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2020 Benedict Evans Shoulders of Giants PDF
2020 Benedict Evans Shoulders of Giants PDF
0
Global population over 14 Mobile phones Smartphones Fully online
Source: World Bank, GSMA, Apple, Google, CNNIC, ITU, @BenedictEvans Benedict Evans –– February 2020 2
New technologies come in S Curves
New tech generally goes from stupid to exciting to boring
Smart
Phones
Smart
Phones
Smart
Phones
Mainframes
PCs
Web
Smartphones
IBM
Microsoft / Intel
Google / FB / Amazon
Apple / Google
Big companies
All companies
Middle-class families
Everyone
What happens
What are the next Regulation and
when everyone is
S Curves? policy
online?
What happens
What are the next Regulation and
when everyone is
S Curves? policy
online?
- Marc Andreessen
700
600
500
400
300
200
100
0
2000 2005 2010 2015 2019
Addressable retail* 4
Ecommerce
0
2000 2005 2010 2015 2019
Source: US Census
Benedict Evans –– February 2020 15
*Addressable retail = ex. cars, car parts, gasoline, restaurants & bars
Globally, the USA is in the middle of the pack
China leapfrogged physical retail, while the UK and SK are also far ahead of the USA
30%
25%
20%
15%
10%
5%
0%
China UK SK USA France Japan Germany Russia Brazil India
Capital Platforms
70
60
50
40
30
20
10
0
2014 2015 2016 2017 2018 2019
300
250
200
150
100
50
0
1995 2000 2005 2010 2015 2019
Revenue 300
Ecommerce
250
200
150
100
50
0
1995 2000 2005 2010 2015 2019
150
125
100
75
AWS
50
Ads & Other
25 Marketplace Stores
Subscriptions
0
First party ecommerce Platform Other
Marketplace 300
First party ecommerce
250
200
150
100
50
0
2014 2015 2016 2017 2018
15
10
0
2014 2015 2016 2017 2018 2019
Kylie Jenner's
Amazon sells Booking & But Macy's
make-up
placement for Expedia pay and Walmart
business:
$10bn Google $10bn did all this too
$1bn
Kylie Jenner’s
Amazon sells Booking & But Macy’s &
make-up
placement for Expedia pay Walmart did
business:
$10bn Google $10bn this too
$1.2bn
450
300
150
0
1995 2000 2005 2010 2015 2018
- Erik Nordstrom
100%
Non-addressable retail
75%
50%
Addressable retail
25%
Ecommerce
0%
'Online versus offline' 'Retail'
2%
0%
-2%
-4%
-6%
-8%
2011 2012 2013 2014 2015 2016 2017 2018 2019
Incumbents 100
Netflix
75
50
25
0
2011 2012 2013 2014 2015 2016 2017 2018 2019
15%
10%
5%
0%
2000 2005 2010 2015 2019
Pay TV 40%
Netflix
Youtube
30%
20%
10%
0%
Mar-16 Sept-16 Mar-17 Sept-17 Mar-18 Sept-18 Mar-19 Sept-19
Sport 20
Entertainment
15
10
0
Disney Comcast/NBCU Netflix ViacomCBS Warner Amazon Fox Sony Discovery Apple
Online 500
Broadcast
Pay cable
Basic cable
400
300
200
100
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
1,000
750
500
250
0
Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19
0
Total UK TV Netflix USA BBC 1 (UK) Global Twitch ITV 1 (UK)
25
20
Amazon
15
10
Netflix
0
Streaming Top 5 European markets
70
60
50
40
30
20
10
0
Youtube Netflix ITV BBC Channel 4 Amazon Prime Channel 5
APAC 175
LATAM
EMEA
North America 150
125
100
75
50
25
0
Mar 17 Jun 17 Sept 17 Dec 17 Mar 18 Jun 18 Sept 18 Dec 18 Mar 19 Jun 19 Sept 19
- Jim Barksdale
But!
New distribution channels
There can only be so many brand
break apart old
relationships
aggregation models
Aggregators exist for a reason
Many big brands are actually B2B
Everyone wants to
businesses anyway
unbundle and go direct
Lots of rebundling coming
83% of US
Most people Most people Most people
teenagers
don’t have don’t have don’t have
have an
broadband 3G smartphones
iPhone*
40%
30%
20%
10%
0%
1995 2000 2005 2010 2015 2017
300
250
200
150
100
50
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
6
?
5
0
Mainframes PCs in 1994 Web in 2007 Smartphones in 2019 Global population over 14
Source: UN, GSMA, ITU, Apple, Google, CNNIC, @BenedictEvans Benedict Evans –– February 2020 62
And is this the new thing, or part of the old thing?
Smartphones began as a PC accessory, but now PCs are a smartphone accessory
PC
internet ?
Mobile?
0
Global population over 14 Mobile phones Smartphones Fully online
Source: UN, GSMA, ITU, Apple, Google, CNNIC, @BenedictEvans Benedict Evans –– February 2020 68
Which also meant creating huge, scary companies
7 of the 10 largest global companies by market cap are tech
1,200
1,000
800
600
400
200
0
Apple Microsoft Google Amazon Facebook Berkshire
Alibaba Tencent Johnson &
Exxon
Hathaway Johnson
Encryption
Hate speech Filter bubbles Political
advertising
Into what?
century
40%
30%
20%
10%
0%
Amazon Walmart US groceries Macy's US general retail UK packaged food
Tech companies
being bad to Tech companies Bad people
other companies being bad to us using tech
Privacy, security Abuse, fake news,
Search, app stores,
(but not pricing) elections…
ad pricing
Other 100%
Facebook
Google
75%
50%
25%
0%
Search Social (DAUs) Online advertising All advertising
40%
30%
20%
10%
0%
First party share GMV share of GMV + Stores share GMV + Stores share Walmart share of
of ecommerce ecommerce of total retail of addressable retail addressable retail
100%
75%
50%
25%
0%
Global unit sales Global installed base US installed base US app store sales US teenager iOS app stores
installed base
Source: Apple, Gartner, Operators, @BenedictEvans, Piper Jaffray Benedict Evans –– February 2020 81
But they don’t have Regulators define
market dominance! the relevant market
however they like!
Market definition is everything
Google Facebook
Amazon Apple
YouTube Instagram &
WhatsApp AWS (cash cow, but Content stores?
Android? Gmail?
not the only one) Music?
Display ads? Oculus?
Little impact on
More competition Split apart
network effects
in the ad market Instagram or
or product
YouTube
competition
Tech companies
being bad to Tech companies Bad people
other companies being bad to us using tech
30
25
20
15
10
0
Cargo shipping Pharma Oil & Gas Fishing Airlines Banks Finance Cars Electrical utilities Refining
Public
Retail deposits securities Insider trading
markets
Landlord
IRS
Market counterparties
Auditor
Microsoft Excel
Bernie Madoff
SEC
Phone company
Suspicious peers
Open
Police platforms
access
Secure, private,
Catch state Trustworthy
minimal data
‘bad actors’ information
collection
Moderate
Empower
‘bad’
competitors
content
Open
Police platforms
access
Secure, private,
Catch state Trustworthy
minimal data
‘bad actors’ information
collection
Moderate
Empower
‘bad’
competitors
content
Advertising
Recommendation engines
Public feeds
Groups
Private feeds
Group
messages
1:1
60%
40%
20%
0%
Brazil Canada France Germany India Italy Japan Spain UK USA
Source: Pew Global Attitudes Survey, 2015 Benedict Evans –– February 2020 99
Do we know what we want?
We lack consensus on what’s bad enough to ‘take down’, and on what ‘take down’ even means
Totally public
Totally private
3.0
2.5
2.0
1.5 Other
India
1.0
North America
0.0
China & India RoW
Source: Apple, Google, CNNIC, @BenedictEvans Benedict Evans –– February 2020 103
The end of the American internet
China and India use more mobile data than the rest of the world combined
20
15
India
Other
10
China
5
Western Europe
North America
0
China & India RoW
2.0
India
1.5
Other
1.0
Western Europe
China
0.5
North America
0.0
China & India Other
75%
50%
25%
0%
Google Apple Facebook Netflix
California,
USA EU China Singapore,
UK, etc
300
250
200
150
100
50
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Future
Old New
Use our country’s
Store your data in Follow our rules in
rules outside our
our country our country
country
Open
Police platforms
access
Secure, private,
Catch state Trustworthy
minimal data
‘bad actors’ information
collection
Moderate
Empower
‘bad’
competitors
content
10.0%
7.5%
5.0%
2.5%
0.0%
<$100m $100-250m $250-500m $500m-1bn $1bn-10bn
Source: Dahl, Meyer and Neely 2016 Benedict Evans –– February 2020 117
Conclusion:
welcome to the world
Systemically
Mainframes
PCs
Web
Smartphones
important part of
Big companies All companies Middle-classes Everyone
society
Ships,
Industrial
Railways aircraft, cars, Internet
food
databases…
Yes to moderation…
“Censorship is bad”
But whose decision is it?
AI changes this…
30,000
20,000
10,000
0
Year 1 Year 2 Year 3 Year 4 Year 5
Source: Davis Polk & Wardell LLP Benedict Evans –– February 2020 125
Thank you
Benedict Evans
February 2020
www.ben-evans.com