: 107 = 10M machines.
Source: Google.
50
Ephemeralization of the back-end.
51
What’s Next
52
Jevons’ Paradox
William S. JevonsFrom the Book “The Coal Question”
” It is a confusion of ideas to suppose
that the economical use of fuel is
equivalent to diminished consumption.
The very contrary is the truth."
William S. Jevons, 1865
53
1950 1960 1970 1980 1990 2000
105
104
103
102
10
U.S. Asset Prices, 1945 - 2008Normalized, 1995 = 100
Source: The Business Impact of IT, based on U.S. Bureau of Economic Analysis data.
As computing gets cheaper…
Industrial Equipment
Nor
mal
ized
Pric
e: 1
995
= 1
00(lo
g)
Other Equipment
Transportation Equipment
Computers and Peripheral Equipment
54
… companies consume more of it.
U.S. IT Investment, 1970 - 2008Investment per Employee & Nominal Annual Investment
1970 1975 1980 2000 2005 2010199519901985
3,500 350B
250B
200B
150B
100B
50B
3,000
2,500
2,000
1,500
1,000
500
0
300B
0
Source: The Business Impact of IT, based on U.S. Bureau of Economic Analysis data.
IT Investment / Employee
Annual InvestmentA
nuua
lInv
estm
ent p
er E
mpl
oyee
($)
Nom
inal
Anu
ualI
nves
tmen
t ($B
)
55
Plenty of cash.
Cash on Hand for Select Tech Titans Cash and Cash Equivalents, as of 1/26/2011
44
39
35
27
29
22
11
10
7
6
Total of 226B
Source: SEC filings.
56
And then there is Facebook .
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
2.5
2011 2012 2013 2014 2015
US EU BRIC RoW
$8.10
0.7B
$5.7B
-2% -2% 45% 20%
4% 15% 90% 33%
4% 15% 268%* 33%
2.22B
1.27B
2.52B
Worldwide Facebook Usersbased on 3 User Growth Scenarios, EoY (2011-2015)
$8.18
1.0B
$7.3B
$8.20
1.3B
$9.6B
$8.32
1.7B
$12.8B
$8.54
2.2B
$16.8B
Avg. ARPU
EoY Users
$B Rev.
Y-o-Y Growth Rates ’11-15
1
2
3
Scenario 2
Total of ~700-800M global FB users by
end of 2011
57
Think again…
J. C. R. Licklider“Grandfather of the Internet”
”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
58
Lessons learned. A few thoughts on:
Your Team: Who’s in charge?
Build: iOS vs. Android vs. HTML5
Pitching: Killer exec summary
Funding (Angels): Ocean’s 11
Funding (VC): Lots vs. little
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Good Luck!