Three Things You Might Not Realize About Today’s Tech Industry

By Leslie Bradshaw
June 6, 2014
General Foundation

In the technology industry, there are few things more anticipated, poured over, and appreciated than Mary Meeker’s annual report on Internet trends. For those not familiar with Meeker, she is a general partner at venture capital firm Kleiner Perkins and is one of the most respected and sought after technology industry analysts and investors. 

Released at the end of May 2014, the full report can be viewed on SlideShare here (and all previous reports, which date back to 2001, can be accessed here). Though there are dozens of takeaways to be had, I’ve selected three here that stood out to me as particularly interesting.

97% of Smartphone Software is Made in the USA.  - If you were to look at the distribution of makers behind smartphone operating systems in 2005, you would see Finish powerhouse Nokia dominating the operating system landscape with over 60% of the market and open-source giant Linux accounting for another 20%. Today, Apple’s iOS, Google’s Android, and Microsoft’s Windows account for nearly all—97%—of the operating systems running on smartphone’s globally.

This shift is a testament not just to American ingenuity, but also the openness-to-developers fostered by the iOS and Android platforms in particular. Well-documented SDKs (software developer kits), hackathons, and app-driven revenue opportunities are all a part of the thriving communities that American-based software companies like Apple and Google have created.

 

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We Are Not in a Dot-Com Era Bubble. During the Code Conference on May 28th, Meeker pointed out that the IPOs in 2013 were 73% below 1999 levels. She also added that venture financings in the tech sector in 2013 were 77% below the peak level in 2000. Looking more broadly at the tech industry compared to all other industries in the S&P 500, it currently only represents 19%, which is down 16 percentage points from a high of 35% in March 2000.

The most important thing to take away from these figures is that while there may be discussions about the technology industry being overhyped or overfunded, the fact remains that the market has learned from its dot-com-dot-bomb mistakes and is allowing a “fruit fly experiment” of sorts to play out before doubling down in any one direction. And even when the big investments are made and the initial public offerings happen, they are done at a severely reduced rate as compared to the late nineties/early two thousands.

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Mobile is and will continue to be HUGE. Meeker looks at mobile through a number of lens, ranging from the percent of Internet traffic attributed to mobile, to a country-by-country comparison of total screen time spent with TVs, tablets, smartphones, and laptops and PCs. The current forecast for mobile-driven Internet traffic has it exceeding one-third of all Internet traffic by next year, up from a quarter of all Internet traffic this year. Current projects are following a trendline up and to the right for the foreseeable future.

 

As for screen time, it is interesting to take note of how universal smartphone usage is across the thirty major countries surveyed. Also of note, the prevalence of tablet screentime in countries like Indonesia, Thailand and the Philippines. A device not even on the consumer market until recent years, tablets are playing an increasingly important role in business and personal applications.

 

 

Both the smartphone and tablet trends combine to signal one thing: your workforce and your consumers are experiencing your brand, products and communications in on-the-go, multitasking and smaller-screen ways. This translates to needing to not just continue to evolve company policies to accommodate the increasingly mobile workforce, but also how you design your websites and communication materials for your end customer.

While the 2014 report’s view count hasn’t yet crossed one million, you can rest assured that the eyes that have been on it are the most influential and important in the technology industry. Do yourself a favor and join the technophile ranks who have already made their way through the 160-plus slide presentation. It is the single best resource to help you understand where we’ve been and where we are going with regard to Internet trends and America’s overall global competitiveness.