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The past few years have seen explosive growth in internet and smartphone usage, driven by plummeting costs in connectivity and manufacturing. But as of now, anyone looking to exploit those sectors is going to have a much tougher time.
That’s the standout message from Kleiner Perkins Caufield Byers (KPCB) partner Mary Meeker’s annual trends report. Often referred to as the “Queen of the Internet”, Meeker’s report is something that everyone in the industry sits up and pays attention to.
As well as trends in internet and smartphone usage, the report illustrates the challenges developed tech markets will have going forward, the explosive growth of China, as well as Google and Facebook’s dominance of online advertising.
We’ve outlined some of the key takeaways from the report.
Internet growth is flat
In 2015, the number of global internet users went past the 3-billion mark for the first time, but that rate at which new users are coming online has slowed dramatically. Despite the best efforts of Google, Facebook, and any number of country-specific organisations, user growth slowed to just nine percent.
The one notable exception to this stagnation is India, which saw 40% year-on-year user growth. As a consequence, the country passed the USA to become the world’s second biggest internet user market after China.
The smartphone is about to plateau
According to Meeker’s report, growth in both the number of people using smartphones and smartphone shipments fell dramatically in 2015.
There are currently just over 2.5-billion smartphone users in the world, but the total number only increased 23% in 2015 — down from 35% the year before.
One possible reason for this slowdown is that much of the growth since 2008 has come from the Asia-Pacific region, which is now reaching maturity.
Interestingly, that slowdown in user growth is matched by a slowdown in device shipments. From a peak of 70-plus percent growth in 2010, shipments grew just 10% in 2015.
One reason for that may be that while the average cost of smartphones has fallen dramatically, it’s still too high a proportion of people’s incomes in many countries:
It’s also clear that while Android has become the dominant OS, it’s not as good at making money as iOS:
Google and Facebook rule online advertising
That said, Google’s dominance of online advertising means that it can afford to take the odd hit on Android. Together with Facebook, it accounts for the vast bulk of online ad growth in the US.
The two companies are also probably the ones best poised to take advantage of the massive potential of the mobile advertising market:
Rise of the ad-blockers
But that opportunity comes against the background of exponential growth in the ad-blocking space.
According to Meeker, if advertisers are going to combat the rise of ad-blockers, they’re going to have to create content that people actually want to see. And, it seems, brands on Snapchat are leading the way on this front:
Memeburn will write on further insights from the report in the coming hours, but if you’re interested in reading the whole thing, you can find it below: