Benedict Evans' Next-Gen S-Curve

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The Direction of The World on The Heels of Big Data

I am not going to use fancy slides or (un) supported data to articulate my viewpoint. So at the risk of coming across as very un-investment bankish, I am going to make some bold predictions about Big Data.

I use the term Big Data as being insightful and predicting.  If you have a truck load of data that just sits in some file system, that's just dumb data.  For that data to be useful, decision makers should be able to derive insights from it or, the more innovative example, the data feeds into a machine-learning, siri-like or Google Now-like engine based on natural language processing. 

With machine generated Big Data, the system / engine / concept has to undergo a series of trial and errors. For machine-learning engines based on Big Data to make accurate decisions or prediction, there has to be data about me or you that tells the Big Data engine what you like and what you don't. Consider this. LinkedIn sends you a notification message stating that someone completely unrelated to you, professionally speaking, with no shared connections or interests, wants to reach out to you. If you click on 'Ignore,' LinkedIn's engine will capture or 'learn' that I am not interested in a particular person from a particular industry, etc. Hopefully, in the future, LinkedIn will send me more 'relevant' notifications. The more notifications it sends me and the more you interact with the system, the more data is being generated, thereby enabling LinkedIn to learn about my preferences.

So you see what I mean about Big Data being a trial and error concept. Big Data-based machine-learning will stay in a perpetual state of trials and errors because it has to be constantly more accurate at every interaction with a human, or, in the future, with another connected device. In a way, you can think about the machine-learning curve to extend out into infinity until Technological Singularity - a topic I've covered in an earlier post.  Technological Singularity is the convergence of humans and machine. The human will always be the end user though. Well, that depends on what you define as 'human' in the next 50 years. It may be an entity with a consciousness, period.

I use LinkedIn only as an example to illustrate Big Data based engines, but one could use any machine-learning engine based on natural language processing or sentiment analysis engine, all layered on Big Data. Another great example is a startup in beta mode, Stitch Fix. Stitch Fix's model is to ship a box of clothes to women based on their dressing style. I am not going to delve in to the details of the business model, but the point I am trying to make is that every time the users ships back the clothes she doesn't want to keep, the engine updates itself to reflect a more accurate sense of the user's dressing style.  So the next time, Stitch Fix sends a box of clothes to the user, it hopes to send clothes that is as per the user's preference.  Again, this illustrates the constant trial and error learning based on all that data the engine collects about the user - Big Data! 

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Tons of Smartphone Demographics And Trends Released This Week

Lots and lots of data released over the past few days from research firms such as IDC, Gartner, comScore, Pew and other independent research houses. We start at the top with Mobile phones and then work our way deeper in to Smartphones, Platforms and finally Apps. Lets dive straight into it!

Source: Business Insider

The first chart, from BI, shows that smartphone sales are on the rise on a per quarter basis and feature-phone sales are on a decline. Smartphones accounted for the 49% of total mobile phone sales in the first quarter of 2013, coming tantalizingly close to overtaking feature phone sales for the first time ever. It's no surprise that smartphones sales will eventually overtake feature phone sales and do it very soon.  The reason for the growth in smartphone market share over that of feature phone's is not just the increase in smartphone sales but also the shrinking sales of feature phones, which declined 21% y-o-y. A majority of the world's population that owns a phone owns a feature phone so there is plenty of room for growth for smartphones.

Source: Pew Research

The second chart shows the same trend; increase in smartphone ownership and decrease in feature phone ("Other cell phone") ownership. Mind you, this chart is based on a survey of adults in the U.S. rather than on a global research methodology.

Source: Pew Research

So who buys smartphones? In a nutshell, the rich(er) and young(er). Obvious, right? Yes. So lets move on.

Worldwide Mobile Phone Sales to End Users by Vendor in 1Q13 (Thousands of Units)

Company	1Q13 Units	1Q13 Market Share (%)	1Q12 Units	1Q12 Market Share (%)
Samsung	100,657.7	23.6	89,284.6	21.1
Nokia	63,215.2	14.8	83,162.5	19.7
Apple	38,331.8	9.0	33,120.5	7.8
LG Electronics	15,615.8	3.7	14,720.4	3.5
ZTE	14,606.6	3.4	17,379.7	4.1
Huawei Technologies	11,114.8	2.6	10,796.1	2.6
TCL Communication	8,515.9	2.0	7,396.6	1.7
Sony Mobile Communications	7,955.5	1.9	7,898.4	1.9
Lenovo	7,778.9	1.8	5,820.6	1.4
Yulong	7,478.8	1.8	3,146.6	0.7
Others	150,550.6	35.4	150,229.40	35.5
Total	425,821.6	100.0	422,955.4	100.0

Source: Gartner 

Samsung was the numero uno mobile phone (including feature phones) vendor in the mobile phone market where sales nearly touched 426 million units in the first quarter of 2013. A subset of mobile phones, smartphone sales totaled 210 million units in the first quarter of 2013, up a whopping 42.9 percent from the first quarter of 2012! 

Worldwide Smartphone Sales to End Users by Vendor in 1Q13 (Thousands of Units)

Company	1Q13 Units	1Q13 Market Share (%)	1Q12 Units	1Q12 Market Share (%)
Samsung	64,740.0	30.8	40,612.8	27.6
Apple	38,331.8	18.2	33,120.5	22.5
LG Electronics	10,080.4	4.8	4,961.4	3.4
Huawei Technologies	9,334.2	4.4	5,269.6	3.6
ZTE	7,883.3	3.8	4,518.9	3.1
Others	79,676.4	37.9	58,537.0	39.8
Total	210,046.1	100.0	147,020.2	100.0

Source: Gartner 

Samsung wins the war here too with a 31% market share for smartphone sales in 1Q 2013.

It's a different story in the US though...

Top Smartphone OEMs 3 Month Avg. Ending Apr. 2013 vs. 3 Month Avg. Ending Jan. 2013 Total U.S. Smartphone Subscribers Age 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Jan-13	Apr-13	Point Change
Total Mobile Subscribers	100.0%	100.0%	N/A
Apple	37.8%	39.2%	1.4
Samsung	21.4%	22.0%	0.6
HTC	9.7%	8.9%	-0.8
Motorola	8.6%	8.3%	-0.3
LG	7.0%	6.7%	-0.3

Source: comScore

Apple takes the top spot in the US for smartphone market share in 1Q 2013 followed by Samsung.

However it's a different story in the platform war...

Top Smartphone Platforms 3 Month Avg. Ending Apr. 2013 vs. 3 Month Avg. Ending Jan. 2013 Total U.S. Smartphone Subscribers Age 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Jan-13	Apr-13	Point Change
Total Smartphone Subscribers	100.0%	100.0%	N/A
Google	52.3%	52.0%	-0.3
Apple	37.8%	39.2%	1.4
BlackBerry	5.9%	5.1%	-0.8
Microsoft	3.1%	3.0%	-0.1
Symbian	0.5%	0.5%	0.0

Source: comScore

Google's mobile platform aka Android, beat out iOS in the US with 52% market share and 74% market share globally. Bye bye Blackberry, with a decreasing market share.

Here's an interested table that spells out the demographic differences  between Android and iOS owner.

Source: Pew Research

Android is more common than iPhone among the young and the poorer (that's putting it blatantly). As you can see smartphone owners who earn more than $75,000/yr are more likely to be iPhone owners than they are Android owners. This is some interesting analysis that offers some insights into the iPhone Vs. Android engagement conundrum.

Let's move deeper into the smartphone ecosystem and talk about App Marketplaces.

Source: Distimo

In Google Play, the only game in the Top 5 Free Apps is Candy Crush Saga, while all the other Apps are Messaging and Voice Apps, with WhatsApp taking the top spot. It seems Android users are concerned with keeping in touch while playing the occasional game on their device. Looking a bit deeper into this analysis, it seems Android users are more cost conscious than their Apple counterparts since Android users seem to use messaging and voice Apps based on TCP/IP, which tends to be an inexpensive alternative to regular voice/sms plans IF bundled appropriately with a data plan and used over WiFi.

Source: Distimo

Moving on to the Top 5 Apple App store Apps, its mainly games! Looks like iPhone users have a lot of time on their hands...hey don't judge! Keep in mind these stats are for the month of May 2013, so this stuff keeps changing. Another point is that critical apps tend to be downloaded first and once when the phone is new. For example, you'd download Google Maps, a very popular app, once and keep it... you wouldn't download it every month. With games, it keeps changing...games are more like fads.

Source: Distimo

In terms of paid apps, Android users seem to prefer productivity apps with the occasional game. 

Source: Distimo

For iPhone users, the top paid app for May 2013 is WhatsApp. Surprising? Not really, because WhatsApp is a paid download on iOS and a free-for-one-year app on Android. So in analyzing app data between platforms we need to keep these idiosyncrasies in mind. And please don't ask me what 'Pou' is, I have no idea!

Distimo, the App analytics company does an awesome job of organizing this data on its interactive Leaderboards. You can slice-n-dice app data by platform, country, free/paid, app category and more. Here's a chart to whet your 'app'etite.

So that about sums up all the Mobile phone related data released last week. Some conclusive trends: iPhone is dominant in the US, Android is growing globally and in the US. iPhone is for the rich. Android is for the young and savvy. And Blackberry is for...uhh...ummm...well here's a picture that sums it up.

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How Google Search Works. Get the Gory Details!

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Watch The Google I/O Developer Conference Live...HERE!

Watch Google I/O as it happens right here. You can find a detailed schedule of the events you want to watch or just start off with the keynote below. The event kicks off on May 15th, 2013 at 9AM PST.

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The Future Of Mobile Is Summarization Tech, Says Marissa Mayer

Marissa Mayer, a proponent of Summarization Tech spoke at the Wired Business Conference. She predicted that “summarization will be a core technology on mobile.” Mayer put her money where her mouth is with Yahoo!'s acquisition of Summly, a news reader app based on summarization technology.

If you want to know about the trends in Summarization Tech and the reasons why it's the next wave on Mobile, read my blog post about Summarization on Google Glass.

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The '3rd Mobile OS' Keeps Popping Up Again

The WSJ posted an article about the battle to become the 3rd Mobile Operating System. The article talks about the contenders, ranging from BB10 and Windows to new entrants such as Firefox and Ubuntu (both based on HTML 5).  A couple of months ago I blogged about the 3rd Mobile OS.  In my view Ubuntu has a good chance to make it to numero tres, and maybe even challenge the top dogs who, together, own close to 90% of the smartphone OS market.

Needless to say, the 3rd placeholder is vying for the emerging market.  Currently, close to 2 Billion people are yet to come online. 

Source: Enders Analysis via ben-evans.com

A vast majority of potential onliners will connect to the internet via inexpensive smartphones as opposed to laptops or desktops, which have anyways been disrupted by Mobile. However, the race to capture the emerging market is an even more competitive one than the one to be crowned 3rd place. At the moment, the Mobile OS that has captured the number one spot (in terms of overall market share) AND the emerging market, is Android. iOS, on the other hand, is not (yet) an emerging market player due to its marriage with the iPhone hardware, which makes it a high-end smartphone. With a cheaper iPhone, the emerging market place is going to intensely heat up!

It's a long race and the player positions keep changing with new players entering the arena from different directions. May the best horse win.

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What's The Deal With Acquiring News Reader Apps?

LinkedIn started the trend by acquiring Pulse news for around $90 Million. Then Summly was purchased by Yahoo! for $30 Million and Google gobbled Wavii for around the same amount.

All three acquisitions have been in the news reader space. Summly and Wavii are especially noteworthy acquisitions because of the summarization technology these news readers are built on. Artificial Intelligence and Natural Language Processing are the underlying  coding technologies that summarize a news article into a short paragraph; perfect for mobile snacking. But lets not leave Pulse behind. This news reader app lays out news headlines in a tile format for quick browsing and reading. The usual sharing and favoriting are built right into all three apps. I wouldn't be surprised if LinkedIn builds some kind of summarization technology into Pulse to bring it on equal footing with Summly and Wavii. In fact since its acquisition, LinkedIn has already added its latest 'LinkedIn Influencers' as a news source to Pulse. Now, instead of logging into LinkedIn to read your favorite influencer's updates, you can do so directly in Pulse - in that concise tile format.

So lets come to the meat of this post. Why is an internet search company, an internet media company and a professional networking company snapping up mobile news reader apps? In a word, content. In 3 words, content in context. We are slowly but surely realizing that mobile is the future - that's the context - mobile. Accessing news is one of the top tasks we perform on our smartphone, so that's content. So you take news (content) and shove it down mobile's throat (context) and you get Summly, Wavii and Pulse at the other end (hmmm maybe this analogy wasn't the best. don't get me wrong, I am not comparing these apps to waste matter!).

In a Mobile world, you have to keep users engaged; have them keep coming back to your app to consume your content. Increased engagement means more eye balls, which mean better advertising revenue. For LinkedIn, more eyeballs means a larger professional network.

As per comScore, accessing news on smartphone represents 49% of usage while on Tablets, it represents 59% of usage.

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Source: Mobile Future in Focus 2013, comScore

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Top Mobile Media Activities by Share of Smartphone & Tablet Users

Source: comScore MobiLens & TabLens, U.S., 3-month Avg., Ending Dec-2012

So this takes care of content. How about context?

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Source: Mobile Future in Focus 2013, comScore

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Share of Total Time Spent Online for Selected Properties

Source: comScore Media Metrix Multi-Platform (Beta), U.S., Dec-2012

We can see that mobile is growing, but not only in terms of replacing desktop usage but also creating net new usage as mobile can be used at times and places that a desktop cannot create 'usage.' Companies are realizing this trend and creating ways in which we can snack on content in the mobile context. Simplified and summarized are driving mobile engagement. We're seeing this happening in front of our eyes with news and social media updates. Google can use Wavii's technology and apply it to Google+. You'd be able to get summarized versions of updates. In fact I see Google's purchase of Wavii as a stepping stone to summarization on GLASS.


Is it too late to acquire a news reader app? Facebook, AOL, HuffPo, Business Insider, NYT, are you guys shopping around? If you haven't come across a French startup called Mobiles Republic, then let me point you in its direction. Mobiles Republic has some pretty neat and simplified news reader offerings.

What's next? How will we consume other forms of content on mobile? Videos? Let's cover that in another post. Is anyone using an app to read this blog?

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