Monday, December 24, 2012

The Android Vs iOS Engagement Conundrum

My first thought.Even though Android has 75% of the WW market share and iOS is a mere niche player with 15%, iOS has been around longer (3 years more than Android) and as such, has built a more holistic ecosystem. The ecosystem I am talking about is not just the app store and the experience of iOS, it's also the users/consumers who have grown and evolved along with the evolution of Apple. These people are more internet savvy and know how to get the most out of the modern-day mobile experience which includes shopping, making reservations, using location services, etc, etc. OK so that takes care of the early adopters of iPhone who have, as I said, evolved along with the iPhone's evolution.

Horace Dediu, Asymco

My second one.
What about the newer users; the ones who have jumped on the iPhone band wagon from iPhone 4S and on-wards? We can apportion some of the reason to demographics. That is, iPhone/iPad buyers must be, demographically, different from Android buyers. They may be more affluent? They may have more college degrees? They may be single? I don't have the exact details to slice-n-dice the data, but this should affect the engagement level also. If they are indeed more affluent, then it makes sense that they spend more on online shopping than Android users do. To find out exactly how much of the gap (23% Vs. 77% of US Mobile Thanksgiving shopping in 2012) can be apportioned to the demographics factor, we would need exact demographics of iPhone/iPad buyers. We will need to assign weights to these key demographics then quantify the results and reconcile it with the gap.

The third and final thought...

...I have is that, the mobile experience is more leisurely with a bigger screen. Online shopping is more fun (for me at least) on a bigger screen because its easier to see the product, compare it and generally enjoy the experience. To enjoy this experience on a bigger mobile screen means to do it on a tablet. Again iPads have been around for longer and while Android is killing Apple on the smartphone side, it is not so on the tablet side. Android smartphones have, arguably, caught up to iOS performance in the last 6 months (with Jellybean), but its a different story on the tablet front. The recently unveiled nexus 7 & 10 have a chance to live up to the expectations but its too soon since these tablets have just gone on sale. Android needs to build a critical mass on the tablet side via a better tablet performance / experience to overcome the size factor in the engagement gap. So, effectively, at the moment Android is missing a whole device category as compared to Apple.

In Conclusion...

My gut feeling is that Android will come close to iOS on engagement but we need to give Big-G some time.  Will it surpass iOS on engagement?  I don't know; I feel doubtful.  The reason is that the iPhone and iPad are premium products and typically bought by more affluent customers.  While Android is the mobile OS that powers high-end smartphones, it also powers very low-end smartphones.  This waters-down the premium effect for Android customer-base.  

Its time for Android to improve on the experience through software and ecosystem/apps and time to build a critical mass on the bigger screen devices. So to summarize, its 'evolved iOS users,' 'demographics,' and 'critical mass on bigger screen' to shed some light on the engagement conundrum.

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Sunday, December 23, 2012

Mary Meeker "Internet Trends" Presentation @ Stanford - KPCB Dec 2012

Disclaimer: All slides are from Mary Meeker's 'Internet Trends @ Stanford - Bases Kickoff 12/3/2012' presentation which is the property of Kleiner Perkins Caufield Byers, a VC firm. All comments, opinions and forward-looking statements in RED are my own and original commentary.

US by far the most penetrated market in terms of Internet Users.

Japan and S. Korea lead the way in terms of Smartphone penetration (as a % of total subscribers). This is, however, thanks to their respective low population base. Will be interesting to see how China and India play out with their large markets but low incomes. Which Smartphone platform will become the incumbent in these countries?

Great stats for Android. Will be very interesting to see how Android starts putting the $$$s in Google's war chest, especially since Google doesn't charge for the Android license. Google uses a very different revenue model for its Smartphone platform than what Apple uses. The ad ecosystem, which Google pioneered on the Desktop Internet, is at a very nascent stage on the Mobile Internet. CPMs and CTRs are low on Mobile Vs Desktop. But then again, its great to be the dominant Mobile Platform and then workout the monetization issue.

Speaks for itself...impressive indeed!

...And future growth prospects look great too.

The dynamics are so different in each country. In the US, Mobile traffic is 13% of total Internet traffic, while Smartphone penetration is close to 50%. In India, Smartphone penetration (as a % of total mobile subscriptions) is only 4%, yet they manage to overtake Desktop Internet traffic with Mobile Internet Traffic. Can you imagine what will happen if you give every Indian a Smartphone??!! Mobile Internet traffic will skyrocket, just like how total mobile subscriptions overtook landlines. Apple, are you guys seeing this??? Don't get hung-up on your high quality, high margin products. This is a platform race. Get into India and China. Don't let history repeat itself from the 90's when Microsoft won the platform race against your high quality, high margin Macs.

This 'App Ecosystem' has made individual college geeks rich while they sit in their parents' or grandparents' house!

Even though, Android is around 65% market share of the Smartphone market in the US, the iPhone is way ahead in terms of shopping traffic. Very interesting phenomenon about the demographics of iPhone and Android users.

Another interesting gap. But all these gaps translate into opportunities...if you play your cards right!

Thats in 6 months folks! We are in the middle of a major disruption. Mobile devices are replacing PCs at home. When will they replace the PC at work? That is going to be a tougher challenge.

And its from this Big Data that algorithms will run better and more accurate. Big Data will also fuel Voice Recognition and AI.

I like this 'Asset-Light' lifestyle - its synonymous with 'minimalism.'

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