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#thinkMobile

2. The Future Of Mobile
Henry Blodget
CEO/Editor, Business Insider

3. Digital is changing…

4. Now twice as many mobile devices sold as PCs
Global Internet Connected Device Shipments
1,200,000,000
1,000,000,000
Tablets
800,000,000
Units
600,000,000
Smartphones
400,000,000
200,000,000
Personal Computers
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Gartner, IDC, Strategy Analy cs, company filings, BI Intelligence es mates

5. PC sales, meanwhile, flat to down
Global PC Shipments By Manufacturer
100,000
Windows 8 released
iPad released
90,000
80,000
70,000
Other
60,000
50,000
Apple
40,000 Acer
30,000 Dell
20,000 Lenovo
10,000 HP
0
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Source: Gartner, IDC

6. Tablets alone will overtake PCs in 2-3 years
Tablet Shipments Forecast
450
400
350
300
(millions)
250
200
150
100
50
0
2010 2011 2012 2013E 2014E 2015E 2016E

7. So the future is mobile
G-20 Internet Access
3,000
2,500
2,000
Consumer
Mobile
Broadband
1,500
Connec ons
(milions)
1,000
Mobile
500
Fixed Fixed
Fixed
0
2005 2010 2015
Source: Boston Consul ng Group, Mary Meeker, Kleiner Perkins, Morgan Stanley Research, Berg Insight

8. Where are we in the
smartphone revolution?

9. Still lots of “dumbphones” to replace
Global Smartphone vs. Mobile Phone Users, 2012E
7,000 6B
Mobile
Phone Users
6,000
5,000
Global Users (millions)
4,000
3,000
2,000 1B
Smartphone
Users
1,000
0
Smartphone Mobile Phone
Source: Strategy Analy cs, Interna onal Telecommunica ons Union
Note: Some users own more than one device

10. Smartphones 44% of mobile sales last quarter
Global Mobile Phone Sales
500,000
450,000
400,000
350,000
300,000
(thousands)
250,000
200,000 Feature Phones
150,000
100,000
50,000 Smartphones
-
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Source: Gartner

11. But!

12. Growth slows after hitting 50% penetration

13. Major markets are past halfway point
American and European Smartphone Penetra on
70%
66%
64%
Percentage of mobile popula on owning a smartphone
60%
54% 53% 53%
51% 51% 51%
50%
44%
42%
40%
40% 38% 37%
34% 35%
30% 27%
26% 25%
20%
10%
0%
Spain UK U.S. Italy France Germany
Source: comScore Dec. 2010 Dec. 2011 Dec. 2012

14. Underpenetrated segments are older…
Smartphone Penetra on By Age
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ages 16-24 Ages 25-34 Ages 35-44 Ages 45-64
South Korea China Australia United Kingdom United States Italy Russia Brazil Turkey India
Source: Nielsen, Feburary 2013

15. …and poorer.
Smartphone Penetra on By Age And Income (U.S.)
90%
81%
80% 76%
74%
72%
70% 67%
60% 61%
59% 58%
60%
51%
50% 47% 46%
42%
40%
34%
31%
30% 25%
22%
20% 16%
10%
0%
Ages 18 - 24 Ages 25 - 34 Ages 35 - 44 Ages 45 - 54 Ages 55 - 64 Ages 65+
< 50k 50k - 100k 100k+
Source: Nielsen Mobile Insights, Q1 2012

16. We’re starting to see the slowdown in U.S.
U.S. Smartphone Market: Year-Over-Year Net Adds
40
35
30
25
Users
Added 20
(millions)
15
10
5
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012
Source: comScore, Nielsen

17. The big opportunity is now in emerging markets
BRICs: Mobile and Smartphone Penetra on
1,400 1,344
1,241
1,200
1,090
1,000
1,090
800
(Millions)
600
400
259
222 228
197
200 142
48 33 14
0
China India Russia Brazil
Popula on Mobile Phone Subscrip ons Ac ve Smartphones (Year-End 2012e)
Sources: Carriers, governments, Flurry, TomiAhonen Consul ng, Umeng, Cybermedia Research, BII Es mates

18. And they’re growing rapidly
Brazil, China, India Take An Increasing Share Of Global Smartphone
Shipments
1800
1600
1400
Millions
1200
1000
800
600
Rest Of World
UK
400
India
United States
200
China
Brazil
0
2011 2012E 2016E
Sources: IDC, BI Intelligence

19. China is now the world’s largest smartphone market
Global Smartphone Shipments
250,000
200,000
150,000
(thousands)
100,000
Rest Of The World
50,000
China
-
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Source: Gartner, IDC, Strategy Analy cs, Canalys, BII es mates

20. This shift to emerging
markets has hurt Apple.

21. iPhones are still very expensive
iPhone Average Selling Price
$700
$650
$600
$550
$500
$450
$400
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012

22. And folks in emerging markets don’t have much money
BRICs: Smartphone Penetra on As % Of Mobile Subscrip ons
25%
Penetra on As % Of Mobile Connec ons, Year-End 2012 Es mate
20%
20%
15% 14%
10%
5% 5%
5%
0%
China Russia India Brazil
Sources: Carriers, governments, Flurry, TomiAhonen Consul ng, Umeng, Cybermedia Research, BII Es mates

23. That’s why Apple needs a cheap iPhone

24. The tablet market is less
mature than smartphones

25. U.S. tablet penetration now ~25%
U.S Smartphone and Tablet Owners
140
120
100
80
(millions)
60
Smartphone Owners
40
20
Tablet Owners
0
May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12
Source: Pew Research Center, comScore, U.S. census bureau
Note: Includes smartphones owners over age of 13 and tablet owners over the age of 18

26. Current owners are affluent
U.S. Tablet Penetra on By Household Income
50%
47%
45%
40%
36%
% of U.S. adults that own...
35%
32%
30%
27%
25%
22%
20%
20%
16%
15%
10% 10%
10% 9%
8% 8%
5% 4% 4%
3% 3%
0%
Nov 10 Dec 11 Jan 12 Aug 12
Source: Pew <$30,000 $30,000-$49,000 $50,000-$74,999 $75,000+

27. And older
U.S. Tablet Penetra on By Age
35%
31%
30%
27% 27%
25%
% of U.S. adults that own...
25% 24%
20%
15%
15% 14%
13%
10%
10%
8%
7%
6% 6%
5%
5% 4%
2%
0%
Nov 10 Dec 11 Jan 12 Aug 12
Source: Pew 18-29 30-49 50-64 65+

28. But prices are falling fast…
iPad Average Selling Price
$700
$600
$500
$400
$300
$200
$100
$0
Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012

29. And, globally, tablet sales are just getting started
Global Tablet Shipments
60
50
40
(millions)
30
20
10 Rest of the world
0 China
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Source: Analysys Interna onal, iSuppli, IDC, BII es mates

30. What do people do
on mobile?

31. Mostly, they play games and social-network
Global iOS & Android Time Spent Per App Category
Other
11%
U li es
10%
Games
43%
Entertainment
10%
Social Networking
26%
Source: Flurry, November 2012

32. Tablets, especially, are gaming devices

33. Mobile users also listen to music
Pandora Mobile Usage
100%
77%
75%
% of Traffic from Mobile
50%
25%
5%
0%
2008 2009 2010 2011 2012
Source: Mary Meeker, Kleiner Perkins, companies, BII es mates

34. And consume content
Top Mobile Categories By Audience Growth, Oct. 2011 vs. Oct 2012 (U.S.)
40,000
35,000
30,000
Audience Size (thousands)
25,000
60%
20,000 51%
56%
46%
15,000
46%
47%
62% 48%
10,000 53%
50%
5,000
0
Books and Retail Payments Lifestyle Credit cards Men's Travel Service Beauty and Kids and Shopping
Magazines magazines fashion Family Guides
Source: comScore
Note: Includes both mobile web and app audience
Oct. 2011 Oct. 2012

35. Mobile is now 15% of global web traffic
Global Internet Traffic: Mobile vs. Desktop
100%
90%
Desktop
80%
70%
60%
50%
40%
30%
20% 15%
Mobile
10% 4%
1%
0%
Dec 08 Apr 09 Aug 09 Dec 09 Apr 10 Aug 10 Dec 10 Apr 11 Aug 11 Dec 11 Apr 12 Aug 12 Dec 12
Source: StatCounter

36. Mobile users watch video
U.S. Video Engagement, Monthly Minutes Per Ac ve User
472
425
378
324
276
231
152
110
93
63
Mar 2011 June 2011 Sept 2011 Dec 2011 Mar 2012
Google Internet Sites iOS & Android Photo & Video Apps
Source: Flurry Analy cs, comScore Video Matrix

37. ~8% of online video hours are now mobile
Mobile's Share Of Online Video
9%
Combined
Mobile
8%
7%
Share of all hours watched online
6%
5%
Smartphones
4%
Tablets
3%
2%
1%
0%
Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12
Source: Ooyala, 2012 Global Video Index

38. Mobile movie and TV viewing is growing
Time Watched By Video Length And Device
100%
90%
80%
Percent Of All Hours Watched
70%
60%
50%
40%
30%
20%
10%
0%
Desktop Smartphone Tablet Connected TV
Video Length
> 10 min 6 to 10 min 3 to 6 min 1 to 3 min < 1 min
Source: Ooyala, Q4 2012

39. Mobile users read news and books
Daily Tablet Reading Ac vi es By Age (U.S)
(Percent of tablets owners who use a tablet to...)
43%
38%
33% 32%
24%
17% 17%
16%
10%
6% 6%
2%
18-29 30-49 50-64 65+
Source: Pew Research Center News Books Magazines

40. They shop
U.S. E-Commerce Sales
$80,000
$70,000
$60,000
$50,000
($millions)
$40,000
$30,000
Total
E-Commerce Sales
$20,000
$10,000
Mobile
$0
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Source: comScore, Federal Reserve Economic Data--St. Louis Fed

41. Mobile now drives 20% of e-commerce traffic
Ecommerce Website Traffic By Device
100%
Tablet
90%
Smartphone
80%
70%
60%
50%
PC
40%
30%
20%
10%
0%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Source: Monetate

42. Some mobile commerce revenue is incremental
eBay Mobile Transac on Volume* Grew To 13% Of Total
100% 2%
4%
5%
90% 9%
80%
70%
60%
50%
93%
87%
40%
30%
20%
10%
0%
2011 2012E
Desktop Volume Mobile Volume Cannibalized From Desktop Incremental Mobile Volume
Sources: eBay, Morgan Stanley Research
*Volume is Gross Merchandise Value (GMV), or value of all merchandise transacted

43. They use smartphones and tablets to make
purchase decisions
U.S. Mobile Commerce Ac vi es
45%
Share of smartphone or tablet owners who have..
40% 39% 39%
38% 38%
35% 34%
33%
30%
30%
25% 24%
23%
22%
21% 21%
20% 19% 19%
15%
10%
5%
0%
Researched Compared Purchased goods Found store Found coupons Checked product Made shopping
product features product prices or services loca on or deals availability lists
online
Source: comScore, December 2012 Tablet Smartphone

44. People use mobile to pay for stuff…
PayPal Mobile Payments Processed
$16,000
$14,000
$12,000
$10,000
Total
Payment
$8,000
Volume
(millions)
$6,000
$4,000
$2,000
$0
2008 2009 2010 2011 2012

45. Mobile is now 10% of PayPal’s payments
PayPal Payments Processed
$150,000
Mobile
$120,000
$90,000
Total
Payment
Volume
(millions)
$60,000
$30,000
$0
2008 2009 2010 2011 2012

46. Square processes $25+ million a day
Square Es mated Daily Payment Volume and Revenues
$30,000
$25,000
$20,000
Payment Volume
(Thousands)
$15,000
$10,000
$5,000
Revenues
$0
3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12
Source: news reports, company releases

47. And some “native” mobile apps
are really exploding…

48. Angry Birds downloaded 1+ billion times
1,000,000
Angry Birds Downloads
900,000
800,000
700,000
Total Downloads (thousands)
600,000
500,000
400,000
300,000
200,000
100,000
0
Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12
Source: News reports, company releases

49. Instagram 100+ million active users
Instagram Es mated Users
100,000
90,000
80,000
70,000
60,000
Total
Users 50,000
(thousands)
40,000
30,000
20,000
10,000
0
3/2011 4/2011 5/2011 6/2011 7/2011 8/2011 9/2011 10/2011 11/2011 12/2011 1/2012 2/2012 3/2012 4/2012 5/2012 7/2012 7/2012 8/2012 9/2012
Source: news reports, company releases, BII Es mates

50. BOTTOM LINE:
The growth of mobile =
more usage, new apps

51. Each device has a different “prime time”
Share Of Device Page Traffic Over A Day:
Source: comScore, Telefonica, Macquarie Capital (USA), December 2011

52. Mobile has extended the digital day
1,600,000
Mobile Visits Desktop Visits
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Source: Google Analytcs, Business Insider

53. Usage is up across the board…
U.S. Mobile Content Usage
80%
Sent Text Message
70%
60%
% of mobile popula on that has...
Used Downloaded Apps
50%
Used Browser
Accessed Social Network
40% Or Blog
Played games
30%
Listened to music
20%
10%
0%
Feb Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov
10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12 12 12 12 12 12
Source: comScore

54. Smartphone owners consume a huge
amount of content
Smartphone Content Consump on
80%
Percent of smartphone owners who have recently accessed...
70%
60%
50%
40%
30%
20%
10%
0%
Social Networking News Apps Streaming Online Music Video / Mobile TV
South Korea China Australia United Kingdom United States Italy Russia Brazil Turkey India
Source: Nielsen, Feburary 2013

55. Mobile consumption share is growing
U.S. Consumer Media Consump on Share
50%
45%
44%
45% 43%
42%
40%
35%
30%
26%26%26%
25%
25%
20%
17%
16%
15%
14%
Tripled since 2009
15%
12%
9% 9%
10% 8% 8%
7% 7% 7%
6% 6%
5%
4%
5%
0%
TV Online Radio Mobile Print Other
Source: eMarketer, October 2012 2009 2010 2011 2012

56. So mobile advertising
will be huge, right?

57. Hmm…

58. Yes, there’s a gap between time and ad spend
2011 U.S. Ad Spending vs. Consumer Time Spent By Media
42% 43%
25% 26%
22%
9% gap
15%
11% 10%
7%
1%
TV Print Web Radio Mobile
Ad Spend Per Media Time Spent Per Media
Source: Mary Meeker (KPCB), eMarketer, IAB

59. But there are reasons for
that gap …

60. The screen is really small.

61. The mobile ad ecosystem is complex…

62. And bad mobile ads are…
INTRUSIVE

63. So mobile monetization still lags the desktop
Effec ve CPM, Desktop vs. Mobile
$3.50
$0.75
Desktop Internet Mobile Internet
Source: comScore, Vivaki, Mobclix Exchange

64. Overall, mobile is still a tiny fraction of
digital ad spending
U.S. Digital Adver sing Revenues
$40
Mobile
$35
$30
$25
(billions)
$20
$15
$10
$5
$0
2007 2008 2009 2010 2011 2012E
Source: IAB, BIA-Kelsey, BII es mates

65. And a blip in the larger picture
U.S. Adver sing
$180
$160
$140
$120
(billions)
$100
$80 Offline
$60
$40
All Other Online
$20
Mobile
$0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E
Source: IAB, U.S. Census Bureau, Stategy Analy cs. BI Intelligence es mates

66. It’s also growing more slower than TV
and the Internet in the first 5 years
Compara ve U.S. Adver sing Media
Annual $ Revenue Growth (First 5 Years)
$5,000
$4,621
$4,500
$4,000
$3,698
$3,500
$3,000
$2,500
$2,162 $2,162
$1,920
$2,000
$1,500
$1,171
$1,012
$907
$1,000 $806
$500 $358 $392
$267
$80 $160
$55
$0
Year 1 Year 2 Year 3 Year 4 Year 5
Broadcast TV Mobile Internet
Source: IAB, McCann-Erickson, BIA-Kelsey, BII es mates Note: Adjusted for infla on

67. But!

68. “Native” mobile ads are finally appearing
• Ads in timelines
• Sponsored content
• Geo-located ads
• Shareable ads
• Activity-linked ads (e.g., ads
in natural pauses during
mobile game use)

69. Tablet screens
are bigger!

70. Most “mobile” ads are still web search and
display ads viewed on mobile
Es mated 2012 Mobile Ad Spend By Format
Messaging
9%
Search
49%
Display
42%
Source: eMarketer, September 2012

71. Google completely owns mobile search
Global Mobile Search Market Share
100%
Google
90%
80%
70%
60%
50%
40%
30%
20%
10% bing
Yahoo!
0%
Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12
Source: Global StatCounter

72. Facebook has a nice chunk of mobile display
Facebook Controls Almost One-Fi h Of U.S. Mobile Ad Display Revenues
100%
90%
Other
Percent Of Na ve Mobile Ad Display Market Controlled By ....
80%
70%
Apple (iAd)
60%
Millennial Media
Twi er
50%
Pandora
40%
30% Google
20%
Facebook
10%
0%
2011 2012 2013 2014
Source: eMarketer

73. APPS

74. Almost 1 million available apps
Available Apps, iOS vs. Android (thousands)
800
700
650
600
500
425
400
350
250 250
200
160
80
28 20
2
Mar 09 Dec 09 Aug 10 May 11 Jul 11 Oct 11 Jun 12 Jan 13
Android iOS
Source: Apple, Google, Flurry, news reports

75. App downloads should hit 55 billion this year
Apple App Store Downloads
60,000,000,000
55,000,000,000
50,000,000,000
45,000,000,000
40,000,000,000
35,000,000,000
30,000,000,000
25,000,000,000
20,000,000,000
15,000,000,000
10,000,000,000
5,000,000,000
0
1/1/11
2/1/11
3/1/11
4/1/11
5/1/11
6/1/11
7/1/11
8/1/11
9/1/11
10/1/11
11/1/11
12/1/11
1/1/12
2/1/12
3/1/12
4/1/12
5/1/12
6/1/12
7/1/12
8/1/12
9/1/12
1/1/13
2/1/13
3/1/13
4/1/13
5/1/13
6/1/13
10/1/12
11/1/12
12/1/12

76. People spend more time on apps than mobile web
Total Mobile App And Web Dura on On Android And iOS
160
140
120
Minutes Spent Per Month (Biillions )
100
80
60 Apps
40
20
Mobile Web
0
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12
Source: Nielsen Smartphone Analy cs

77. App revenue growing fast, but still not huge
Es mated App Store Revenues
$6,000
$5,000
$4,000
(millions)
$3,000
$2,000
$1,000
$0
2008 2009 2010 2011 2012
Source: news reports, company releases
Includes app revenues on all major mobile platforms

78. Most app downloads are free
Mobile App Store Downloads, Free vs. Paid: 2011
Total Downloads
Free Downloads
89%
Source: Garner, September 2012

79. “Freemium” is the dominant model

80. Games are the biggest money makers

81. Mobile is a “platform market”

82. “Platform markets” standardize
around one or two platforms

83. In mobile, it’s a two-horse race race
Global Mobile Pla orm Market Share
100%
90%
Other
80%
70%
60%
50% Windows
40% Blackberry Apple
30%
20%
Android
10%
0%
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Source: Gartner, IDC, Strategy Analy cs, BI Intelligence es mates, and company filings

84. Android is winning in smartphones
Global Smartphone Market Share By Pla orm
100%
90%
80% Symbian
70%
60%
Other
Share of 50%
Global Unit Microso
Sales
40% Blackberry
Apple
30%
Android
20%
10%
0%
Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Source: Gartner

85. Especially in China
Chinese Smartphone Market Share By Pla orm
100%
Other
90%
80% Symbian
70% Apple
60%
50%
40% Android
30%
20%
10%
0%
Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
Source: Analysys Interna onal

86. It’s the same story in tablets
Tablet Market Share By Pla orm Windows
100% Blackberry
Nook
90% Kindle
Fire
80% Android
70%
60%
50%
40% iPad
30%
20%
10%
0%
Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Source: Es mates based on informa on from IDC, Strategy Analy cs, and company filings

87. Android is now the biggest platform of all!
Global Compu ng Pla orm Market Share
100%
90%
Other
80%
Blackberry
70%
Apple
60%
50%
Windows
40%
30%
20%
Android
10%
0%
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Source: Gartner, IDC, Strategy Analy cs, BI Intelligence es mates, and company filings

88. Despite this, Apple dominates app revenue
App Store Es mated Revenues By Pla orm
$6,000
Other
$5,000
Android
$4,000
(millions)
$3,000
$2,000
Apple
App Store
$1,000
$0
2008 2009 2010 2011 2012
Source: iSuppli, Forrester Research, company releases, BII es mates

89. Apple also sends most m-commerce traffic
Ecommerce Website Traffic By Mobile Pla orm
100% Other
Android Tablet
90%
Android
80%
70%
60%
iPhone
50%
40%
30%
iPad
20%
10%
0%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Source: Monetate

90. And developers strongly prefer Apple
New Project Starts, iOS vs. Android
20
18
16 31%
14 27%
25%
12
Total New
Project Starts 10
(thousands) 27%
8 37%
69%
6 75% 73%
4 73%
63%
2
0
1Q11 2Q11 3Q11 4Q11 1Q12
iOS Android
Source: Flurry Analy cs, January 2011-March 2012

91. Why?

92. 1. Android has a fragmentation problem
Android Pla orm Distribu on, January 2013
Jelly Bean Eclair
10% Donut
2%
0% Froyo
9%
Ice Cream Sandwich
29%
Gingerbread
48%
Honeycomb
2%
Source: developer.android.com

93. 2. iOS is where the money is
Cross-Pla orm Revenues: iOS vs. Android
iOS
Android
24%
Source: Flurry Analy cs, June 2012

94. 3. And Apple has wealthier users
Annual Household Income Share By Pla orm
100%
90%
24%
80% 41%
70%
60%
37%
50%
40% 36%
30%
20% 39%
23%
10%
0%
Android iOS
Source: comScore, February 2013 <$50k $50-$100k $100k+

95. Developers’ interest in Android has waned
Developer Interest In Pla orms
100%
iPhone
90%
iPad
80%
Android Phone
70%
Android Tablet
HTML5
60%
50%
40% Windows 8 Tablets
Windows
30% Phone
20%
Kindle Fire
10%
Blackberry
0%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Source: Appcelerator

96. For manufacturers, mobile has
meant a windfall for a select few

97. Namely, Apple and Samsung
Opera ng Profit Share By Vendor
80%
Apple
70%
Nokia
60%
50%
40%
Samsung
30%
20%
Sony Ericcson
10%
RIM
LG HTC
0%
Motorola
-10%
-20%
2007 2008 2009 2010 2011 2012
Source: Company releases, Canaccord Genuity es mates

98. But Chinese manufacturers are starting to take off
Smartphone Shipments By Chinese Manufacturers
30,000,000
27,000,000
24,000,000
21,000,000
18,000,000
Units Shipped
15,000,000
Lenovo
12,000,000
9,000,000 ZTE
6,000,000
3,000,000
Huawei
-
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Source: Gartner, Strategy Analy cs, Company Es mates, IDC, TomiAhonen Consul ng, Canaccord Genuity, Business Insider Intelligence Es mates

99. Last question…

100. Should you be “mobile only?”

101. No.

102. People like big screens

103. You should be “multi-screen.”

104. Digital is now a 4-screen world…

105. Maybe 5 or 6 screens soon…

106. So you should be everywhere!

107. Thank you very much.

108. Henry Blodget
Founder, CEO & Editor-in-Chief, Business Insider
Marcelo Ballvé, Editorial Director
Alex Cocotas, Analyst
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