future of digital blodget ignition 2014.pptx

A Research Service By Business Insider

The Future Of Digital: 2014

intelligence.businessinsider.com

Henry BlodgetCEO & Editor-in-Chief

Emily AdlerSenior Research Editor

Marcelo Ballvé Editorial Director

Cale WeissmanReporter

Hope KingReporter

Nicholas QuahResearch Associate

John GreenoughResearch Analyst

Jessica SmithResearch Associate

Tony DanovaSenior Research Analyst

Mark Hoelzel Research Analyst

John Heggestuen Research Analyst

Cooper Smith Senior Research Analyst

BI Intelligence

There are now nearly 3 billion people online

Source: International Communication Union, Google

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013201

4E0

500

1,000

1,500

2,000

2,500

3,000

Global Internet Population

Billi

ons

Four billion to go

1990199

1199

2199

3199

4199

5199

6199

7199

8199

9200

0200

1200

2200

3200

4200

5200

6200

7200

8200

9201

0201

1201

2201

3201

4E0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Internet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet PopulationInternet Population

Global PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal PopulationGlobal Population

Global Internet Population

Billi

ons

Source: International Communication Union, Google

Attention is shifting to digital, especially mobile

Source: eMarketer, April 2014

TV Online Radio Print Other Mobile

45%

25%

17%

9%7%

4%

37%

18%

11%

4%2%

23%

US Consumer Media Consumption Share

2009 2010 2011 2012 2013 2014

This is a generational shift

Source: Ofcom

Total

Aged 16-24

Aged 25-34

Aged 35-44

Aged 45-54

Aged 55-64

Aged 65-74

Aged 75+

0 10 20 30 40 50 60 70 80 90 100

Digital Is Reaching The New GenerationTop Five Media Mentions Among all Adults, 2013

Watch TVRead Newspapers/MagazinesListen To The RadioGo Online On A Computer/Lap-top/Netbook/TabletUse A Smartphone

One law of media…

Money follows eyeballs.

Ad spending is moving to digital (and mobile)

Source: IAB, U.S. Census Bureau, Strategy Analytics, BI Intelligence estimates

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

$0

$60

$120

$180

Mobile

Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3

All Other Online

Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2

OfflineSeries1Series1

Series1Series1Series1

Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1

U.S. Advertising

Billi

ons

Print ads have fallen off a cliff

Source: Newspaper Association Of America *Estimate

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013* $-

$10,000

$20,000

$30,000

$40,000

$50,000 Newspaper Ad Revenue (Print vs. Online)

Print Online

Milli

ons

Google is now bigger than all newspapers, magazines

Source: Google, NAA, PIB

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013$0

$10,000

$20,000

$30,000

$40,000

$50,000

Google vs. Magazine vs. Newspaper Ad Revenue, US Data, 2004-2013

Google (US)

US Magazines

US Newspapers

Milli

ons

Google now dwarfs “big media”

Source: Company Filings, BI Intelligence estimates

$30

$18 $16 $14

$5 $5 $3 $2

$70 Estimated 2014 RevenueSelect Media Companies

Billi

ons

Google is almost half the size of all global TV advertising

Global TV Ad Revenue Google

$174

$70

Estimated 2014 Ad RevenueGoogle vs. Global TV Ad Market

Billi

ons

Source: Google, PWC

For many years TV folks have (rightly) laughed off digital concerns

Time to stop laughing.

Ratings are falling…

Source: Nielsen

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-20135

5.2

5.4

5.6

5.8

6

6.2

Primetime Household TV Ratings

Big 4 U.S. TV Networks Average

Niel

sen

Hous

ehol

d Ra

ting

(% O

f Hou

seho

lds

With

TV

Sets

Wat

chin

g)

Pay TV subscriptions are dropping…

Source: Leichtman Research Group

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

(800,000)

(600,000)

(400,000)

(200,000)

-

200,000

400,000

600,000

Cable

Satellite

Telephone

Total

Pay-TV Net Additions (US)

Net A

dditi

ons I

n Th

ousa

nds

Facebook reaches more young people than free TV

Source: Nielsen, January 2013

Age 18-24 Age 25-34 Age 35-54 Age 55+

58%

73%83%

89%

63%68%

63%

42%

Facebook vs. TV Daily Reach(US)

Four TV Networks

Facebook

Perc

ent R

each

Netflix now has more US subscribers than HBO

Source: Netflix, SNL Kagan

4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q20140

10

20

30

40

HBO

NetflixPaid Domestic Subscribers — Netlix v. HBO

Milli

ons

Of U

S Su

bscr

iber

s

YouTube reaches more 18-34s than any cable network

2010 2011 2012 2013 2014E0

200

400

600

800

1000

1200

1400 YouTube “Ratings”Mi

llion

s

Digital video revenue is no longer a joke…

Source: BI Intelligence estimates, Company Filings

2006 2007 2008 2009 2010 2011 2012 2013$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Netflix Netflix Netflix Netflix NetflixNetflix Netflix Netflix

YouTube

YouTube YouTubeYouTube

YouTube

YouTubeYouTube

YouTubeHulu

Hulu HuluHulu

Hulu

Hulu

Hulu

Hulu

Estimated Digital Video RevenueBi

llion

s

iTunes and Netflix already dwarf small cable networks

Source: News Reports, Company Filings

2007 2008 2009 2010 2011 2012 2013$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000iTunes

Netflix

AMC Networks

Cable Network vs. Digital Content Revenue 2007-2013

Billi

ons

YouTube is closing in on broadcast-network revenue

Source: News Reports, BI Intelligence estimates, Company Filings

2007 2008 2009 2010 2011 2012 2013 $-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

YouTube Ad Revenue vs. CBS Ad Revenue And AMC Networks Revenue

Billi

ons

CBS Ad Revenue

YouTube Ad Revenue

AMC Networks Revenue

(Some) live sports are now being streamed

Source: Ooyala 2014

Desktop Tablet Mobile Connected TV

34.5

7.13.5

42.8

11

17.1

10.5

16.9

2.6 4.1 2.85.1

Time Spent Watching Online Video By Content TypeGlobal

All Live EventsSportsVOD

Tim

e Sp

ent P

er P

lay

In M

inut

es

TV now has to share attention with digital

Source: Millward Brown, 2014

Smartphone Laptop Tablet

83(55%) 65

(63%)20

(45%)

68(45%)

38(37%)

24(55%)

Daily Time Spent With Devices, While Watching TV Or Us-ing The Device Independently

Ages 16 - 44, United States Only

Without TVWith TV

Tim

e Sp

ent I

n Mi

nute

s (P

erce

ntag

e Of

Tot

al T

ime)

So, eyeballs are leaving TV

But, so far, TV money is hanging in there

TV still massive, digital video still a blip

Source: Nielsen, IAB

2007 2008 2009 2010 2011 2012 2013$0

$20

$40

$60

$80

US Ad Spend, 2007-2013TV Vs. Online Video

TV Ad SpendOnline Video Ad

Total TVAd Spend(Billions)

So no worries in TV land?

Yes, worries.

It’s a generational shift — look what Millennials are doing

Source: Ofcom

All Adults Aged 75+ Aged 16-24

TV

TV

TV

Print

Print

Radio

Radio

Radio

Computer

3

Computer

Smartphone

Smartphone

“Media you would miss most”

Use A Smartphone

Go Online On A Computer/Laptop/Netbook/Tablet

Listen To The Radio

Read Newspapers/Magazines

Watch TV

Money follows eyeballs…

Source: Mary Meeker, IAB, eMarketer

Print TV Web Radio Mobile

5%

38%

25%

12%

20%19%

43%

22%

10%

4%

2013 U.S. Ad Spending vs. Consumer Time Spent By Media

So it’s only a matter of time.

What’s going on in digital?

Smartphone sales are still booming

Source: IDC, Strategy Analytics, BI Intelligence estimates

-

50

100

150

200

250

300

350

SamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsungSamsung

Apple

Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple Apple

Apple Apple Apple Apple Apple Apple Apple Apple

Xiaomi

XiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomiXiaomi

XiaomiXiaomiXiaomiXiaomiXiaomiXiaomi

XiaomiXiaomiLenovo

LenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovo

LenovoLenovoLenovoLenovo

LenovoLenovoLenovoLenovoLenovoLenovo

LenovoLenovoHuawei

HuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuawei

HuaweiHuaweiHuaweiHuawei

HuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuaweiHuawei

LG

LG LG LG LG LG LG LG LG LG LG LG LG LG

LG LG LG LG

LG LG LG LGLG LG LG LG

ZTE

ZTE ZTE ZTE ZTE ZTE ZTE ZTE ZTE ZTE ZTE ZTE ZTE ZTE

ZTE ZTE ZTEZTE

ZTE ZTE ZTEZTE

ZTE ZTE ZTEZTE

Coolpad

CoolpadCoolpadCoolpadCoolpadCoolpadCoolpadCoolpadCoolpadCoolpadCoolpadCoolpadCoolpadCoolpad

CoolpadCoolpadCoolpadCoolpad



Nokia

NokiaNokiaNokiaNokiaNokiaNokiaNokiaNokiaNokiaNokiaNokiaNokiaNokia

NokiaNokiaNokiaNokia

NokiaNokiaNokia

NokiaNokiaNokiaNokia

Nokia

Sony

SonySonySonySonySonySonySonySonySonySonySonySonySony

SonySonySonySony

SonySonySony

SonySonySonySony

Sony

Motorola

MotorolaMotorolaMotorolaMotorolaMotorolaMotorolaMotorolaMotorolaMotorola

MotorolaMotorolaMotorolaMotorola


MotorolaMotorolaMotorola


Motorola

HTC

HTC HTC HTC HTC HTC HTC HTC HTCHTC

HTC HTCHTC HTC

HTC HTC HTCHTC

HTC HTCHTC

HTCHTC HTC HTC

HTC

BlackBerry

BlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberry

BlackberryBlackberryBlackberryBlackberry


BlackberryBlackberryBlackberry


Blackberry

Other

OtherOtherOtherOtherOtherOtherOtherOtherOther

OtherOtherOtherOther


OtherOtherOther


Other

Global Smartphone Shipments By VendorMi

llion

s

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

PCsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC ShipmentsPC Shipments

TabletsTablet Shipments

Tablet ShipmentsTablet Shipments

Tablet ShipmentsTablet ShipmentsTablet Shipments

Tablet ShipmentsTablet ShipmentsTablet ShipmentsTablet Shipments


Tablet ShipmentsTablet Shipments

Tablet ShipmentsTablet ShipmentsTablet ShipmentsTablet Shipments


Tablet Shipments


Global Computer Shipments

Thou

sand

s

Tablets have carved out a chunk of PC sales

Source: Gartner, IDC, Strategy Analytics, Company Releases

“Phablets” are replacing small smartphones

Source: BI Intelligence estimates

2006

2007

2008

2009

2010

2011

2012 2 2 2 2 2 2 2

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Phablets

Tablets

Smartphones (Non-Phablet)

Global Annual Shipments By Device

Milli

ons

Nearly half of TVs are now connected

Source: Leichtman Research Group, BI Intelligence estimates

2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E0

10

20

30

40

50

60

70

80

0%

10%

20%

30%

40%

50%

60%

27.7 35.7

43.8 50.1

56.5 61.1

65.7 68.6 71.4 72.6

24%31%

38%44%

49%53%

57% 60% 62% 63%

U.S. Households With Connected TVPercentage Of Households; Number Of Households In Mil-

lions

“Wearables” are overhyped but growing


2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E0

20

40

60

80

100

120

140

160

Smartwatches

SmartwatchesSmartwatchesSmartwatchesSmartwatches

SmartwatchesSmartwatches


Smartwatches

Fitness Bands And Other Activity

Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers

Rest Of Wearables Market










Global Wearable Device Unit Shipments Forecast

Milli

ons O

f Uni

ts S

hipp

ed A

nnua

lly

35% CAGR2014-2019

We Are Here

Cars are increasingly connected

Source: SBD, GSMA

2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E€ 0

€ 5,000

€ 10,000

€ 15,000

€ 20,000

€ 25,000

€ 30,000

€ 35,000

€ 40,000

€ 45,000

In-vehicle servicesIn-vehicle servicesIn-vehicle servicesIn-vehicle servicesIn-vehicle servicesIn-vehicle servicesIn-vehicle servicesIn-vehicle servicesIn-vehicle servicesIn-vehicle servicesHardware

HardwareHardware

HardwareHardware

HardwareHardware

HardwareHardware

Hardware

Telematics service providers










Telecom service providers

Telecomm service providers









Connected Car Revenue Forecast

Milli

ons

300 million PCs are still sold each year

Source: Gartner, IDC, BI Intelligence estimates

1Q08

3Q08

1Q09

3Q09

1Q10

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

3Q13

1Q14

3Q14

0

20,000

40,000

60,000

80,000

100,000

LenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoLenovoHP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HP HPDell DellDellDellDellDellDellDellDellDellDellDell

DellDellDellDellDellDellDellDellDellDellDellDellDellDellDellAcer AcerAcerAcer

AcerAcerAcer

AcerAcerAcerAcerAcerAcerAcerAcerAcerAcerAcerAcerAcer

AcerAcerAcerAcerAcerAcerAcerOther

OtherOther

OtherOtherOther

OtherOther



OtherOtherOtherOtherOtherOtherOtherOther

OtherOtherOther

Global PC Shipments By ManufacturerTh

ousa

nds

iPad released Windows 8 released

Should you be “mobile only?”

It’s a “multi-screen” world

Source: Gartner, IDC, Strategy Analytics, Company Filings, BI Intelligence estimates

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

Personal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal ComputersPersonal Computers

Smartphones

SmartphonesSmartphonesSmartphonesSmartphonesSmartphonesSmartphonesSmartphonesSmartphonesSmartphonesSmartphones

SmartphonesSmartphones


Tablets

TabletsTabletsTabletsTabletsTabletsTabletsTabletsTabletsTablets

TabletsTablets

Tablets

Tablets

Tablets

Smart TVs

Connected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVs

Connected/Smart TVs

Connected/Smart TVs

Connected/Smart TVs

Connected/Smart TVs

Connected/Smart TVsWearables

WearablesWearablesWearablesWearablesWearablesWearablesWearablesWearablesWearables

Wearables

Wearables

Wearables

Wearables

WearablesGlobal Internet Connected

Device Shipments

Units

You should be “mobile, too.”

~60% of online devices are now smartphones or tablets


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

Personal Computers (Desktop And Note-

book)


book)


book)


book)


book)


book)


book)


book)


book)


book)


book)

SmartphonesSmartphonesSmartphonesSmartphonesSmartphonesSmartphones



SmartphonesTablets

Tablets TabletsTablets Tablets Tablets

TabletsTablets

Tablets

Tablets

Tablets

Smart TVs

Connected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVsConnected/Smart TVs

Connected/Smart TVs

Connected/Smart TVs

Connected/Smart TVs

Connected/Smart TVs

Connected/Smart TVs

Wearables

WearablesWearablesWearablesWearablesWearables

Wearables

Wearables

Wearables

Wearables

Wearables

Global Internet Device Installed Base

Num

ber O

f Dev

ices I

n Us

e (In

Bill

ions

)

Other8%

Visit Websites14%

Games8%

Social Networking15%Talk

26%

Text20%

Email9%Breakdown Of The Average

Smartphone Owner's Daily Time-Spend

On Average, U.S. Smartphone Owners Spend 58 Minutes Daily On Their Phones

We spend an hour a day on our smartphones

Source: Experian Marketing Services, May 2013

We spend ½ hour on tablet each time we use it

Source: Google, August 2012

TV PC/Laptop Tablet Smartphone

4339

30

17

Average Minutes Spent Per Interaction By Device

More than ¼ of Internet traffic is mobile

Source: StatCounter, BI Intelligence estimates

Dec-08 Jan-10 Feb-11 Mar-12 Apr-13 May-140%

25%

50%

75%

100%Global Internet Traffic Share

Desktop Vs. Mobile

Mobile has extended the digital day to 18/7

Source: Google Analytics, Business Insider

9/1/12 9/15/12 9/29/12 10/13/12 10/27/12 11/10/12 11/24/12 12/8/12 12/22/12 1/5/13

Mobile Visits Desktop Visits

Each device has a different “prime time”

Source: comScore, Telefonica, Macquarie Capital (USA), December 2011

Where are we in themobile device cycle?

Developed mobile markets are nearing maturity

Source: comScore

Jan 10Mar

10May

10Jul 10Sep

10Nov

10Jan

11Mar

11May

11Jul 11Sep

11Nov

11Jan

12Mar

12May

12Jul 12Sep

12Nov

12Jan

13Mar

13May

13Jul 13Sep

13Nov

13Jan

14Mar

14May

140%

10%

20%

30%

40%

50%

60%

70%

80%

18%

72%

U.S. Smartphone Penetration(a

s a p

erce

ntag

e of

the

mob

ile p

opul

atio

n)

The action is now in China, India, and emerging markets

Source: Mediacells via The Guardian

China Ind

ia USABra

zil

Indon

esia

Russi

aJap

anMex

ico

German

yFra

nce UKOthe

rsIta

ly

Austr

alia

Malaysi

a

Swede

n0

50

100

150

200

250

300 Smartphone Sales In 2014 Will Be Driven By New Users In Emerging Markets

Sales To New Smartphone Users In 2014

Smartphone Upgrades In 2014

Milli

ons O

f Sm

artp

hone

s

Top 11 Mar-kets

Other Mar-kets

China is already twice the size of the US market

Source: China Internet Network Information Center

June 06

Dec 06

June 07

Dec 07

June 08

Dec 08

June 09

Dec 09

June 10

Dec 10

June 11

Dec 11

June 12

Dec 12

June 13

Dec 13

June 14

0

100

200

300

400

500

600

700

Mobile Users

Total Users

US Users

Chinese Internet Users

Milli

ons O

f Int

erne

t Use

rs

Prices are dropping fast


2010A 2011A 2012A 2013E 2014E 2015E 2016E $100

$150

$200

$250

$300

$350

Global Smartphone Average Selling Price ForecastAv

erag

e Se

lling

Pric

e

iPhone sales growth has slowed (iPhone 6 will help)

Source: Company Filings

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

0

10,000

20,000

30,000

40,000

50,000

60,000

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2iPhone SalesUnit Sales

YoY Growth

Unit

Sale

s (Th

ousa

nds)

YoY

Sale

s Gro

wth

Chinese companies sell ~25% of smartphones in world

Source: Canalys, IDC, Strategy Analytics, BI Intelligence, Company Reports

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q140

10

20

30

40

50

60

70

80

90

Selected Local Manufacturers From China Global Quarterly Smartphone Shipments

Xiaomi

Huawei

Lenovo

ZTE

Coolpad

Milli

ons

Global tablet growth has hit a wall


3Q104Q101Q112Q113Q114Q111Q12 2Q123Q124Q121Q132Q133Q13 4Q131Q142Q143Q14-100%

-50%

0%

50%

100%

150%

200%

250%

300%

Year-Over-Year Growth

Global Tablet Shipments Quarterly Year-Over-Year Growth

Sequential Growth

(iPad now experiencing “negative growth”)

Source: Apple

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

0

5,000

10,000

15,000

20,000

25,000

30,000

-50%

0%

50%

100%

150%

200%

iPad Sales

Unit Sales

YoY Growth

Unit

Sale

(Tho

usan

ds)

YoY

Sale

s Gro

wth

Why have tablet sales cratered?

1. Long upgrade cycle2. Phablet cannibalization

3. Need keyboard for serious input4. Price

What about theplatform war?

We have a winner!

Apple is strong in the US, where it’s a two-horse race

Source: comScore

0%

20%

40%

60%

80%

100%

AndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidApple

AppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleAppleApple

BlackBerry

BlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerryBlackBerry

Windows PhoneMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoftMicrosoft

Other OtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherOtherUS Smartphone Platform Market Share

But, globally, it’s an Android world

~85% of smartphones run Google’s Android


0%

25%

50%

75%

100%

AndroidSeries1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1

Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1

iOS


Series2Series2

Series2Series2


Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2

Microsoft


Series3Series3

Series3Series3

Series3Series3


Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3

BlackBerry

Series4Series4Series4Series4

Series4Series4

Series4Series4

Series4Series4Series4Series4Series4Series4Series4Series4Series4Series4Series4Series4Series4Series4

Other

Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5

Global Smartphone Market Share By Platform

Shar

e of

Glo

bal U

nit S

hipm

ents

~65% of tablets run Android


0%

25%

50%

75%

100%

AndroidAndroidAndroidAndroidAndroidAndroid

AndroidAndroidAndroid

AndroidAndroidAndroidAndroid

AndroidAndroidAndroidAndroid

Apple

AppleApple

AppleAppleApple

AppleApple

AppleAppleApple

AppleAppleApple

AppleAppleApple

Amazon Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)

Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)Amazon (Kindle Fire)

BlackBerryBlackberryBlackberryBlackberryBlackberry

BlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryNook Barnes & Noble (Nook)Barnes & Noble

(Nook)Barnes & Noble


(Nook)Barnes & Noble (Nook)Barnes & Noble



(Nook)Barnes & Noble (Nook)Barnes & Noble







(Nook)WindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindows

Global Tablet Market Share By Platform

~70% of all new computing gadgets run Android

Source: Gartner, IDC, Strategy Analytics, Company Filings, BI Intelligence estimates

0%

20%

40%

60%

80%

100%

AndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidAndroidWindows WindowsWindowsWindowsWindowsWindowsWindowsWindowsWindowsWindows

WindowsWindowsWindowsWindows

WindowsWindowsWindows

WindowsWindowsWindowsWindowsWindowsWindowsApple iOS

iOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOSiOS

BlackBerryBlackberry

BlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryBlackberryOtherOtherOther OtherOtherOther OtherOther Other OtherOtherOtherOtherOtherOtherOtherOtherOther

Global Computing Platform Market Share

Android used to lag Applebadly with app developers.

Not anymore.

Android “fragmentation” problem is improving

Source: Google

9/15/12 11/15/12 1/15/13 3/15/13 5/15/13 7/15/13 9/15/13 11/15/13 1/15/14 3/15/14 5/15/14 7/15/140%

20%

40%

60%

80%

100%

Other Other Other Other Other Other Other OtherOther

FroyoFroyo Froyo Froyo Froyo Froyo Froyo FroyoFroyo

GingerbreadGingerbreadGingerbread

GingerbreadGingerbread

Gingerbread GingerbreadGingerbreadGingerbread

Honeycomb

Honeycomb

Honeycomb

HoneycombHoneycomb

Honeycomb HoneycombHoneycombHoneycomb

Ice Cream SandwichIce Cream Sandwich

Ice Cream Sandwich

Ice Cream Sandwich

Ice Cream Sandwich

Ice Cream SandwichIce Cream SandwichIce Cream SandwichIce Cream Sandwich

Jelly BeanJelly Bean




Kit KatKit Kat Kit Kat Kit Kat Kit Kat

Kit Kat Kit KatKit Kat

Jelly Bean And Kit Kat Are Now ~80% Of Android

Android now more popular with developers than iOS

Source: Developer Economics, Q3 2014

Android 42%

iOS32%

BlackBerry 103%

Windows Phone10%

Other13%

Mobile Developers' Main Platform

Android will soon overtake iOS in app revenue

Source: Jana, App Annie, BI Intelligence estimates

4Q13 1Q14 2Q14 3Q14 4Q14E 1Q15E 2Q15E 3Q15E 4Q15E 1Q16E 2Q16E$0

$1

$2

$3

$4Estimated App Revenue

Apple App Store Vs. Google PlayBi

llion

s

Android is catching up to iOS in developer payouts

Source: Jana, App Annie, BI Intelligence estimates

3Q13 4Q13 1Q14 2Q14$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

Apple App Store Apple App Store Apple App Store Apple App Store

Google PlayGoogle Play

Google Play Google Play

Estimated App Developer PayoutApple App Store And Google Play

Billi

ons

Android now generates more global ad traffic than iOS

Source: Opera Mediaworks

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q140%

20%

40%

60%

80%

100%

Android Android Android Android Android Android Android Android Android Android

iOS iOS iOS iOS iOS iOSiOS iOS

iOSiOSBlackBerry BlackBerry OSBlackBerry OSBlackBerry OSBlackBerry OSBlackBerry OS

BlackBerry OSBlackBerry OSBlackBerry OSBlackBerry OS

Symbian SymbianSymbianSymbianSymbianSymbianSymbianSymbian

SymbianSymbianOther Other Other Other Other Other Other Other Other Other

Global Mobile Ad Traffic Share By Platform

Shar

e Of

Tra

ffic

The key digital media trends…

MobileSocial

Native

VideoProgrammatic

Most digital growth is now mobile

Source: comScore, April 2014

Dec-10 Dec-130

200

400

600

800

1000

1200

Smartphone131

Smartphone442Tablet

11

Tablet124

Time Spent By Digital Platform Per MonthU.S., December 2010 Vs. December 2013

Billi

ons O

f Min

utes

1,040% Growth

237%

7%

Desktop401

Desktop429

Messaging apps are exploding

Source: Company Statements, News Reports, BI Intelligence estimates

Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-140

100

200

300

400

500

600The Messaging Wars — MAUs For Top Apps

(Monthly Active Users - Global)Mi

llion

s

Social networks and sharing are exploding

Source: BI Intelligence estimates based on data from company filings, comScore, Global Web Index, Totem and news reports

2010 2011 2012 2013 2014E0

500

1,000

1,500

Facebook

TwitterTumblrInstagramSnapchat

Google Plus

LinkedInPinterestVine

Social Network MAUs (Global)

Milli

ons

Mobile video is booming…

Source: Cisco, 2013

2011 2012 2013 2014 2015 2016 20170

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

Global Mobile Video Traffic Will Continue To Surge Mi

llion

s of T

erab

ytes

Per

Mon

th

Mobile video has enabled the rise of the YouTube stars


35 million viewers

8 million viewers

1 million viewers

Social and music are now mostly mobile


2008 2009 2010 2011 2012 20130%

25%

50%

75%

100%

Pandora

Facebook

Twitter

Mobile Usage: Pandora, Twitter, Facebook

Mobile is driving all of Facebook’s growth


Q1 10

Q3 10

Q1 11

Q3 11

Q1 12

Q3 12

Q1 13

Q3 13

Q1 14

Q3 14

$0.0

$500,000,000.0

$1,000,000,000.0

$1,500,000,000.0

$2,000,000,000.0

$2,500,000,000.0

$3,000,000,000.0

$3,500,000,000.0

Advertising (Non-Mobile)Advertising (Non-

Mobile)Advertising (Non-










Mobile)Advertising (Non-Mobile)Advertising (Non-



Mobile)Advertising (Non-Mobile)Advertising (Non-


Mobile)Mobile Advertising

Mobile AdvertisingMobile AdvertisingMobile AdvertisingMobile Advertising

Mobile AdvertisingMobile AdvertisingMobile AdvertisingMobile AdvertisingMobile AdvertisingMobile Advertising

Mobile AdvertisingMobile AdvertisingMobile AdvertisingMobile Advertising

Mobile AdvertisingMobile Advertising

Mobile AdvertisingMobile AdvertisingPayments And Fees

Payments And FeesPayments And FeesPayments And FeesPayments And Fees

Payments And FeesPayments And FeesPayments And FeesPayments And FeesPayments And FeesPayments And Fees

Payments And FeesPayments And Fees




Facebook Revenue By Segment (Global)

Billi

ons

Mobile is now a third of eCommerce traffic

Source: Monetate

2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q140%

25%

50%

75%

100%

PC PC PC PC PC PC PC PC PC PC PC PC PC

TabletTabletTabletTabletTabletTabletTabletTabletTabletTabletTabletTabletTablet

SmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphoneSmartphone

Ecommerce Website Traffic By Device

PayPal powers $30 billion in mobile payments

*PayPal counted a small portion of Braintree’s transaction volume as its own in the last 12 days of Q4 2013.Source: PayPal

2008 2009 2010 2011 2012 2013$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

PayPal Mobile

PayPal Mobile PayPal MobilePayPal Mobile

PayPal Mobile

PayPal Mobile

Braintree Mobile*

Braintree Mobile*Braintree Mobile*

Braintree Mobile*

Braintree Mobile*

Braintree Mobile*

PayPal Mobile Transaction Volume(Including Braintree 2013)

U.S.

Dol

lars

In B

illio

ns

Venmo is (finally) replacing friend-to-friend payments

Source: PayPal, BI Intelligence

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

$81 $105$141

$194

$314

$468

$700

Venmo Payment Volume

Milli

ons O

f Dol

lars

Ad growth is mobile, social, video, native, programmatic

Source: BI Intelligence estimates based on data from BIA/Kelsey, IAB, IDC, and Magna Global Note: Formats overlap. Mobile includes all ad formats that appear on mobile.

Desktop Display

Desktop Video

Desktop Search

Mobile Social Native Programmatic

-0.4%

15.1%

2.3%

42.6%

18.0%

34.7% 35.7%

Advertising Revenue Growth (US)CAGR 2013 - 2018

Mobile is a “green field”

Source: eMarketer

Latin America Middle East and Africa

Eastern Europe Asia-Pacific Western Europe North America

$1 $1 $1 $3

$10 $12

$1 $1 $1 $3

$15

$30

$1 $1 $1$4

$19

$46

Annual Mobile Ad Spend Per Mobile Internet UserBy Region

2011 2012 2013

Social is booming

Source: BI Intelligence estimates, BIA/Kelsey

2013 2014E 2015E 2016E 2017E 2018E $-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Non-Mobile Non-Mobile Non-Mobile Non-Mobile Non-Mobile Non-Mobile

MobileMobile

MobileMobile

Mobile Mobile

FORECAST: Social Media Advertising Spend(US)

Billi

ons

“Display” ad spending is still respectable, but…


$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

GoogleSeries1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Other Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2Series2

Series2Series2Series2Series2Series2Series2Series2Series2



YahooSeries3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3Series3

Series3Series3Series3Series3Series3


Series3Series3Series3Series3Series3Series3Series3

AOLSeries4


Series4Series4Series4Series4Series4Series4





Microsoft Series5Series5









US Display Advertising, 2006-2014 (Quarterly)

TotalDisplay

AdvertisingRevenue(Millions)

Growth is shifting to “native”…

Source: BI Intelligence estimates, IAB

2013 2014E 2015E 2016E 2017E 2018E$0

$5

$10

$15

$20

$25

$1.0 $1.3 $1.9 $2.7 $3.9 $5.7 $0.8 $1.0 $1.3

$2.0 $2.7

$3.4

$2.9 $5.6

$7.5 $9.2

$10.7

$11.9

Native Advertising Revenue (US)Desktop And Mobile

Native-Style Display Sponsorship Social

Billi

ons

And “programmatic”

Source: BI Intelligence estimates, Magna Global, IDC

2013 2014E 2015E 2016E 2017E 2018E

$6,032$8,288

$12,076

$17,931

$23,221

$27,715

FORECAST: Programmatic Ad Spend (U.S.)

Ad S

pend

In B

illio

ns

Google is still the digital advertising king

Source: Company Filings Note: Based on GAAP revenue.

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14$0

$4,000

$8,000

$12,000

$16,000

$20,000

GoogleGoogleGoogleGoogleGoogleGoogleGoogleGoogleGoogleGoogleGoogleGoogleGoogleGoogle

Facebook

FacebookFacebookFacebookFacebookFacebookFacebook

FacebookFacebookFacebookFacebookFacebookFacebookFacebook

YahooYahooYahooYahooYahooYahooYahoo

YahooYahooYahooYahoo

YahooYahooYahoo

AOL

AOL AOLAOL AOL AOL AOL

AOL AOL AOL AOL

AOL AOLAOL

Digital Advertising Revenues (Global)

Billi

ons

Google’s YouTube dominates digital video and video ads


Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

$0

$250,000,000

$500,000,000

$750,000,000

$1,000,000,000

$1,250,000,000

$1,500,000,000

$1,750,000,000

YouTubeYouTubeYouTubeYouTubeYouTubeYouTubeYouTubeYouTube

YouTubeYouTubeYouTubeYouTubeYouTubeTremor

TremorTremorTremorTremorTremorTremor

TremorTremorTremorTremor

TremorTremor

YuMe

YuMe YuMe YuMeYuMe YuMe YuMe

YuMeYuMe YuMe YuMe

YuMeYuMe

TubeMogul

TubeMogulTubeMogulTubeMogulTubeMogulTubeMogulTubeMogul

TubeMogulTubeMogulTubeMogulTubeMogul

TubeMogulTubeMogul

Global Digital Video Advertising Revenue(Select Companies)

Reve

nue

In M

illio

ns

Google’s Chrome browser is crushing Firefox and IE

Source: StatCounter

2010 2011 2012 2013 20140%

10%

20%

30%

40%

50%

60%

Other

Safari

Firefox

Internet Explorer

Chrome

Opera

Global Web Browser Usage Share

Google’s Android has peak-Windows-like market share


0%

20%

40%

60%

80%

100%

AndroidSeries1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1

Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1Series1

iOS


Series2Series2

Series2Series2



Microsoft


Series3Series3

Series3Series3

Series3Series3



BlackBerry


Series4Series4

Series4Series4



Other

Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5Series5 Series5Series5Series5

Global Smartphone Market Share By Platform

Shar

e of

Glo

bal U

nit S

hipm

ents

Google93%

Bing3%

Yahoo2%

Other2% Europe Search Market Share

Oct. 2014

In Europe, Google has peak-Windows-like search share

Source: StatCounter

Basically, Google is swallowing the world…

Source: Google, 2014 Is An Estimate

2009 2010 2011 2012 2013 2014E $-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000 Google Global Annual Revenue

Billi

ons

(And people are noticing!)

Source: StatCounter

(For Microsoft, DOJ attack was the beginning of the end)

Source: StatCounter

Have Google and Facebook won?

Not necessarily.

Money follows eyeballs.

Search click growth is finally decelerating

Source: Google

Q1 13 Q3 13 Q1 14 Q3 14

20%23%

26%

31%

26%25%

17%

Google Paid Clicks GrowthGlobal, Year-Over-Year

US desktop search queries are now shrinking

Source: comScore Note: Explicit user initiated search queries only.

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

10%12%

14%

10%7%

4%0%

-3%-5%

-7% -8% -7% -7%

Total Monthly Search Query Growth U.S., Year-Over-Year; Desktop Only

“No one uses Facebook anymore” — Gen Z-er

Source: Piper Jaffray

Fall 2012 Spring 2013 Fall 2013 Spring 2014

42%

33%

27%

23%27%

30%

31%

27%

12%

17%

27%

30%

The Most Important Social Networks To US TeensPercent Of Respondents Who Say The Network Is Most

Important

FacebookTwitterInstagram

Why do teens love Instagram?

2010 2011 2012 2013 2014E0

50

100

150

200

250

300 InstagramMi

llion

s

“Because parents see that camera icon and think it’s a photo app. They don’t know it’s a social network.”

What’s Tumblr for?

2010 2011 2012 2013 2014E0

50

100

150

200

250

300

350 TumblrMi

llion

s

“Fandom. And de-pressed and creepy people.”

What about phone calls? Do people talk anymore?

2010 2011 2012 2013 2014E0

200

400

600

800 WhatsAppMi

llion

s

“No. Everyone has phone numbers, but they’re for texting.”

Digital is the medium for the new generation.

Digital will grow for decades.

So, what’s next?

Connected cars — we spend 1.2 hours a day in them

Source: Bureau Of Labor Statistics

0

12

24

8.8 hours

7.6 hours

2.5 hours1.2 hours1.1 hours1.1 hours1.7 hours

Average Daily Time Spent Per PersonU.S. Employed Citizens ages 25 to 54

Other

Household Activities

Eating And Drinking

In The Car

Leisure And Sports

Sleeping

Working

Wearables (someday)


2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E0

20

40

60

80

100

120

140

160

Smartwatches

SmartwatchesSmartwatchesSmartwatchesSmartwatches



Smartwatches


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers


Trackers











Global Wearable Device Unit Shipments Forecast

Milli

ons O

f Uni

ts S

hipp

ed A

nnua

lly

35% CAGR2014-2019We Are Here

Smartwatches, like Apple Watch, should do okay


2013 2014 2015E 2016E 2017E 2018E 2019E 2020E0

20

40

60

80

100

120

140

Apple WatchApple Watch

Apple WatchApple WatchApple WatchApple WatchApple WatchApple Watch

Total SmartwatchMarket



SmartwatchesSmartwatchesSmartwatches

Apple Watch Annual Shipments Forecast2015-2020

Milli

ons

Fitness bands will remain niche

Source: NPD Group, BI Intelligence estimates; Annual Data From April Through March

2010-2011 2011-2012 2012-2013 2013-2014 -

500

1,000

1,500

2,000

2,500

3,000

3,500

Fitbit

Fitbit Fitbit

Fitbit

Jawbone

JawboneJawbone

Jawbone

Nike

Nike

Nike

NikeOther

Other

Other

OtherFitness Band Hardware Annual Unit Sales

By Device Maker, US Only

Thou

sand

s Of F

itnes

s Ban

ds S

old

“Internet of Things” — 20B connected devices by 2020


2014E 2015E 2016E 2017E 2018E 2019E -

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

EnterpriseEnterprise Enterprise Enterprise Enterprise

EnterpriseGovernment/In-

frastructureGovernment/In-

frastructure

Government/In-frastructure



Government/In-frastructureHome

Home

Home

Home

Home

Home

Estimated Number of InstalledIoT Devices by Sector

We’ll fill our houses with smart devices

Source: ABI Research, TechNavio, Pike Research, BI Intelligence estimates

2012 2013 2014E 2015E 2016E 2017E 2018E 2019E0

500

1,000

1,500

2,000

Smart Home EnergyHome AutomationHome AutomationHome Automation

Home AutomationHome Automation

Home AutomationHome AutomationSmart Home Security

Home SecurityHome SecurityHome Security

Home Security

Home Security

Home Security

Home Security

Smart Appliances

Smart AppliancesSmart Appliances

Smart Appliances

Smart Appliances

Smart Appliances

Smart Appliances

Smart Appliances

Other Systems

Other SystemsOther Systems

Other Systems

Other Systems

Other Systems

Other Systems

Other Systems

Global Connected Home Device ShipmentsBy Device Category

Milli

ons

And companies will buy them by the billions


2014E 2015E 2016E 2017E 2018E 2019E - 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 6,000,000,000 7,000,000,000 8,000,000,000 9,000,000,000 10,000,000,000

Global Enterprise Device Growth

Five-Year (2014-2019) CAGR 49%

Thank You!

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