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2013Mobile Breakfast

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#thinkMobile

The Future Of MobileHenry BlodgetCEO/Editor, Business Insider

Digital is changing…

Now twice as many mobile devices sold as PCs

PC sales, meanwhile, flat to down

Tablets alone will overtake PCs in 2-3 years

So the future is mobile

Where are we in the smartphone revolution?

Still lots of “dumbphones” to replace

Smartphones 44% of mobile sales last quarter

But!

Growth slows after hitting 50% penetration

Major markets are past halfway point

Underpenetrated segments are older…

…and poorer.

We’re starting to see the slowdown in U.S.

The big opportunity is now in emerging markets

And they’re growing rapidly

China is now the world’s largest smartphone market

This shift to emerging markets has hurt Apple.

iPhones are still very expensive

And folks in emerging markets don’t have much money

That’s why Apple needs a cheap iPhone

The tablet market is less mature than

smartphones

U.S. tablet penetration now ~25%

Current owners are affluent

And older

But prices are falling fast…

And, globally, tablet sales are just getting started

What do people do on mobile?

Mostly, they play games and social-network

Source: Flurry, November 2012

Tablets, especially, are gaming devices

Mobile users also listen to music

And consume content

Mobile is now 15% of global web traffic

Mobile users watch video

~8% of online video hours are now mobile

Mobile movie and TV viewing is growing

Mobile users read news and books

They shop

Mobile now drives 20% of e-commerce traffic

Some mobile commerce revenue is incremental

They use smartphones and tablets to make purchase decisions

People use mobile to pay for stuff…

Mobile is now 10% of PayPal’s payments

Square processes $25+ million a day

And some “native” mobile apps are really

exploding…

Angry Birds downloaded 1+ billion times

Instagram 100+ million active users

BOTTOM LINE:

The growth of mobile = more usage, new apps

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

Each device has a different “prime time”Share Of Device Page Traffic

Over A Day:

Mobile has extended the digital day

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000Mobile Visits Desktop Visits

Source: Google Analytcs, Business Insider

Usage is up across the board…

Smartphone owners consume a huge amount of content

Mobile consumption share is growing

Tripled since 2009

So mobile advertising will be huge, right?

Hmm…

Yes, there’s a gap between time and ad spend

Source: Mary Meeker (KPCB), eMarketer, IAB

9% gap

But there are reasons for that gap …

The screen is really small.

The mobile ad ecosystem is complex…

And bad mobile ads are…

INTRUSIVE

So mobile monetization still lags the desktop

Overall, mobile is still a tiny fraction of digital ad spending

And a blip in the larger picture

It’s also growing more slower than TV and the Internet in

the first 5 years

But!

“Native” mobile ads are finally appearing

• Ads in timelines • Sponsored content• Geo-located ads• Shareable ads• Activity-linked ads (e.g.,

ads in natural pauses during mobile game use)

Tablet screens are

bigger!

Most “mobile” ads are still web search and display ads viewed

on mobile

Google completely owns mobile search

Facebook has a nice chunk of mobile display

APPS

Almost 1 million available apps

App downloads should hit 55 billion this year

People spend more time on apps than mobile web

App revenue growing fast, but still not huge

Includes app revenues on all major mobile platforms

Most app downloads are free

“Freemium” is the dominant model

Games are the biggest money makers

Mobile is a “platform market”

“Platform markets” standardize around one or two

platforms

In mobile, it’s a two-horse race race

Android is winning in smartphones

Especially in China

It’s the same story in tablets

Android is now the biggest platform of all!

Despite this, Apple dominates app revenue

Apple also sends most m-commerce traffic

And developers strongly prefer Apple

Why?

1. Android has a fragmentation problem

2. iOS is where the money is

3. And Apple has wealthier users

Developers’ interest in Android has waned

For manufacturers, mobile has meant a windfall for a select few

Namely, Apple and Samsung

But Chinese manufacturers are starting to take off

Last question…

Should you be “mobile only?”

No.

People like big screens

You should be “multi-screen.”

Digital is now a 4-screen world…

Maybe 5 or 6 screens soon…

So you should be everywhere!

Thank you very much.

Henry BlodgetFounder, CEO & Editor-in-Chief, Business Insider

Alex Cocotas, Analyst

Marcelo Ballvé, Editorial Director

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