Andreessen Horowitz’s Benedict Evans presentation Mobile is Eating the World given at the firm’s recent Tech Summit 2014 held October 27th and 28th in Sausalito, California provides excellent insights into how mobile is reordering the tech industry and the Internet.
He explains in detail how the mobile leverage effect is redefining the growth dynamics of startups. The typical startup in 2000 raised $10M, had 100 staff and eventually gained 1M users. Today, Andreessen Horowitz is seeing startups raise $1M with 10 staff and gain 10M users. He points out that each wave of technology creates new businesses with mobile being the foundation of disruptive change in travel (AirBnB) and transport (Uber/Lyft). He also is seeing how every sensor on a smartphone can be the catalyst of an entirely new business.
The presentation slides for Mobile is Eating the World are on SlideShare, and you can listen to his presentation on Vimeo here. His original blog post on the Andreessen Horowitz blog titled How Mobile is Enabling Tech to Outgrow the Tech Industry can be found here.
Here are the key take-aways from Benedict Evan’s speech:
- The smartphone and tablet business is now nearly 50% of the global consumer electronics industry. Benedict Evans provided a comparative analysis of quarterly unit shipments of PCs versus iOS and Android devices which is shown in the graphic below:
- Smartphones will continue to be the online on-ramp of choice regardless of global region. As of 2014, there are 3B people online and 2B people using smartphones. Andreessen Horowitz’s Benedict Evans predicts that by 2020 there will be 4B people online, all using smartphones. Global smartphone adoption will attain a global compound annual growth rate of 10.41% in the next seven years. By 2020, 80% of the adults on earth will own a smartphone.
- Every smartphone sensor creates a new business. Sensors in smartphones are accelerating the next generation of analytics, applications, APIs, and fundamentally changing the smartphone user experience. Andreessen Horowitz’s Benedict Evans predicts that there will be 2 – 3X more smartphones than PCs by 2020, and when they are multiplied by their many uses including sensor-based applications, the total opportunity grows 10 times in this time period. All of these factors are leading to a mobile leverage effect that reduces the costs of develop new mobile applications that have the potential to attract exponentially larger customer bases.
- The new iPhone CPU has 625 times more transistors than Intel’s Pentium processor produced in 1995. During the iPhone launch weekend earlier this year, Apple sold 25X more CPU transistors than were in all the PCs on Earth in 1995.
- The utility of mobile increases as income falls. 70% of Sub-Saharan Africa is under cellular coverage, with 20% having 3G coverage today increasing to 65% by 2019, attaining a CAGR of 21.71%. The most significant constraint to greater adoption is data pricing and the ability to charge a phone. Using this region’s cellular adoption rates and economics as an example, Benedict Evans shows how the rapid cost reductions in smartphone costs are fundamentally changing the Internet.
- Mobile apps now dominate the proportion of time spent online. The time spent on mobile apps is greater than all the time spent on the Web in the U.S. today. The following graphic from Benedict Evans’ presentation illustrates this point: