Analysis: The internet of things

Analysis: The internet of things
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Last year Mary Meeker’s state of the Internet presentation promised, “you ain’t seen nothing yet” in terms of the reinvention of virtually everything brought on by technology and access to the Internet.

Late last week, the analyst-turned-venture capitalist from Kleiner Perkins Caufield & Byers, delivered her 2013 presentation on Internet Trends, with her colleague Liang Wu. The presentation, as always generated plenty of excitement and optimism from the tech industry and anyone who works in the digital world.

Beyond just the numbers, the key take out this year is that the pace of change has only accelerated as technology and connectivity transforms everything in its path. By way of example, Meeker highlights the re-imagination of business process, asset-heavy products and services, research and development, and learning tools, and points to scores of transformative businesses challenging and usurping the status quo. 

Age-old businesses and models are replaced with new ways of doing things. The Internet has indeed changed everything, and this change is showing no signs of slowing.

Mobile Growth

Of particular interest to everyone in marketing is the huge growth in mobile over the year.  Mobile devices will continue to displace traditional media and computers.

While there are now 2.4 billion internet users across the globe, which is up by 8% from last year, the vast majority of these new users are accessing the web using mobile devices.

Indeed, there are now 1.5 billion smartphone subscribers worldwide, up 30% from a year ago. Yet as there are more than 5 billion mobile phone subscribers on the planet, this represents massive growth potential as users switch from feature phone to smartphones.

Mobile devices now rack up 15% of all web traffic, compared with 10% last year.

Interestingly, while mobile usage continues to explode, and now accounts for 12% of US media consumption time, US marketers only spend 3% of their advertising budgets in that medium. The key take out here is that marketers are still spending money in the wrong places and mobile related marketing has huge potential for growth.

Faster, more powerful, better connected devices are enabling us to have better digital experiences, empowering us to do more. This in turn is fuelling our use of devices over traditional computers, and allowing us to increase consumption of content such as video, simply because the experience is a good one.

Photo- and video-sharing from mobiles is also growing rapidly. In fact, the number of monthly active users of Twitter’s iOS video service Vine which launched less than 6 months ago, already accounts for about 8% of monthly active users of the iPhone in the US. Snapchat’s number of “snaps” per day has grown to 150 million in April, up from virtually zero just last year.

Tablet Love Affair

Also showing steep growth is the uptake of tablets. As fast as the Apple iPhone became the smartphone du jour, the adoption of Apple’s iPad is growing at a rate three times faster. In the last quarter of 2012, tablet shipments surpassed those of desktop PCs and notebooks for the first time. For marketers, optimizing mobile apps and mobile websites has to be a primary goal.

New Technology Cycle

There’s a great slide in the presentation citing a quote from Digital Equipment Corporation founder Ken Olson from way back in 1977, "There is no reason anyone would want a computer in their home". This sits alongside a front cover of Barron’s magazine from 1999 with the headline “Amazon Bomb”. The point that Meeker is hammering home is that while adoption of smartphones and tablets continues to grow, we are already rapidly entering the next major technology cycle.

It’s also a new era of buzz words: wearables (tech-enabled clothing and accessories), driveables (connected cars), flyables (mini drones) and scannables (QR coded everything). And while some of this may be more than a little hard to swallow, Meeker insists that these new categories (and buzz words) are coming, faster even the emergence of mobile everything. This in turn will lead to a new revolution in personal data from the plethora of connected devices. Meeker reports that the amount of global digital information that is created and shared such as photos, videos, tweets, and more grew 9 fold in the last five years to nearly 2 zettabytes, and the emergence of sound and new layers of personal data will escalate this number further.

Learn From China

Interestingly, the number of iOS and Android users in China has surpassed the number of users in the United States. Meeker also revealed that Chinese people spend more time on mobile and the Internet than their US counterparts who spend more time watching television and listening to the radio. Meeker points to the massive amount of innovation in China in the form of mobile and service apps that we could do well to emulate.

More Geeks Required

On a final note from Mary, with the era of wearables, driveables, flyables, and scannables, fast approaching, Mary argues that the world needs more computer science graduates. In the US right now, she tells us that IBM, Intel, Microsoft, Oracle, and Qualcomm have 10,000 job openings between them. For marketers, this tech enriched future heralds the need to build symbiotic relationships with the geeks. It also marks a change in the marketing dynamic. While we all know that traditional advertising doesn’t work like it used to, there are huge opportunities to marry tech smarts with value-driven content to build brands.

Some of the many interesting factoids that Meeker revealed include:

·         More than 500 million photos are uploaded and shared every day. The majority of these are on Facebook.

·         About 100 hours of video is uploaded to YouTube every minute.

·         Smartphone users check their devices as much as 150 times a day.

·         There are more users of Apple’s iOS and Google’s Android mobile operating systems in China than in the US.

·         On average, 24% of people worldwide say they share “everything” or “most things” online.

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