Highlights From Mary Meeker’s 2018 Internet Trends Report

Noted venture capitalist and Kleiner Perkins Caufield & Byers partner Mary Meeker recently released her annual Internet Trends report at the Code Conference in Rancho Palos Verdes, California. Among the 294 slides, Meeker explained that smartphone shipments did not grow in 2017, and Internet user growth slowed to 7 percent (more than half the world is already online). However, people are spending more time online. Of the 5.9 hours per day that U.S. adults spent on digital media last year, 3.3 were spent on mobile, which is leading the charge in digital media consumption.

Due in large part to cheaper Android phones and more available Wi-Fi, about 3.6 billion people will be connected to the Internet this year. And despite the introduction of $1,000 Apple iPhones and Samsung Galaxy Notes, the average price for smartphones worldwide continues to drop. This is impacting the adoption of phones in less developed markets and spurring sectors such as advertising, subscription services, e-commerce and mobile payments.

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Now that analysts and tech publishers have had time to digest Meeker’s report, write-ups focus on the top trends to watch. Recode lists some key takeaways:

  • Mobile payments are becoming easier to complete. China continues to lead the rest of the world in mobile payment adoption, with over 500 million active mobile payment users in 2017.
  • Voice-controlled products like Amazon Echo are taking off. The Echo’s installed base in the U.S. grew from 20 million in the third quarter of 2017 to more than 30 million in the fourth quarter.
  • Tech companies are facing a “privacy paradox.” They’re caught between using data to provide better consumer experiences and violating consumer privacy.
  • E-commerce sales growth is continuing to accelerate. It grew 16 percent in the U.S. in 2017, up from 14 percent in 2016. Amazon is taking a bigger share of those sales at 28 percent last year. Conversely, physical retail sales are continuing to decline.
  • Big tech is competing on more fronts. Google is expanding from an ads platform to a commerce platform via Google Home Ordering. Meanwhile, e-commerce giant Amazon is moving into advertising.
  • Internet leaders like Google and Amazon will offer more artificial intelligence service platforms as AI becomes a bigger part of enterprise spending.
  • China is catching up as a hub to the world’s biggest Internet companies. Currently, China is home to nine of the world’s 20 biggest Internet companies by market cap while the U.S. has 11. Five years ago, China had two and the U.S. had nine.

TechCrunch highlights some additional important points:

  • Mobile ads: People are shifting their time to mobile faster than ad dollars are following, creating a $7 billion mobile ad opportunity, though platforms are increasingly responsible for providing safe content to host those ads.
  • Crypto: Interest in cryptocurrency is exploding as Coinbase’s user count has nearly quadrupled since January 2017.
  • Subscription services: They’re seeing massive adoption, with Netflix up 25 percent, The New York Times up 43 percent, and Spotify up 48 percent year-over-year in 2017. A free tier accelerates conversion rates.
  • Education: Employees seek retraining and education from YouTube and online courses to keep up with new job requirements and pay off skyrocketing student loan debt.
  • Freelancing: Employees crave scheduling and work-from-home flexibility, and Internet discovery of freelance work led it to grow 3X faster than total workforce growth. The on-demand workforce grew 23 percent in 2017 driven by Uber, Airbnb, Etsy, Upwork, and Doordash.

For more details, Recode has published a full video and transcript of Meeker’s presentation. And KPCB posted the entire slideshow online.

Related:
20 Takeaways From Meeker’s 294-Slide Internet Trends Report, TechCrunch, 5/31/18
Mary Meeker: China’s AI Expertise Is ‘Focused and Organized and Gaining’, VentureBeat, 5/30/18
The State of Tech in 3 Graphs: Artificial Intelligence, The Cloud and Your Money, Forbes, 6/4/18
10 Highlights for IT Leaders: Mary Meeker’s Internet Report, The Enterprisers Project, 6/6/18
Top Takeaways for Banking Execs From the 2018 Internet Trends Report, The Financial Brand, 6/4/18