Internet Growth Slows - The Real Driver is Mobile Usage - Says Mary Meeker

Thought leader and Kleiner Perkins Caufield & Byers (KPCB) partner Mary Meeker presented Wednesday her annual take on the Internet industry and upcoming trends at Code Conference, hosted by Re/Code.

One of the most interesting movements Meeker notes is that Internet adoption is slowing down around the world.

While this may not necessarily be a brand new idea, the pace is surprising – adoption of the Web is now growing at a rate of less than 10 percent.

Smartphone growth is also being snuffed. With growth at around 20 percent and falling, the engines of adoption are now in the developing world, according to the report.

View all Mary Meeker Internet industry and upcoming trends slides (below):

Among the more startling statistics she revealed was that more than 1.8 billion photos are shared every day and the dating app Tinder, which allows conversation only after both people have “liked” each other, now registers 800 million swipes per day and 11 million matches.

Meeker delivered her observations and predictions at the Code conference in California. Her seminar is hugely influential in the technology industry, as well as for media buyers, strategists and the markets.

She describes the biggest “re-imagination” of the net as a trend toward mobile devices with sensors that enable users to share a huge and diverse range of information.

Companies can use this “big data” to solve big problems. Meeker points to innovations in sleep patterns, fuel efficiency, speech recognition software and media personalization, arising from millions of data points collected on mobile devices.

The new Samsung Galaxy S5, for example, features 10 separate sensors including barometer, fingerprints, accelerometer and heart rate monitor.

But she warns that the mining of so much big data also raises questions about rights, particularly individual privacy. Malicious attacks targeted at mobile platforms are likely to intensify, amid a general rise in active threats and nation-state activities.

Among Mary Meeker’s other key observations:

• Data mining: We’re only meaningfully analysing a tiny fraction (1 per cent) of available data. Tech start-ups are leading the way in both expanding and understanding data.

• Single-purpose apps: Applications are moving away from being catch-all toward stand-alone, such as Facebook’s Messenger and Twitter’s Vine.

• Selectivity: We are sharing more content with a narrower group of people, rather than broadcasting a little bit of information to all. Think Snapchat, which now accounts for 700 million daily photo shares.

• China: Meeker lauds China as a leader in mobile commerce development. Through its messenger application WeChat, which has 400 million active mobile users, you can bank and invest, book restaurants and buy groceries. Didi Taxis generates 5 million daily rides by integration with WeChat.

• Cryptocurrencies: Meeker keeps faith in Bitcoin despite its crash in value, arguing the 5 million Bitcoin wallets worldwide (an eight-fold increase year-on-year) shows “extraordinary interest”.

• Declining costs: Computing, storage, bandwidth and handsets are all decreasing, though data costs can remain high. The average global smartphone price is now $363.

• Mobile growth: Mobile usage now accounts for 25 per cent of all web traffic in 2014, up from 14 per cent a year ago. Asia and Africa represent a significant portion of that – developing nations “leap-frogged” the PC and laptop era, moving straight to smartphones.

• Videos: Mobile’s share of online video plays is rising, and now accounts for 22 per cent. Consumers expect to watch TV on demand and on their own terms.

• Tablets: Unit shipments are growing faster than desktops or laptops ever did, but still have more room to grow at 6 per cent market penetration.

• Dual-screening: 84 per cent of American mobile users use their device while watching TV. We are seeing more content than ever, but it allows us to avoid commercials.

• Advertising: Global internet advertising grew 16 per cent this year, and mobile advertising grew by 47 per cent. The average revenue per user for Google, Facebook and Twitter remained stable.

Download Mary Meeker’s Internet Trends 164 (PDF) Slide Deck