1. MOBILE IS
EATING THE
WORLD
BENEDICT EVANS

2. For the first time,
tech is selling to
everyone

3. Growth into the bubble
0.5
0.4
0.3
0.2
0.1
0.0
Billion people online
1995 2000
Source: ITU, a16z

4. Growth since the bubble
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Billion people online
1995 2000 2014
People online
Smartphones
Source: ITU, a16z

5. Growth into the future - everyone
Another 1bn people will come online, all due to smartphones
5
4
3
2
1
0
Billion people online
1995 2000 2014 2020
People online
Smartphones
Source: ITU, a16z

6. The unconnected are shrinking
100%
75%
50%
25%
0%
Global adult population
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015e 2017e
No Internet
No smartphone
[Source: a16z, World Bank, Apple, Google, Nokia]

7. The world in 2020
By 2020 80% of the adults on earth will have a smartphone
8
7
6
5
4
3
2
1
0
Population Adults TV audience Literate
adults
Mobile Online pops Smart phones PCs Consumer
PCs
Global population (bn)
Growth to 2020
2014
Source: World Bank, GSMA, a16z

8. Source: Apple, Intel, a16z
A new iPhone CPU has 625 times more
transistors than a 1995 Pentium
iPhone launch weekend: Apple sold 25x
more CPU transistors than were in all the PCs
on Earth in 1995
Everyone gets a pocket supercomputer

9. Yes, everyone
The utility of mobile increases as income falls
80%
70%
60%
50%
40%
30%
20%
10%
0%
Cellular coverage 3G coverage now 3G coverage by
2019
Improved water Electricity Mobile users
Sub-Saharan Africa population coverage
Source: Ericsson, McKinsey

10. The first thing this
changes is the
internet

11. Post-Netscape, post-PageRank
More time is spent in mobile apps than on all of the web
1,250
1,000
750
500
250
0
US time spent online (bn minutes)
June 2013 June 2014
Mobile web
Mobile app
Desktop web
Source: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S., June 2013 - June 2014

12. And remains totally unsettled
“Android”? Forks, Google Play
Services, Chrome…
“I installed an app on my Android smartphone ”
“Installed” an “app”? Web apps,
cards, APIs, push notifications,
social platforms, Google Now…
“Smartphone?” Watches,
Glass, wearables, TV,
tablets…

13. Ecosystem complexity
Ecosystem dynamics depend on where you are and what you’re doing
100%
75%
50%
25%
0%
Mobile platform share
Phone unit sales SF FB users Delhi FB users App store revenue Global Browsing China browsing
Android
iOS
Source: Facebook, Apple, Google, Gartner, Akamai, Baidu, a16z

14. New sensors, new businesses
Smartphones are far more sophisticated than PCs
A computer
shouldn’t ask
anything that
it should
know
Sensors
profoundly
change what
a computer
can know
Every new
sensor
creates a
new
business

15. Key: mobile leverage
I n creased sophistication from mobile is as important as the increase in scale
x
Personal
Taken everywhere
Frictionless access
Sensors, cameras
Location
Payment
Social platform
Much easier to use
= 10x the
opportunity
2-3x more
smartphones
than PCs by
2020

16. Facebook’s multi-stage rocket
Mobile ads have doubled revenue and built a $6.5bn run-rate business in just 24 months
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Facebook revenue by segment ($bn)
June-11 December-11 June-12 December-12 June-13 December-13 June-14
Mobile ads
Payments & Other
Desktop ads
Source: Facebook

17. Source: GSMA, WhatsApp
Global SMS: 7.5tr messages a year
WhatsApp: 7.2tr messages a year
(with just 30 engineers)

18. Fundamental change in costs
Mobile leverage plus collapse of development costs transforms early capital needs
2000
100 staff
1m users
$10m raised
Today
10 staff
10m users
$1m raised
YO
1 man
1m users
$0 raised

19. Mobile remakes the
tech industry

20. The smartphone industry dwarfs PCs
4bn people buying every 2 years instead of 1.6bn buying every 5 years
300
250
200
150
100
50
0
Quarterly unit shipments (m)
March-95 March-97 March-99 March-01 March-03 March-05 March-07 March-09 March-11 March-13
PCs
iOS & Android
Source: Gartner, Apple, Google, a16z

21. Mobile scale eats consumer electronics
Smartphones & tablets are now close to half of the consumer electronics industry
50%
40%
30%
20%
10%
0%
Smartphone & tablet share of global CE retail revenue
2008 2009 2010 2011 2012 2013 2014
Source: GfK, a16z

22. 1999 – 80bn consumer photos taken on film
This year – 800bn photos shared on social
networks
More iPhones & Android phones sold than
Japanese cameras ever
Source: Kodak, Companies, CIPA, a16z

23. Shift away from Microsoft
100%
75%
50%
25%
0%
Microsoft share of personal computing device sales
March-09 March-10 March-11 March-12 March-13 March-14
Source: Gartner, Apple, Google, Microsoft, Nokia, Blackberry, a16z

24. Apple, the minority smartphone player, is
overtaking the entire PC industry
* PC industry excluding Mac sales Source: Apple, Microsoft, Barclays Capital
250
200
150
100
50
0
Revenue ($bn)
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Apple
PC industry *
Microsoft

25. Tech centre of gravity moves from Seattle
and Finland (and Japan)
Old New
Computing platform Microsoft Apple & Google
Chips Intel ARM & Qualcomm
Mobile Nokia Shenzhen, China

26. Leveraging the mobile supply chain
Enabling new
categories
Wearables, Internet
of Things, Smart TV
Connected cars,
Drones etc etc
Flood of small,
cheap, low-power,
high-performance
smartphone chips
And pushing into
the data centre
From ‘big iron’
and Intel to ARM
and commodity
components

27. More interesting:
remaking other
industries

28. Technology dominates our attention
Source: Ofcom

29. And tech brands are huge
50%
40%
30%
20%
10%
0%
Share of top 100 global brand value
2004 2014
Google, Apple,
Facebook, Amazon
All tech brands
Source: Interbrand

30. What would children miss the most? Mobile
100%
75%
50%
25%
0%
‘Media you would miss most', UK aged 11-15
Boys Girls
Other
TV set
Games console
PC
Mobile & tablet
Source: Ofcom

31. Comms are going pure digital, pure mobile
Email is for grandparents
100%
75%
50%
25%
0%
Share of communication activity, UK
Adults 12 to 15
Photo messages
Messaging apps
Social networks
Phone calls
Email
Source: Ofcom

32. TV sets are in the minority
Computing devices used for video now far outnumber actual ‘televisions’
Source: Apple, Google, Nokia, Blackberry, Displaysearch, a16z
TVs
24%
iOS
13%
Google Android
23%
Chinese Android
9%
WP/RIM
1%
PCs & Macs
30%
Global install base of video players
“By the summer of 2012,
the majority of the
televisions you see in
stores will have Google
TV embedded”
- Eric Schmidt

33. Glass is eating the world
Close to a square foot of screen sold for every adult on earth
5
4
3
2
1
0
Global LCD display sales (billion square feet)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: Corning

34. Yet tech is still a pretty small industry
1,600
1,400
1,200
1,000
800
600
400
200
0
Global revenue, 2013 ($bn)
Music Films Online ads Books PCs Phones GAFA TV Advertising Mobile Apparel Cars
Source: Companies, PwC, a16z

35. Three phases of technology deployment
Companies that
write a check to buy
technology
Companies that
make technology
Companies that
are created with
technology

36. Companies that write a check for technology

37. Amazon: Sears Roebuck of the 21st Century
Tech company? Or retailer created with tech?
80
70
60
50
40
30
20
10
0
-10
Amazon since launch ($bn)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Revenue
Net income
Source: Amazon

38. But still (relatively) tiny
Amazon still only has 1% of US retail
1.25%
1.00%
0.75%
0.50%
0.25%
0.00%
Amazon North America ecommerce as % US retail*
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
* Excluding gasoline, building supplies, food & beverage service. Source: a16z, BLS, Amazon

39. Each wave of tech creates new businesses
Railways &
steam press Photography Color printing Internet &
Social
Hearst Life Glossy
Magazines Buzzfeed
… but these are all still media businesses

40. But are those ‘tech’ businesses?
Trucks & inter-state
highways
Trucks & inter-state
highways
Web &
Smartphones Smartphones
McDonalds Walmart AirBnB Uber/Lyft
Food Retail Travel Transport

41. When tech is fully adopted, it disappears
1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Source: Google
Frequency of ‘Railways’ in Google Books

42. Steel
1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Source: Google
Frequency of ‘Steel’ in Google Books

43. Computerization
1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Source: Google
Frequency of ‘Computerization’ in Google Books

44. Software
1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Source: Google
Frequency of ‘Software’ in Google Books

45. ‘Software is eating
the world’
Tech outgrows the
tech industry