The best Meeker 2016 Internet Trends slides and what they mean

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The best Meeker 2016 Internet Trends slides and what they mean

This is the gospel according to Mary Meeker, a living legend amongst venture capitalists. Instead of just blindly clicking through her 200+ page 2016 Internet Trends report, here we’ve picked the most important graphs and stats, and explained what they actually mean for people who work in tech. You can also read the full report here.

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Internet penetration growth was flat at 9 percent year-over-year led by India, which means there are plenty of new users for apps to attract, especially in developing markets.

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Global smartphone shipments slowed dramatically, from +28 percent to +10 percent YoY, as phones are now good enough and not improving fast enough for everyone to need a new one each year.

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Android is gaining market share on iOS, but the average Android selling price is rapidly declining, meaning Android is becoming a more attractive platform to developers but a less lucrative market for phone makers.

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The biggest barriers to internet adoption right now are network infrastructure and incentives to get online. Only the most remote areas are blocked by illiteracy and low incomes.

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In developing nations, people spend a big percentage of their income on buying smartphones, meaning their relatively fixed price is harder on countries with less buying power.

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Which countries drive global GDP growth has changed from North America, Europe and Japan to China and emerging Asia. Tech companies need those Asian markets to get massive more than they need Europe and the U.S.

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The biggest drivers of growth are slowing down, meaning future economic growth will be tougher, but this creates increasing risks that benefit innovative, efficient companies centered around the internet.

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Mobile is fueling U.S. online advertising acceleration, with Facebook growing much faster (59 percent) compared to Google (18 percent) and others (13 percent) from 2014 to 2015. Ad platforms without vast data collection opportunities to power targeting are in trouble.

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Advertisers still spend way too much on print, radio and TV, and not enough on the web — and especially mobile. Businesses that nail mobile ads now could get a big headstart before everyone else shifts spend there.

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Ad blocking is up 94 percent YoY on mobile led by China and India, as video ads done wrong lead people to mute, hate the brand or use ad blockers. Advertisers risk growing backlash if they don’t get more entertaining and less invasive.

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“Millennials” aren’t just an age group, they have a unique set of values, including a bigger focus on work/life balance, self-development and community contribution, and their buying power will grow drastically as they hit mid-adulthood.

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In commerce, the emerging Generation Z cares about experience, ease, personalization and aligned values compared to the millennial focus on price and comprehensiveness.

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Commerce is changing as online distribution allows generic products to become full-fledged single-product brands, online brands create their own physical stores, big box retailers embrace the ease of mobile shopping and merchants aggressively optimize product lines using feedback data.

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Hyper-targeted native ads built for specific social networks let retailers dump ad spend on demographics they know will be lucrative instead of spraying ads at everyone.

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The rise of video and image sharing is driving more usage to visual apps like Facebook, Snapchat and Instagram, instead of text-heavy apps like LinkedIn and Twitter.

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Apps must build for Gen Z’s image-focused creators, not just millennial curators who think in text.

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Video is evolving to combine the control of video-on-demand, the intimacy of direct communication and the mass audience and urgency of live broadcast.

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With around 10 billion short video views per day each, video creators must make content natively designed for Facebook and Snapchat.

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Snapchat is winning because it combines personal communication, user-generated broadcasting and professional content in one app.

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Sponsored content creation tools like Snapchat Lenses drive huge engagement and thwart ad blockers/fatigue by attaching marketing to your friends’ faces.

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Live videos with replays deliver off-the-cuff, relatable content creation with an unprecedented audience. Viral hits are more viral than ever.

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Sports viewership is poised for a comprehensive app that combines social chatter, professional analysis and the actual game stream.

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People are still sharing more and more photos, with a big increase on Snapchat this year. Users are both shopping and selling their stuff through images, unlocking new ways for apps to monetize.

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Facebook owns the two top messaging apps, while Google is out of the race. Smaller messaging startups are unlikely to defeat the network effect of the giants, meaning their best bet might be to sell themselves soon.

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SMS is getting left behind because it can’t support rich media self-expression, and Snapchat’s advanced tools like animated Lenses are letting it carve out a niche beyond utilitarian communication.

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American messaging apps copied games, payments, QR codes, shopping, video chat and other services from the Asian messaging apps.

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Conversational interfaces are absorbing commerce and customer service because the single, asynchronous, personalized message thread is more convenient than phone calls, emails and the lack of attentive support on websites.

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People spend most of their time in a few apps, particularly messaging apps that are becoming the new home screens and portals. Developers are fighting for premier integrations instead of only promoting their own apps.

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Voice is the next big interface as voice recognition accuracy and latency are finally at acceptable levels, and mobile makes voice commands easier than typing.

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1 in 5 searches on Android are now voice, and they’re typically used for addresses, people to call, general and local information and personal assistance.

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The Internet of Things and smart cars that lack keyboards are pushing developers to adopt voice interfaces.

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Five percent of U.S. Amazon customers own a voice-based Echo and its mindshare is increasing, while keyboard-based iPhone shipments decreased.

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U.S. innovation by Tesla and Google could make the U.S. the home of the auto industry again.

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Google wants to leap-frog straight to fully self-driving cars, which could take awhile, Tesla wants to iterate its way there despite the risks of semi-autonomy and traditional car makers are combining the approaches while making strategic investments in ride-sharing startups.

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U.S. regulators are embracing self-driving cars faster than tech in the past, poising the nation for gains from the auto industry shift.

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Car ownership will wane as its high costs and inefficiency give way to ride sharing.

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UberPool has succeeded in de-stigmatizing car sharing, and could achieve mass adoption as the time saved offsets the slightly higher cost compared to public transportation.

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Fascinating questions to debate about how transportation will change as autonomy makes cars into mobile living rooms.

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China’s 668 million internet users and increasing urban disposable income is creating a massive market for mobile apps and services.

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Who rules China’s internet? Three big companies that compete on nearly everything, opposed to more function-specific American tech giants.

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Chinese businesses are embracing online advertising, and its e-commerce giants are amassing power faster than Amazon and eBay. The percentage of WeChat users who made commerce purchases doubled this year, and using WeChat for payment is popular.

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On-demand transportation in China grew 4X YoY, hockey-sticking in cities, and it’s over 4X bigger than in North America.

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Internet companies like Netflix and Amazon are crushing their old-school competitors, while new leaders like Slack and Uber are growing much faster than the last generation of enterprise apps and marketplaces thanks to smartphone penetration.

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The top 20 global internet companies. Many are aggressively acquiring startups and competitors to stay on top.

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Non-tech companies are buying tech companies instead of building their way into digital, and many are hedging their own doom by investing in their successors (General Motors funding Lyft, Whole Foods funding Instacart).

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Despite the “bubble bursting,” financing of tech companies has stayed strong, though there have been just two tech IPOs this year. Meeker believes there are both areas of overvaluation to avoid and undervaluation to exploit.

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Data is growing more powerful as storage prices drop and capture devices proliferate, and new tools are empowering everyone in a company to make decisions with data.

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Cybercrime remains a huge global problem with individuals and businesses needing to beef up security, while our views on privacy are relaxing as we embrace always-listening voice command navigation.

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