Internet analyst Mary Meeker presented her annual Internet Trends report at yesterday’s Code Conference in California. In past reports, Meeker has identified early opportunities in messaging apps, mobile video and e-commerce.
The 213-slide presentation highlights slowing growth in several areas, but also includes optimistic predictions for voice recognition technology, user-shared video and messaging platforms as retail and payment channels. In the following blog, we will pick out some of the key insights and statistics you should be aware of.
AT A GLANCE
Here are some of the main highlights from Meeker’s report:
- There are roughly 3 million global internet users, but growth has been flat at 9% year-on-year.
- India is now the second-largest market globally for internet usage. It has over 277 million users, up 40% from a year ago.
- Internet advertising in the United States has grown 20% to $60 billion, with two-thirds of that growth coming from an increase in spending on mobile ads.
- By 2020, at least 50% of all searches online will be through voice or image commands.
- Messaging apps are moving from a way to communicate with other users to e-commerce platforms.
- China accounted for 70% of the roughly 6.3 billion on-demand rides requested around the world in the first quarter of 2016.
- There’s been a 263% increase in the last three years of non-technology companies acquiring and investing in tech companies.
Mobile advertising is one of the key areas highlighted in Meeker’s presentation. According to a recent report published on Research and Markets, the mobile marketing market will be valued at $98.85 billion by 2021. Online advertising is being boosted by the increase in mobile users. For example, social media giant Facebook’s ad revenue has grown 59% between 2014 and 2015. The report stresses the importance of targeted ads, and says advertisers need to find a way to be more entertaining and less invasive.
China’s 668 million internet users has created a massive market for mobile apps and services. The market is dominated by three Chinese companies - Alibaba, Baidu and Tencent. 71% of the time spent on mobile in China is divided between these companies. WeChat, a subsidiary of Tencent, saw the percentage of its users who made e-commerce purchases double this year.
On-demand transportation, another area flagged for growth in Meeker’s presentation, is now four times bigger in China than North America. Apple recently invested $1 billion in Didi Chuxing, a major Chinese ride-hailing service.
Messaging apps continue to grow in popularity, with video and image sharing driving users to apps like Facebook, Snapchat and Instagram. According to the report, there are now 3 billion images shared daily between 5 apps - 4 of which are owned by Facebook.
A report on the video streaming market estimated that, in the coming five years, 50% of viewers will stream online video from their smartphones. Meeker’s report says that with around 10 billion short video views per day, content creators must make videos natively designed for Facebook and Snapchat. At the moment, Snapchat is the preferred option for sponsored-videos because it drives huge engagement and is free from ad-blockers.
However, Facebook is making strides in this area. After initially rolling out live video for verified pages, it now allows all users to record and share live moments on the site. Meeker’s report identifies live sports viewing as another potential area for growth. Earlier this year, Facebook announced plans for “Facebook Sports Stadium”, which would provide real-time updates, posts from fans and professional analysis. In March, we also heard that Facebook was interested in buying the streaming rights to the NFL in its first public bid for rights to a major sports event.
Facebook currently owns the two top messaging apps. While the report doesn’t give much hope to smaller start-ups, Google recently announced it would launch its own messaging app. It will be named “Allo” and feature a built-in Google assistant. The company plans to release it later this summer for both iOS and Android.
Biometrics & AI
The main takeaway for many will be growth of voice recognition technology. Computer recognition of speech has gone from about 70 to 90% accuracy in the last five years. Users find voice commands easier than typing on their mobile and are increasingly using it for making phone calls and entering information.
IoT and smart cars are also pushing developers to adopt voice interfaces. The report believes Tesla and Google could make the United States the home of the auto industry once again. Google, Tesla and others are putting increased pressure on U.S. regulators to bring autonomous vehicles to American roads. At the same time, there has been a number of investments from car manufacturers in ride-sharing startups. In a previous blog, we looked at why partnerships between automakers and ride-hailing companies are becoming more common.
For more than 20 years, Mary Meeker’s annual reports have become a major point of discussion in the tech world. The report discusses numerous other trends, including slowing smartphone sales, the evolution of transportation and the rise of bots. You can watch her full 24-minute talk here.
Over the last 21 years, Meeker’s annual reports have become a major signal for the biggest trends in tech. This year, Meeker, a partner at Kleiner Perkins Caufield & Byers, tackles slowing smartphone sales; the growing mobile ad industry and ad blocking; the video-ification of social; the future of transportation; and the rise of messaging, bots, and voice-based assistants.
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