The Future Of MobileHenry BlodgetCEO & EIC, Business Insider

2+ billion people online

2/3 of the world left to go

Something profound happened last year…

Smartphone sales blew past PC sales

PC growth stalled

Tablets are now driving all the growth in PC market

So the future is mobile

Where are we in the

mobile revolution?

Globally, we’re still early…

But growth slows after 50% penetration

U.S. and other markets are past halfway point

US smartphone growth starting to slow

Most future US smartphone buyers will be older and poorer

Source: Nielsen

So the focus is on markets like China, which now accounts for

~25% of smartphone sales.

China is already twice the size of US market

So, what do people do on mobile?

Well, first, they do pretty much

everything they do online…

They play games and social-network…

They listen to music...

They consume content…

They look at pictures and video.

They use their devices while they watch TV

They shop…

They use smartphones to make buying decisions in

stores.

They pay for stuff

They buy content

And they do stuff they DON’T do online…

Play Angry Birds, et al

Source: New reports, company releases, BI Intelligence estimates

Take and share pictures

BOTTOM LINE:

Mobile devices = More Internet usage +

New applications

Source: comScore, Telefonica, Macquarie Capital (USA), December 2011

Mobile has extended digital “primetime”

Share Of Device Page Traffic Over A Day:

Mobile usage is up across the board

People are consuming a huge amount of content through

mobile…

As mobile increases, all other media decreases

This leads to another key question…

Mobile advertising will be huge, right?

Hmm…

The “bullish” mobile-ad story is the huge gap between time-spent and ad spending.

Source: Mary Meeker (KPCB), eMarketer, IAB

But maybe there’s a good reason for that gap…

The screen is really small.

Mobile monetization still behind the desktop

Most “mobile” ads are mainly web search + display ads viewed

on mobile

Google completely owns mobile search

So Google owns mobile, too

Overall, mobile is still a tiny fraction of digital ad spending.

And it’s growing much slower than TV + Internet in the first

5 years

But!

“Native” mobile ads are finally beginning to appear…

• Ads in timelines (Twitter / Facebook)• Shareable ads• Location-based mobile ads

Location-based mobile ads can target users at the mall,

restaurants, car dealers …

Targeted mobile ads have higher CPMs

So, yes, mobile ads are just getting started

We are here

APPS

App Store downloads on pace to hit 60 billion by mid-2013

Smartphone users spend more time on apps than web

Mobile app revenue is growing fast, but still relatively small.

Because most downloads are free

“Freemium” is the dominant model

Games are the biggest money makers

Mobile has become a platform game.

Platform markets tend to standardize around one or two platforms.

Right now, mobile is a two-horse race.

Android has the largest smartphone platform globally.

Partly because it owns China

And it’s the same two-horse story in tablets

But a big mystery has arisen...

Where are all these Android users?

Apple is dominating app revenue

And mobile commerce and web traffic…

Do Android folks actually use their

devices?

Likely Answer:

Android is the mass market.

Mobile profits are going mainly to two players.

So, what’s the future?

Digital?

Yes.

Mobile?

Yes.

Mobile ONLY?

No.

Digital is now a 4-screen world…

Maybe 5 screens soon…

But mobile FIRST?

Only if you have a totally mobile-centric

app...

...Or you want to annoy your users and

customers.

Thank you very much.

Henry BlodgetFounder, CEO & Editor-in-Chief, Business Insider

Alex Cocotas, Analyst

Marcelo Ballvé, Editorial Director

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