Long known as one of the greatest interpreters of consumers’ and businesses’ activities on the Internet, Mary Meeker is at it again.
Today, Meeker, a partner at the A-list Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, gave her annual talk on Internet Trends.
Speaking to the Code Conference, Meeker laid out her vision of today’s Internet, and how it compares to what went online in years past, in a 197-slide presentation (see it here).
Unsurprisingly to anyone who’s been paying attention to what’s been happening on the Internet over the past few years, Meeker’s view of the dominant dynamics online boils down to comparisons between desktop Internet and mobile Internet.
And what does she conclude? The Internet is a dominant force in our lives, helping us solve previously intractable problems, and influencing the way millennials see their careers unfolding. And mobile phones are the biggest piece of all that.
While there were just 35 million people online accounting for 0.6% of the global population in 1995, there were 2.8 billion people using the Internet last year, 39% of the global population. Yet while the total number of people getting online is going up, the growth curve is slowing. The same is true for adoption of smartphones.
In 2014, Internet usage grew 8%, but that’s down from 10% in 2013, and 11% in 2012. Similarly, while there are now 2.1 billion smartphones in use, growth in 2014 of 23% was down from 27% in 2013, and 65% in 2012.
Still, Meeker suggests there is substantial room for future growth on smartphones, arguing that just 40% of global mobile users have smartphones. And with future growth of those devices, mobile Internet usage should surge.
It’s quite clear that the continued growth of mobile Internet usage is key to commerce, Meeker argues.
For example, although mobile advertising is currently just 14% of the total on the Internet, it is growing much faster than desktop advertising. The former was up 34% year-over-year, while the latter grew just 11% over the same time frame.
Meeker also identified what she called “vertical viewing” as an important trend to watch. Defined as using multiple devices–smartphones, laptops, TVs, and others–simultaneously, she explained that while just 5% of Americans’ time on devices five years ago was vertical viewing, it’s now up to 29%. And while the TV still dominates our viewing time, mobile devices are now our second-favorite choice.
At the same time, consumers are turning more and more to messaging apps, and companies like Facebook are increasingly seeing them as the gateway to online commerce. Recently, for example, Facebook added the ability to make payments through its Messenger tool–which passed 600 million active users in March. WhatsApp, also owned by Facebook, has more than 700 million users, many of whom can make phone calls through the app. And both those tools, and some of their biggest competitors, now offer a variety of ways to make purchases, and, ultimately, to drive revenue.
Meeker explained that six of the top 10 most popular mobile tools are now messaging apps, with WhatsApp, Facebook Messenger, and Snapchat, and China’s WeChat, Japan’s Line, and Korea’s KakaoTalk all setting themselves up as potential commerce portals.
It’s evident that China and India are two of the most important emerging markets on the planet, and Meeker put special emphasis on looking at one of China’s most important technology companies–Xiaomi.
The giant company shipped 61 million smartphones in 2014, up 227% year-over-year. That made Xiaomi China’s most important smartphone seller, outpacing Apple, Huawei, and other comers. Overall, Xiaomi controlled close to 15% of the total Chinese market, up sharply from three years earlier.
And back at home in the U.S., Meeker made an interesting observation about the radical differences in perceptions about work between millennials and their managers.
According to Meeker, 30% of millennials see “meaningful work” as the most important factor to job satisfaction, compared to just 11% of their managers. To 48% of managers, it’s about high pay, while only 27% of millennials agreed.
Which, if they read the tea leaves, means that companies have a rare opportunity to boost productivity by reducing their emphasis on pay, and putting it more on giving young employees work that they believe can make a difference. That seems like a smart bargain.
Finally, Meeker argued that one of the most exciting new trends she’s seeing include the rise of enterprise applications built to transform the way we work. Topping her list of examples is Slack, the white-hot enterprise communication tool headed up by Flickr cofounder Stewart Butterfield, which made it fun for co-workers to talk amongst themselves after years of slogging through difficult-to-use and poorly built tools.
Meeker also called out the blossoming commercial drone revolution. Although she is hardly the only one to see drones’ potential in business, she said that consumer drone shipments are up 167% year-over-year, to an expected 4.3 million units and $1.7 billion in revenue this year. She also identified a range of industries, from agriculture to mining to infrastructure inspection, and disaster response as likely industries that could benefit by using drones.