Top Mobile Internet trends of 2011 by Mary Meeker

Mary Meeker came from Morgan stanley and joined Kleiner Perkins as a partner.  She is renowned for her technology analyst who gained renown for predictions on Internet growth in the 1990s.  Called “Queen of the Net” by Barron’s in 1998, Meeker made her name with a publication entitled “The Internet Report” in 1995 and her bullish calls on Web companies, including Amazon.com Inc. and America Online Inc.

Here are some highlights and insights as well as commentary from the 56-page slideshow that was presented at a Google event last Thursday:

1. Mobile platforms have hit critical mass.

Meeker attributes Apple’s iOS products (iPad, iPhone, and iPod) as changing the mobile industry forever, and each subsequent Apple mobile product has sold exponentially better than other iOS devices.

Android devices, with over 70 million shipments in the first 9 quarters after launch, has hit critical mass as well. Not only are a lot of people buying mobile devices, they’re ready and willing to adopt them right after launch.

2. Real-Time Social Features Are Accelerating Mobile Usage Growth

Location sharing (e.g., checking in to FourSquare), communication (e.g., Twitter), music sharing (e.g., Spotify) and doing all of the above in one application (e.g., mobile Facebook) are what’s driving mobile usage — KPCB dubs it “SoLoMo”, for Social, Local, and Mobile. Those are the 3 trends, definitely, that everyone is betting on.

Right now:

  • Facebook has 200 million mobile Facebook users, compared to 50 thousand in September of 2009. And mobile Facebook users are 2X as active as desktop Facebook users.
  • 50% of Twitter’s total active users are mobile, and 40% of all tweets are from mobile users.
  • 50% of all Pandora users subscribe from a mobile device.

The takeaway is social media platforms are being driven by mobile users. Likewise, access to these social media features on the go is driving mobile usage. Marketers interested in either social media or mobile marketing need to pay attention to both.

3. Mobile Data Traffic to Go Through the Roof

We’ve come a long way in mobile adoption, but the next 5 years will show even more incredible growth. According to the presentation, there will be as much as 26x compound annual growth in mobile data traffic over the next 5 years.

4. Mobile Advertising has Higher Efficacy vs. Other Advertising Media

Mobile advertising bests other advertising media (by a long shot in most cases) in terms of reach, targeting, viral, and transaction efficacy. You’re likely to be more successful and get more for your money with mobile marketing.

As efficient as it is, though, no one is saying that mobile should replace traditional media completely. Mobile can augment other media, making it more measurable and effective. The classic example, and most widely used practice, is to incorporate text message marketing with television or other traditional media: the SMS call to action in the ad prompts the user to send a text message in to redeem your offer (and possibly join your mobile marketing list for future SMS marketing offers). Integrating SMS marketing with other marketing initiatives strengthens your program all around.

5. Mobile is Revolutionizing Commerce

Mobile, particularly smartphone mobile adoption, is changing the way consumers shop for products and interact with brands. The Top Mobile Internet Trends presentation highlighted 4 significant mobile commerce developments:

  • Location-based services — e.g., driving opt-in users to stores in real-time with LBS coupons (e.g., Shopkick)
  • Transparant pricing — e.g., shopping/coupon apps that enable consumers to compare local store prices by scanning product barcodes with their smartphones (e.g., ShopSavvy)
  • Discounted offers — social coupons and flash sales for local services and products (e.g., Groupon)
  • Immediate Gratification — instant digital product or content delivery (e.g., download an MP3 to your iPod over the air)

Summary

This year, the tipping point will be reached — more than half of the people in developed markets will have smartphones (and smartphone sales have already eclipsed PC sales, earlier than expected). Tech advances for richer mobile experiences, like HTML5 and NFC developments, will only add to the growing move towards mobile.

The presentation is full of other compelling mobile data points and trends. Including:

  • Mobile will hit critical mass (on a global scale)
  • Social will accelerate mobile usage
  • Search traffic will increasingly come from mobile devices
  • Top activities on mobile devices will include: gaming, sharing information and shopping
  • Time spend on mobile devices will increase, dwarfing desktop internet usage
  • Global shipments of smartphones and tablets surpassed shipments of desktop PCs and notebooks in Q42010. This gap is expected to increase over the next few years.
  • 60% of time spent on smartphones is new activity for mobile users.
  • Global mobile data traffic should grow 26x over next 5 years.
  • Global mobile 3G subscribers grew 35% year over year and now number about 726MM.
  • Japan’s social networking site, Mixi, illustrates the importance of mobile: 85% of page views on mobile vs. 14% 4.5 years ago.
  • 50% of total active Twitter users are on multiple platforms (mobile) compared to 25% a year ago. 40% of all tweets are sent via mobile.
  • 50% of Pandora’s total user base subscribes to the service on mobile.

Other Key trends to watch, according to Meeker and Murphy:

  • Ubiquitous Computing – Real-time connectivity / 24×7 / in palm of hand
  • More Affordable – Device and data plan pricing falling
  • Faster – Networks and devices improving (owing to Moore’s Law)
  • Personal – Location / preferences / behavior
  • Fun to use – Social / casual / reward-driven marketing
  • Access nearly everything anywhere – “Stuff” in cloud
  • Explosion of apps and monetization – More and making more money
  • Measurable real-world activation – Driving foot traffic to physical stores
  • Reward / influence behavior in real-time – for exactly the right people

And right behind those…

  • HTML5 vs. downloadable apps
  • NFC (Near Field Communication) for payment / offers / loyalty
  • Consumer led mobile health for monitoring / diagnosis / wellness
  • Rapid enterprise adoption of tablets for productivity
  • Tipping Point – > 50% population in developed markets will have Smartphone
  • “SoLoMo” – Social / local / mobile converging
  • “Gamification” – Ultimate way to engage a new generation of audiences
  • Empowerment – impact of empowering billions of people around the world with real-time connected devices has just begun

Other insights

  • We’ve progressed sequentially from mainframes to mini-computers, terminals, PCs, handheld devices, and now mobile devices. In this time, prices has steadily fallen, computational power has risen, and the relevance and utility for everyday people has risen.
  • Mobile devices with their multiple peripherals, operating system, diverse application library, and net connectivity is and will vastly disrupt the business models of a large number of industries in terms of product viability for customer classes, channels, and communications.
  • Streaming media and cloud-based software & information sharing are going to reduce the need for local data storage in instances where limited utilization and shared information scenarios across multiple devices and people, prevail.
  • Increased voice, audio, and video streaming will further commoditize carriers’ services, whose business models have already been blurring over the last 10 years. The extra data burden from video will likely cause headaches they’ll have to figure out how to deal with. With the increasing option to connect via WiFi through various services, people will increasingly consider the prices they’re paying carriers for various media options in comparison to what their actual usage is, and the potential for saving money through 3rd party online players like Netflix, Pandora, and Skype, and integrated services like Apple Facetime.
  • Interactive and relevant advertising on mobile devices will become a lot more prevalent, however the opportunity for people to sign up for premium services from an organization in order to remove ads AND unlock extra features, will drive the building of more hybrid business models.
  • More companies will be developing mobile software products than ever before, along with digital multimedia assets to go along with it. These will serve not only customers and the public, but also employees, partners, and other stakeholders. Wherever efficiency and effectiveness in data access & interaction, integrated across multiple platforms, can be realized to a business advantage, it will be realized.

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