Every year, Mary Meeker puts together her famous Internet Trends report. Mary Meeker is a partner at Kleiner Perkins, a well-regarded VC firm, and was previously at Morgan Stanley where she covered the tech industry. She has become increasingly defined by these voluminous and prescient reports. While these reports won't describe completely new ideas - they are a description of large trends, after all - they tend to do a very good job of highlighting and adding quantifiable metrics to thematically important ideas. You can find the 2017 edition here: Internet Trends Report
The key take-homes of the 2017 report are below:
- The smartphone market is still growing, but the growth is shrinking (negative 2nd derivative). - New phones globally are 80% Android.
- 3.4B global internet users, 2.8B global smartphone users
- Content consumption is mostly mobile. Desktop usage is stable, but growth is all from mobile.
Advertising and Commerce
- Digital advertising growth is large and accelerating (22%)
- Desktop spend is declining. Dollars are shifting to mobile.
- Print overindexes on consumption to media dollars. Mobile underindexes.
- Global internet ad spend will exceed global TV spend this year
- Facebook and Google dominate ad spend. But non-duopoly ad spend is still growing materially - 9% YoY and is a nearly $25B market
- Engagement is the primary metric for social media marketing. It is hard for social media marketers to track ROI.
- Targeting and measurement is a theme for major ad platforms
- For video, the most popular formats were: mobile app reward, social click-to-play, and skippable pre-roll - by a significant measure
- Increased value seen in dynamic creative, location-based services and effective use of UGC
- Ads are increasingly supporting transactions within them, esp on FB, Snap, etc
- 2.6B gamers, v 100M 20 years ago, APAC is roughly 1/2 of the global market
- Continued movement to more social, multi-player experiences
- Console gaming is more engagement than Facebook
- eSports is massive and growing quickly
- TV cord cutting continues to be prevalent, largely because of cost - costs are rising while subscribers are decreasing.
- Number of cable channels watched continues to decline.
- Subscriptions are becoming increasingly dominant for music and video
- Public and private clouds are both growing as a percent. AWS retained 57% adoption, but Azure has grown to 34% and Google is at 15%
- Shift from on-prem to cloud software has changed license models but also purchase decisions - with decisions often being made lower in the corporate hierarchy
- Design is increasingly important with enterprise software companies increasing the ratio of designers to software engineers materially over the past 6 years
- Growth of adoption of cloud services and the ease of making them has led to ever-increasing security issues
- Private (non-state) companies now nearly 50% of MSCI (China's DJIA), up from 5% in 2005
- 700M mobile internet users. Growth stabilized at 12%, usage per person increasing
- Internet is 55% of media consumption - much more than TV
- Tencent, which owns WeChat, QQ, Tencent Games, Tencent Music, etc is very dominant
- Gaming is ~85% of user-paid revenue in China, v ~60% in the US (video is much higher in the US)
- China is the largest gaming market in the world
- Livestreaming is a growing market and is already very lucrative for the stars (tipping is increasingly common)
- Measured by number of trips, China is the leader in the on-demand trip market. Cars are huge, but bike rentals are growing quickly (> 100% M/M growth). On-demand phone charging is also growing.
- Mobile payments are growing > 100% Y/Y, especially popular for small transaction sizes
- Online advertising is $40B, growing at 30% annually
- Highest growth of all large economies, but nearly the lowest GDP per capita.
- Internet usage growing quickly, now at 355M users, 27% of population - up from 4% in 2009
- More Google Play downloads than the US. Only two Indian apps in top 10 - Hotstar and and JioTV (both entertainment)
- Smartphone cost still very high as a percent of GDP per capita
- 85% of paper money (large notes) eliminated overnight by government as effort to reduce "black money" - significant boost to digital payments. Paytm is a prime beneficiary.
- Reliance Jio rolled out massive nation-wide wireless coverage at very low cost that has completely changed the economics and market share of the wireless market over the past 2 years
- 46% of internet users consume primarily in local language, causing some fragmentation given large number of languages (29 spoken by at least 1M people)
- High endemic corruption, high bureaucratic, poor infrastructure, and poor female labor participation make it very inefficient to run or start a business
- Medical tools increasingly digital and connected
- Consumers are increasingly likely to share the health info with major tech companies, especially Google, Microsoft, Samsung and Apple
- Electronic health records have gone from 21% in 2004 to 87% today in the US, with a 7x increase in hospitals providing access to medical records for patients since 2013
- The total number of peer-reviewed health articles doubles every 3.5 years, v every 50 years in 1950
- Using DNA as a pre-screen for clinical trials has a marked impact on success
- Mathematical models that emulate human physiology, care processes, and the healthcare system are increasingly accurate at predicting clinical trial outcomes
- Tech is 40% of the top 20 companies globally by market cap, v 20% in 2012
- Tech IPOs are strong relative to historic numbers, soft relative to recent history. Tech M&A is strong relative to history
- USA has the 9th highest debt / GDP level in the world (France is 12, UK is 15, Japan is 1)
- Entitlements is 63% of spending, v 45% 25 years ago; defense is down to 15% from 24%
- Entitlements is social security (37%), medicare (28%), medicaid (15%), and income security (19%)
- USA household debt levels are right back to 2008 levels, but student loans are a much greater percent
- 60% of the most highly valued public tech companies are founded by 1st or 2nd generation immigrants, including the most valuable company in the world - Apple - from Syrian immigrants, which would be blocked by Trump's travel ban
- 50% of the most highly valued private tech companies are founded by 1st generation immigrants