What's in the 2017 Internet Trends Report?

The Internet Trends Report

Mary Meeker is listed in Forbes as the 77th most powerful woman in the world. As a stockbroker and technology analyst for Morgan Stanley and later a partner at the venture capital firm of Kleiner Perkins Caufield & Byers, she developed a knack for spotting trends in the online world.

Her yearly Internet Trends report highlights what's happening and what to expect in the areas of mobile devices, online advertising, ecommerce, gaming, streaming media, cloud services, healthcare and other areas. You can view all 355 slides in her report if you like, but here are the items that caught my eye.

You might be paying more for your next mobile gadget. Smartphone adoption is slowing worldwide; more than two-thirds of Americans already use smartphones. Smartphone unit shipments grew by just 3% in 2016 versus 10% in 2015. But phone manufacturers may try to increase average sale price to compensate for slowing unit shipments.

One thing that's not slowing down is the number of hours that we spend on mobile devices. Five years ago, adults in the USA spent on average less than an hour daily. In 2016, that number was 3+ hours per day. Taking desktop into account, U. S. consumers spent 5.6 hours a day online in 2016, on average. That’s up 4% over the previous year, which was up 6% from 2014.

Still using your keyboard? That's old school. Voice is becoming an important input channel on mobile and other devices. Twenty percent of mobile searches were issued by voice in 2016. It helps that the accuracy rate of voice interpretation by machines is up around 95% now. I'm always surprised when I dictate a text message or a Google search, and it's spot on. I was also surprised to learn that over 10 million Amazon Echo devices are in use in the USA.

Gaming is a huge global market, with 2.6 billion gamers playing in 2017 versus 100 million in 1995. We now have “professional” gamers who are sponsored by game makers, and at least one university is offering scholarships to competitive game players. Not to mention dozens of scholarships in game design and programming.

Wearable tech is gaining market share, with 25% of Americans owning at least one wearable in 2017; that’s up from 12% in 2016. Health and fitness continues to drive adoption of wearable tech. Sixty percent of consumers are comfortable sharing their health data with the likes of Google, Meeker’s survey finds.

Disruption is the Watch Word

Disruption is a word often used to describe how new technology can quickly displace long-established norms. Streaming music sales surpassed music sales on physical media. Spotify was the greatest contributor to this trend. Netflix has captured 30% of the home entertainment market in its ten years of existence. Meanwhile, traditional TV viewing continues its decline. Consumers says cord-cutting is mostly due to the high price of pay-TV services.

Stick to desktop PC browsing if you want to see fewer ads. Meeker’s report found that online advertising expenditures grew by 22% in 2016 versus 20% in 2015, reaching $73 billion in total. Online advertising revenue eclipsed TV ad revenue for the first time. About $43 billion of that was mobile advertising. Desktop ad spending decreased slightly; in the past six years, it’s fluctuated between $30 and $38 billiion. Google and Facebook snatched 85% of online ad spending between them.

Customer service conversations are rapidly moving to online chat from telephones. 400 million customer service conversations happened in chat during December, 2016, twice as many as in July.

Online shopping is exploding, while retail stores are imploding. Store closings are rampant, breaking a 20-year record. But FedEx, UPS and the postal service must be happy that over 10 BILLION packages were delivered in 2016. Many apartments lobbies are becoming package warehouses. Another related trend is that opening boxes is becoming a form of entertainment. There are 33 million subscribers to "unboxing" channels on YouTube.

New brands are beating old brands with higher-quality products and fewer choices, making the online purchasing experience much simpler. E-commerce shipments grew by 9% on a pace comparable to previous years. Amazon is eating everyone’s lunch online and offline.

People created 14 zettabytes of data in 2016. That’s 14 trillion gigabytes, a figure that is nearly incomprehensible even to astronomers. Meeker predicts user-generated data will grow exponentially, reaching 163 zettabytes in 2025. That’s a lot of cat videos.

Phishing emails with malicious attachments are growing rapidly. This trend has led to more corporate data breaches, which exposed 100 million identities in 2016.

Meeker looked at 25 of the most highly valued public companies in Silicon Valley and found that 15 of them were founded by first- or second-generation immigrants. Those companies employ 1.6 million people. She also found 50% of the most highly valued private companies were founded by first-generation immigrants.

I think you'll find it interesting to flip through the slides in the Internet Trends report. Which trends do you find most interesting, surprising or frightening? Your thoughts on this topic are welcome. Post your comment or question below...