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Mary Meeker's Internet Trends 2018 Report: Smartphone Shipments Stagnate in 2017, E-Commerce Grows, and More

Mary Meeker's Internet Trends 2018 Report: Smartphone Shipments Stagnate in 2017, E-Commerce Grows, and More

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Highlights
  • Mary Meeker released her Internet Trends 2018 Report this week
  • She highlighted outlook for Google and Amazon
  • Meeker also noted China's Internet success story
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Veteran venture capitalist Mary Meeker recently released her annual Internet trends report, considered to be one of the most important tech analysis statements of the year, at Recode's Code Conference in California. As part of the report, she noted that smartphone shipments and Internet adoption growth went down over the past year, as did the global average price of smartphones; AI will become a big part of enterprise spending for companies like Google and Amazon; and she also elaborated on China's Internet success story.

Smartphone shipments stagnate
At the 2018 edition of the Code Conference earlier this week, in Kleiner Perkins Caufield & Byers' Mary Meeker released 294 slides of her Internet Trends 2018 Report, One of the biggest takeaways of her report was that 2017 became the first year in which smartphone unit shipment growth was stagnant. This stagnancy is claimed to have occurred due to a large part of the global population transforming into smartphone owners, causing growth to stall.

Average smartphone prices fall
With smartphone adoption in less-developed markets being fuelled by the wide availability of inexpensive handsets, Meeker noted that the global average price of smartphones continued to fall down in 2017 despite the latest flagship models from Apple's iPhone lineup and Samsung's Galaxy Note lineup that launched at more premium price points than previous generations.

Time online rises
Apart from stagnating smartphone shipments, Internet adoption also slowed down to 7 percent YoY with more than half the world's population already online. Despite adoption slowdown, however, Meeker noted that users are increasingly spending more time online with an average of 5.9 hours per day on digital media in 2017, compared to 5.6 hours per day the year before that. Around 3.3 hours, out of the 5.9 hours, were on mobile, which according to her is responsible for the growth of digital media consumption.

Boost for e-commerce
As people shifted from browsing through physical retail stores to shopping online, e-commerce sales grew by as much as 16 percent in the US in 2017, compared to 14 percent in 2016. Amazon took home the biggest reward with almost 28 percent share in those sales.

China's Internet success story
In terms of Internet growth, China seems to have no one in its way. From the top 20 Internet companies in the world, nine are based out of China while 11 are from the US. The phenomenal growth can be seen by comparing it with the situation five years ago when China only had about two of those companies while US had nine. Leading the chariot in the Asian country is Alibaba. "Alibaba has much higher GMV, customer merchandise volume, and Amazon has much higher revenue," said Meeker comparing the two leaders from China and US respectively. China also has 20 percent of the market share of e-commerce sales which is the highest in the world.

Google's and Amazon's growth and outlook
Google and Amazon will push the betterment of AI as enterprise expenditure in the field increases. In last year's report, as well as in this one, Meeker stated that Google's machine learning recognition was almost as good as human voice recognition. Additionally, she said that Google is shifting from being just an ads platform to a major commerce platform courtesy Google Home Ordering. On the other hand, e-commerce giant Amazon is moving into advertising.

Smart speaker growth
While Meeker did not mention any numbers for the Google Home, Amazon Echo was part of her report. As per the slides, the overall installed base for Amazon's range of smart speakers in the US grew from 20 million in the third quarter of 2017 to 30 million in the fourth quarter of the same year, an astonishing 50 percent quarterly growth.

Facebook fiasco
Commenting on the recent data privacy scandal that Facebook was caught up in the past few weeks, Mary Meeker noted that rising monetisation and growth increases scrutiny over how companies handle data. "It's important to understand the unintended consequences of the products...It's also irresponsible to stop innovation and progress, especially in a world where there are a lot of countries that are doing different things," she said in her keynote.

Meeker noted that tech companies now contribute to over 25 percent of the US market's capitalisation with giants like Apple, Alphabet, Amazon, Facebook, and Microsoft at the forefront of the growth.

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