Mobile Is the Internet: Seven Reasons Why Mobile Is Eating the World
August 29, 2016
Benedict Evans, a partner at Andreessen Horowitz, recently spoke at the Mobile Marketing Association’s CEO & CMO Summit on why mobile is replacing the PC as the center of technology.
If you’re trying to put mobile into context – and who isn’t? -- Evans nailed the case for how and why it has become a central motivating force, a profoundly powerful ecosystem that is leading the way not only to new devices, from drones to wearables, but also to how we search for and discover content – and more. In short his speech was a wake-up call, a reminder that mobile is indeed both the present and future of technology, and business.
The stats alone are compelling; Evans noted that while there were 300 million PC units shipped last year, five times as many smartphones were shipped, signifying “a fundamental shift in scale.” In fact, mobile has ten times the scale of the PC, and by some estimates, five billion people worldwide will have a smartphone by 2020. Of course, having a phone in your pocket today is the equivalent of having a supercomputer on your person at all times. Evans said that the iPhone 6 has 625 times more transistors than a 1995 Pentium processor.
Here are seven key takeaways from Evans’ presentation that brands need to be aware of as mobile pushes technology forward:
1. Mobile is not a subset of the Internet; it has become the Internet. Mobile is the main way people access the Internet – to say “mobile Internet” in 2016 is like saying “color TV.” It has become the default device no matter where users are when they use it. According to one recent study in the U.K., a mere one percent of people said the only time they use their mobile device to go on the Internet is when they are not home. Fifty-four percent of Facebook’s 1.7 billion monthly active users only access the platform on their phones, and 40-50 percent of all smartphone traffic travels over wifi.
2. The smartphone is a more sophisticated Internet platform than the PC. Simply put, it can do more, because it’s personal, can detect location, contains payment information, can take pictures, and more.
3. Mobile is an ecosystem, not a screen size. Mobile has many fundamental differences as compared with computers, including its secure, sandboxed software model, touch-based interfaces, and its two major operating systems – iOS and Android. It actually has become the new Lego for tech, as the essential building block that has spawned many other interconnected components, including tablets, drones, connected cars and homes, wearables and virtual reality (VR).
4. Mobile has broken the model for how we find things. The Web-based model for finding things – i.e. initially using services like Yahoo! and later Google – has been largely broken by mobile, since it is primarily an app-based ecosystem that doesn’t rely on the mobile Web. This is leading to new ways to find things, though the riddle of how to do this over the long-term is largely unsolved. Right now, content distribution relies on a number of major gatekeepers – each with different content and distribution models -- from WeChat in China to Snapchat, Facebook to YouTube, WhatsApp to Instagram. In fact, in one recent study of Buzzfeed’s traffic, only 23 percent of its traffic came to it directly. Facebook accounted for the most traffic at 37 percent, and Snapchat accounted for another 21 percent. Going forward, the future of discovery may rely on a combination of services such as Siri and Google Now, messaging apps, bots and maps.
5. Because of mobile, what happened to media will happen to retail. While e-commerce is becoming more and more of a factor across more market segments, it still has only just begun -- only 12 percent of retail sales in the U.S. currently occur online. However, mobile will present challenges and opportunities for marketers as retail echoes the pattern of media – with established aggregators breaking up, giving rise to new aggregators that will shape consumption in different ways. Products like the Amazon Dash, which allows users to re-order a particular product simply by pressing a button, indicate that the channel is the product.
6. Virtual Reality will require a new kind of storytelling. Evans kicked off his discussion of VR with the following anonymous quote: “You can divide the world into people who think VR is part of the future, and people who haven’t had the demo.” He continued that even as VR still requires a few key components to make it better, faster and cheaper, it is demonstrating that it will require a new kind of storytelling. VR technology, which is already making its way into high-end smartphones, will push creators to figure out how to tell a story to viewers who can look behind them, and also begs the question: “Is this for ‘games’ people or ‘movie’ people? Or both?” Either way, VR will be compelling, and it is certainly not just 3D.
7. Prepare for a world that will move from being mobile-first to AI-first. While the world adjusts to a mobile-first world, the next big shift will be toward artificial intelligence, but like your smartphone, it will also be portable. Among the reasons why is, simply, that a combination of power, data, algorithms and investment has made it start to work. AI for things such as image identification and speech recognition is beginning to approximate the accuracy of humans and its AI that is “lighting up” things like driverless cars and drones.
Here is Benedict Evans’ full presentation.
Stay tuned for news about 2017’s CEO & CMO Summit, here.