Venture capitalist Mary Meeker, a partner at Kleiner Perkins Caufield & Byers, has released the 2018 edition of her highly-anticipated Internet Trends report at the invitation-only Code Conference, which convenes every year to discuss and analyze current internet trends and the impact of digital technology in times to come, and more.
Her report comprised 294 slides, covering everything from the decline in global smartphone shipment growth to China’s obsession with creating innovative and complex artificial intelligence systems and the increasing cooperation between the country’s civilian and military AI ventures.
Here are some of the most significant takeaways from the report presented on Wednesday by the 59-year-old Meeker, who was listed by Forbes as the world’s 77th most powerful woman, in 2014.
2017 was the worst year in terms of new smartphone unit shipment growth, which recorded a pathetic zero percent as compared to the 2% growth in 2016.
The decline is indicative of the fact that the smartphone market is reaching, or has already reached a saturation point, as more and more people, the world over, are becoming smartphone owners.
The stats are hardly less dismal when it comes to internet user growth, which is down from 12 percent in 2016 to a paltry 8 percent last year. Again, it’s a clear case of market saturation as more than half the world’s population is connected.
“The reality of all for the business people in the room, when you get to a market, when you get to 50% penetration, new growth becomes a lot harder to find. That’s where the industry is at a really high level,” Meeker said.
However, despite the decline recorded in smartphone shipments and internet user growth, U.S. adults devoted 5.9 hours of their daily time to digital media in 2017, an improvement from the 5.6 hours recorded the previous year.
By the way, out of the 5.9 hours spent online, 3.3 were spent on mobile, which is the major reason for the overall increase in digital media consumption.
Regardless of the fact that high-end phones like the iPhones and the Samsung Galaxies are continually being released, the average selling price of smartphones has experienced a downward trend, indicating that lower-priced phones are encouraging more and more people in developing countries to own smartphones.
Voice-based technology is advancing in leaps and bounds, as is evident from the number of Amazon Echo devices sold in 2017, which grew from an already impressive 20 million units in the third quarter of the year to a whopping 30 million by the end of the fourth.
With more than two billion Facebook users; some 200 million Pinterest accounts; 170 million Spotify users; and around 125 million Netflixers, to name but a few, there is no dearth of data, by any stretch of the imagination.
It’s, actually, great, in terms of being able to provide enhanced consumer experiences, but in light of the recent data theft scandals and allegations, companies are in a “privacy paradox.”
Meeker says that the entire issue of data can be made really simple to understand in just three sentences.
- “Internet companies are making low price services better in part from user data”
- “Internet users are increasing their time on internet services based on perceived value”
- “Regulators want to ensure data is not used improperly and not all regulators think about this in the same way.”
However, as far as the Chinese are concerned, the “privacy paradox” shouldn’t really come into play, as people in China are, relatively, more open to sharing their data in exchange for consumer benefits than Americans.
Tech companies have become a big part of U.S. business, accounting not only for 25 percent of the country’s market capitalization but also for six of the top fifteen R&D and capital spending companies.
U.S. tech giants like Amazon, Alphabet, Apple, Google, Facebook, Intel, and Microsoft are the top spenders among the tech companies.
“If we look at tech companies versus other industries in the United States, tech companies are the largest fastest growing RND and cap expenders,” says Meeker’s report.
While physical sales are on a downward spiral, online retail has done remarkably well, registering a 16 percent growth in the U.S., last year (2 percent better than the growth figures in 2016), with Amazon account for 28 percent of 2017’s growth.
There is diversification among big tech companies, what with Amazon venturing into advertising and Google evolving from an ads platform to become an e-commerce site through its Google Home Ordering.
Subscription services companies have been growing exponentially, with Netflix, Spotify and The New York Times up 28, 48, and 43 percent, respectively, year-over-year.
With the growing inclination among employees towards flexi-time schemes and work-from-home options, freelance employment has grown three times faster than the combined growth across all workforce types.
On-demand workforce witnessed a 23 percent growth in 2017, with Uber, Airbnb, Etsy, Upwork, and Doordash leading the way.
Artificial intelligence is the name of the game, now, and internet behemoths like Amazon and Google are expected to introduce more and more AI-based platforms, in times to come.
Transportation trends are also changing with the times, as an increasing number of people are looking at rideshare options; hence, people are spending less on new cars, preferring to hold on to their current cars.
China is fast becoming an important center for the world’s biggest internet companies, in terms of market cap, and with nine of the world’s twenty biggest internet firms headquartered in China, it is only behind the U.S. which has eleven.
Compare that with five years ago and you’ll find that China had only two as opposed to US’ eleven.
Despite Donald Trump and his anti-immigration tendencies, U.S. tech companies continue to thrive on immigrant power, with 56 percent of the most prestigious names among U.S. tech companies having been founded by first- or second-generation immigrants.
While Alibaba is spreading its tentacles beyond China, Amazon continues to dominate in so far as raking in the revenue is concerned.
Watch Mary Meeker’s presentation here.