Founder Labs San Francisco Summer 2011

8/4/2019 Founder Labs San Francisco Summer 2011

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Founder Labs

Summer EditionThe Mobile Ecosystem

August 12, 2011

Licensed under Creative Commons Attribution 3.0 Unported License (http://www.creativecommons.org/licenses/by/3.0)You are free to Share or Remix any part of this work as long as you attribute this work to SF Mobile (sfmobile.org)


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Lars Kamp

www.sfmobile.org

San Francisco, [email protected]

Lars Kamp

Suite 1200560 Mission StreetSan Francisco, CA [email protected]

Work Network

@l1rs


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Companies.


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Todays topics.

Silicon

Mobile Economics

Cloud

Whats Next?

History


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A note on peoples ability to predict the future.

J. C. R. LickliderGrandfather of the Internet

People tend to overestimate

what can be done in one year

and to underestimate what can

be done in five to ten years.

J. C. R. Licklider, 1965


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History


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A bit of Silicon Valley History:

General Magic, Apple spin-off, 1990.

We have a dream of improving the lives

of many millions of people by means ofsmall, intimate life support systems thatpeople carry with them everywhere.

These systems will help people to

organize their lives, to communicate withother people, and to access informationof all kinds.

They will be simple to use, and come in awide range of models to fit every budget,need, and taste. They will change theway people live and communicate.

General Magic Mission Statement, May 1990


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General Magics Magic Cap.

Magic Cap User Interface, 1994


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Three people from the team that architected Magic Cap.

Andy Rubin Tony Faddel Kevin Lynch


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General Magics lasting influence on Android

Magic Cap UI, 1994 G1 HTC Dream UI, 2008

Source: Wired, Accenture analysis.


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Google is iterating Android at a breathtaking pace

Oct 2008Android Marketannounced.First device.

July 2005Android acquired afterAndy Rubin meets withLarry Page for support.

2005 2007 2008 2009 20112010

Sept 2003Androidincorporated.

Android uses Googleas default searchengine.

Nov 2007OHA founded.

Android platform

unveiled.

Apr 2009AndroidSDK

released

History of Android

D E FC GSept2009

Donutv1.6

Oct2009

clairv2.0

May2010

FroYov2.2

April2009

Cupcakev1.5

Dec2010

GiBrv2.3

HMar2011

HoCov3.0

IH2

2011

ICv3.1

2012

Source: Google, Accenture analysis.


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including one OEM and SemiCo at a time.

D

Sept2009Donutv1.6

E

Oct2009clairv2.0

F

May2010FroYov2.2

C

April2009

Cupcakev1.5

G

Dec2010GiBrv2.3

H

Mar2011HoCov3.0

HTCDream

SamsungBehold II

MotorolaDroid

HTCNexus One

SamsungNexus S

MotorolaXoom

AndroidRelease

Hero

Device

Chip

QualcommMSM7201A528MHz

QualcommQSD8250998MHz

IntrinsityS5PC1101,000MHz

NVIDIATegra 2 2501,000MHz

TI OMAP3430600 MHz

QualcommMSM7201A528MHz

Nov2011

IceCrmv3.1

I

?

Nexus3

?

Source: Accenture analysis.


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The IP Wars.

Uggh,FAWK

I will eatyour babies.

Om nomnom

nom.

Me too.


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Silicon


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Gordon Moore.


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Moores Law since ~1965 on the desktop.

Source: Intel.


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Coming your way in mobile as well.

Today, you

are here

Nvidia Tegra roadmap: 2 orders of magnitude until 2014.

Source: NVIDIA.


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Massive on-deck computing power for smartphones...

1966Apollo Guidance

Computer Block I

4,100 Integrated Circuits

1 MHz Clock Speed

9 KB RAM

2011SamsungGalaxy S2

2016Era of

Uberphones

~1B ICs

1GHz+

~4 GB

~26M ICs

1 GHz

512 MB

Source: Computer History Museum, Accenture analysis.


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Horizontal de-layering of the silicon industry.

19Sources: ARM company website, Cadence company website, Accenture analysis. HW engineers refers to design, SW engineers to validation.Copyright 2011 Accenture All Rights Reserved.\

Fully Vertically

Integrated:Design &Foundry

1970sVertical

Suppliers

ASIC Vendor

SystemManufacturer

(Foundry)

1980sASIC

Vendors

Design &Distribution(Fabless)

EDA

Foundry

1990sFablessSemis

IP

Design &Distribution

EDA

Foundry

2000sIP-drivenDesign

IP

Design &Distribution

EDA

Foundry

2010sSW-driven

Design

SystemPorting

Texas Instruments VLSI Technology Qualcomm ARM Various

1 : 0 1 : 0.5 1 : 1 1 : 2 1 : 2+RatioHW : SWEngineers


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ARM vs. QCOM.

20Sources: Google Finance, Accenture analysis.Copyright 2011 Accenture All Rights Reserved.

0

50

100

150

200

250

300

350

400

450

500

Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

ARM announcement thatmajor OEM acquired

architecture licensein July 2008

QCOM106 Index

05/12/11

ARM460 Index05/12/11

Daily Stock Prices ARM vs. QCOMIndexed, 01/01/2006 03/30/2011


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Apple: A single application processor for all devices.

iPhone

Apple TV Time Capsule ?

iPad


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2 philosophies:Discrete baseband & CPU vs. a single, integrated SoC.

Apple: Discrete BB & CPU HTC: Integrated SoC with BB & CPU

iPhone 4 HD7

Qualcomm Baseband Apple CPU Qualcomm Snapdragon SoC

Physical separation of computing for RFand applications through different chips

Logical separation of computing for RF andapplications but physically on same chip


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The likely future, just untethered.


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Economics


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Explosive growth for mobility.

We really see Mobile a bit like Searchwas in 2001, 2002, 2003. All these formatsare so new it is a mistake to say todaywhatever we have is a good proxy for whatthe future will look like. I actually have anew metric to report in Android of 550,000

phones activated a day. That's a hugenumber, even by Google standards.

Larry Page, Google CEOQ211 Earnings Call, July 14th, 2011

Mobile quoted 39 times during call Mobile quoted 62 times during call

eBay mobile apps have been down-loadedmore than 45 million times [with]$4 billionof volume on eBay Mobile: [] the mobiledevice is absolutely lowering the boundaryor blurring the boundary between online andoffline; [] this has created incremental

opportunity far greater than what wewould've expected.

Joe Donahoe, eBay CEOQ211 Earnings Call, July 20th, 2011

We were thrilled to sell a record 20.3million iPhones compared to 8.4 million inthe previous June quarter. This represents142% year-over-year growth. [] iPhonecontinues to be adopted as the standardacross the enterprise with 91% of the

Fortune 500 deployed or testing the device,up from 88% last quarter.

Peter Oppenheimer, Apple CFOQ311 Earnings Call, July 19th, 2011

iPhone quoted 48 times during call

We [...] have articulated a very stronginnovation-oriented strategy and mobilityplays a very strong part in that. [] If youlook at our results this quarter you'll see thatit's not only the new categories that drivegrowth for us, it's also the traditional core

business of SAP. []Mobile will changethe way we work and the way we live.

Jim Hageman Snabe, SAP CEOCNBC Interview July 27th, 2011


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Software-driven innovation.

The problem is, in hardware you

can't build a computer that's twice as

good as anyone else's anymore. []

But you can do it in software.

Steve Jobs, 1994

Steve Jobs1994 Rolling Stone interview

Source: Rolling Stone Magazine.


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SW is fueling the app store economy: ~350,000 apps.

Catalog Size Apple App Store vs. Android Market2008-2011, by Number of Available Apps at End of Quarter

Source: Apple press releases & earnings calls, Google, AndroLib, PCWorld, Distimo, Accenture analysis. Catalog size for Apples excludesbooks. All numbers rounded.

740 4,40013,200 25,300

52,61074,500

97,000

149,000

225,000

250,000

300,000

350,000

600 2,900 5,20011,500 20,100 35,200

56,200

130,000

200,000

310,000

Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11

ESTIMATES


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The early days with iOS & Android: A mobile revolution.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

App & Mobile Web Usage Growth, USAds Requested, April 2008 March 2010

AdsReque

sted(Millions)

32%MonthlyGrowth

(Nov08-Mar10)

19 %MonthlyGrowth

(Apr08-Mar10)

RIM

Others incl. Palm& Windows

Source: AdMob, Accenture analysis.


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But: An app is not a business model.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 30 60 90 120 150 1800%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 30 60 90 120 150 1800%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 30 60 90 120 150 180Days After First Measurement

RetentionRate

News (9.1%)

Games (2.4%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 30 60 90 120 150 180

News (9.8%)Enter-tainment (2%)

Days After First Measurement

Source: Flurry, Accenture analysis. User retention defined by the number of users who downloaded an application and launched the application at any time in the past,and also launched the app within the last seven days, e.g. "30 days ago" represents any new user that launched a given app in January and also again withinthe last seven days. "60 days ago" represents new users identified in December and also used within last 7 days. Sample based on relevant 5-6 apps percategory with at least 120 days of data availability in the Flurry system.

Retention Rates of Mobile Apps Over Time, 2010


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90% dead after 90 days.

52%

40%

34%

35%

33%

20%

9%

10%

9%

4%

58%

38%

34%

38%

42%

18%

5%

10%

7%

16%

iPhone App RetentionAs of January 2010, by Application Category

30 Days 90 Days

Android App RetentionAs of January 2010, by Application Category

News

SocialNetworking

Games

Lifestyle

Enter-

tainment

30 Days 90 Days

39% 10% 42% 11%Average

RetentionRates

Source: Flurry, Accenture analysis.


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Enter analytics


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and push notifications.


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Facebook: Putting a social layer into your app.

News and Media Companies Commerce and Sales Companies

90% more articles are read85% more time is spent

4x increase in traffic fromFacebook

8 minutes longer on site22% more pages are read

$5.30 of direct ticket salesresulted from sharing links

57% more money spent per user

40% increase in referraltraffic from visitors

Increase in traffic and timespent on websites through

Login with Facebook

Increase in sales throughuser of social plugins:

Like and Share


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Emergence of solid mobile business models.

Location DiscountsInventory Transparency Reviews

Finds deals at localretailers of

national chains

Real time visibilityinto restaurant

inventory

Real-timediscounts on localmerchant offers

Compare localprice with best

prices on the web

Crowd-sourcereviews beforebuying decision


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Ephemeralization:Progressively accomplishing more with less

Buckminster Fuller


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Early ephemeralization aka appification:Devices are being replaced by apps.

Copyright 2011 Accenture All Rights Reserved.

2006 2011 and Beyond

Camera Camera

Credit Card Payments

MP3 Player Music

TV Video

Phone Voice


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Software eating people and things.

People Things

Taxi Dispatcher ATMs Keys


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And its only the beginning.

Global Mobile Shipments2005-2015E, Millions

TotalDevices

Millio

ns

777920

1,064 1,039 9541,085 1,105 1,135 1,147 1,151 1,150

57

82

124 151173

303453 582

707 820926

833

1,0021,188 1,190 1,128

1,389

1,5571,718

1,8541,971

2,076

0

500

1,000

1,500

2,000

2,500

2005 2006 2007 2008 2009 2010 2011 E 2012 E 2013 E 2014 E 2015 E

SP Shareof Total

7% 8% 10% 13% 15% 22% 29% 34% 38% 42% 45%

10 15CAGR

8.4%

SmartPhones 25.0%

NonSPs

1.2%

Source: IDC Accenture analysis.


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Mobility hardware:This morning at Coupa Caf in Palo Alto: Bump Cube

A i k t di t ib ti f bilit h d


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A quick note on distribution of mobility hardware.

26 500 A l t il l lli HW t 250M


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26,500 Apple retail employees selling your HW to 250M+annual visitors in 323 stores in 11 countries.

Source: Apple.

New York Paris Tokyo

Sydney Munich Shanghai

The Apple Store


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The Apple Store:$13B in sales, with more $/SqFt/Year than Tiffany & Co.

Source: SECfilings, Accenture analysis.

$4,793

$3,010

$866

$425

$391

RetailRevenue

($B)

RetailStores

(#)

RetailSpace

(M SqFt)

FTEs /part-time

employees(K)

13 323 2.5 30

3.1 233 1 9

50.3 4,172 58 180

419 8,970 985 2,100

9.3 204 23.8 52

$397

$337

$279

$200

$179

$102

$36

$33

$128

$125

$ / SqFt / Year($)

$ / employee /Year ($K)

$ / Day / Store($K)

$ / Store / Year($M)

Scale of Retail Operations Retail Revenue Metrics

Q3 FY2010 Q2 FY2011

$37

$13

$12

$47

$46


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Cloud

Who is building a cloud?


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Who is building a cloud?

Prineville, OR USA The Dalles, OR USA

Maiden, NC USA Dublin, Ireland

Lockport , NY USA

Morrow, OR USA

Stuff you can do with the cloud (growing as we speak)


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Stuff you can do with the cloud (growing as we speak).

~65M+Users

GamingDaily

~ 7,000+Tweets per

Second

~50,000+Searches

Served PerSecond

~41BAPI Calls

per Day

Stuff you can do with the cloud and your phone


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Stuff you can do with the cloud and your phone.

Industrialization of the mobile cloud


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Industrialization of the mobile cloud...

Today

Tomorrow

HTTP(custom libraries)

SDKs

Cloud Device

will bring massive off-deck computing to mobile


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will bring massive off deck computing to mobile.

AndroidCloud to Device

Messaging Framework

Project Hawaii &Project Maui on

Windows Phone 7

Mobile Dev CenterAWS SDKs forAndroid & iOS

Source: Corporate websites.

Googles Spanner: 107 = 10M machines.


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Google s Spanner: 10 = 10M machines.

Source: Google.

Ephemeralization of the back-end.


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Ephemeralization of the back end.


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Whats

Next

Jevons Paradox


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William S. JevonsFrom the Book The Coal Question

It is a confusion of ideas to suppose

that the economical use of fuel is

equivalent to diminished consumption.

The very contrary is the truth."William S. Jevons, 1865

As computing gets cheaper


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1950 1960 1970 1980 1990 2000

105

104

103

102

10

U.S. Asset Prices, 1945 - 2008Normalized, 1995 = 100

Source: The Business Impact of IT, based on U.S. Bureau of Economic Analysis data.

p g g p

Industrial Equipment

NormalizedPrice:1995=100(

log)

Other Equipment

TransportationEquipment

Computers andPeripheral Equipment

companies consume more of it.


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U.S. IT Investment, 1970 - 2008Investment per Employee & Nominal Annual Investment

1970 1975 1980 2000 2005 2010199519901985

3,500 350B

250B

200B

150B

100B

50B

3,000

2,500

2,000

1,500

1,000

500

0

300B

0

Source: The Business Impact of IT, based on U.S. Bureau of Economic Analysis data.

IT Investment /Employee

AnnualInvestmentA

nuua

lInvestmentp

erEmployee

($)

Nom

inalAnuualIn

vestment($B

)

Plenty of cash.


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Cash on Hand for Select Tech TitansCash and Cash Equivalents, as of 1/26/2011

44

39

35

27

29

22

11

10

7

6

Total of226B

Source: SEC filings.

And then there is Facebook .


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0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.92.1

2.3

2.5

2011 2012 2013 2014 2015

US EU BRIC RoW

$8.10

0.7B

$5.7B

-2% -2% 45% 20%

4% 15% 90% 33%

4% 15% 268%* 33%

2.22B

1.27B

2.52B

Worldwide Facebook Usersbased on 3 User Growth Scenarios, EoY (2011-2015)

$8.18

1.0B

$7.3B

$8.20

1.3B

$9.6B

$8.32

1.7B

$12.8B

$8.54

2.2B

$16.8B

Avg. ARPU

EoY Users

$B Rev.

Y-o-Y Growth Rates 11-15

1

2

3

Scenario 2

Total of ~700-800Mglobal FB users by

end of 2011

Think again


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J. C. R. LickliderGrandfather of the Internet

People tend to overestimate

what can be done in one year

and to underestimate what can

be done in five to ten years.J. C. R. Licklider, 1965

Lessons learned. A few thoughts on:


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Your Team: Whos in charge?

Build: iOS vs. Android vs. HTML5

Pitching: Killer exec summaryFunding (Angels): Oceans 11

Funding (VC): Lots vs. little


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Good Luck!

Founder Labs San Francisco Summer 2011

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