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The Future Of Mobile:  2014

Tony Danova
BI Intelligence

NESS
DER
Is The Mobile Revolution Over? 

 

BUSINESS
Source:  Geekosystem [N 5 ' DER
Smartphones Are Everywhere

 

4
4 . 
.  /  9
i / l_
I " ‘
A x’ ’—* ' 
E‘ 4
1 #7“ V’
.  '4
BUSINESS

Sources:  Left,  Bott...
‘Dvmbphones' Have Faded

Global Mobile Phone Sales

Smartphones

/ 

  
  
 
   

Bl lNTl? l.l. l(}l7.NCl7

Feature Phones...
Global Tablet Growth Is Cratering

Global Tablet Shipments

Quarterly,  Year-0ver- Year And Sequential Growth
300%

250% B...
Developed Mobile Markets Are Nearing Maturity

U. S. Smartphone Penetration

80%
72%

l
o
o°

as
o
o°

U1
0
§

on
o
$

N
o...
The Market Is Super Crowded

THEN NOW

 

BUSINESS
Sources:  Bottom Right,  Channel Eye.  All Others,  Reuters.  1” 51 DER
So Is Mobile Over? 

U. S. Smartphone Market:  Year-Over-Year Net Adds

-5
O

U0
U1

(N
O

Users Added (Millions)
l) N)
o ...
Depends WhatYou Mean By Mobile

Lou ll Iuuuclnz

THE    I 73°"  ; ,.,  |-_) y“. |, 

vow SYORES N 11031

iT| )r. ’‘mx! ]or...
The App Economy is Booming

Estimated App Revenue
Apple App Store Vs.  Google Play

Apple App Store

5200 B1 INTELLIGENCE
...
Mobile Revenue ls Moving Away From Hardware
And Into Software/ Apps

Share Of Combined Handset And App Revenues

2012-2016...
Mobile Advertising Is Exploding

FORECAST:  Digital Advertising Revenue (us)

BI INTELLIGENCE 530

 S60

Mobile $50

We ar...
So Is Mobile Commerce

Forecast:  U. S. E-Commerce And Mobile Commerce
$600

Bl INTELLIG ENCE
E-commerce CAGR =  16% $500
...
Mobile Has Led To Huge Platforms With > 1 Billion Users

Millions Of Users

The World's Top Computing Platforms By User

N...
And Billions In Mobile Revenue

Annual Ad Revenue From Mobile

 

$14

$12

$10

Facebook

E $8 ‘
.2
5‘.  $6

$4

$2 Yahoo...
Social And Music Are Now Mostly Mobile

Mobile Usage:  Pandora,  Twitter,  Facebook

90%
Pandora

80%

70% BI INTELLIGENCE...
Mobile-First Media Companies Are More Valuable
Than Some Traditional Media

Selected Company Market Valuations

Mobile-Fir...
Mobile ls Beginning To Disrupt Giant Industries, 
Like Payments 

FORECAST:  US Mobile In-Store Payment Volume
$189 $200

...
Banking

Half Of Online Banking Customers Use Mobile
Wells Fargo,  Bank of America,  and Chase*

2-Year CAGR
Active online...
And Health

Average Daily App Usage Growth

Global i0S Users,  December 2013 - June 2014
70% ’

62%

aw
o
o°

BI INTELLIGE...
Mobile Is Shifting Online Business Models

GrubHub/ Seamless Daily Average Grubs

181,200
40%
129,100 56%
65%
44%
35%
Q1 2...
New Devices Will Broaden What Mobile Means

BUSINESS

INSIDER

Sources:  Clockwise from left:  Apple,  Ferrari,  Business ...
"Mobile is over.  I think it's just a screen. 
You'll absolutely need a screen,  but
you'll need more than one. ”

— Matia...
Many People Will Use Five Screens

Global Internet Connected Device Shipments

2,500
2,000
Wearablg
Bl INTELLIGENCE
SmartT...
Let's Look At Some OfThe Mobile
Opportunities Individually

BUSINESS
INSIDER
MOBILE COMMERCE

 

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l : , i, J->, *'
/ — 
l |  I
. :.: .—. ‘  l
3% V i
I I 
0
fa‘ V x 

BUSINESS
Source:  ...
Mobile Commerce Dwarfs Other Areas

Mobile Commerce Dominates Mobile Revenue

Growth
$600
$500 ‘ BI lNl‘lll, l<; }li‘(fl: ...
Phones And Tablets At ~3o% Of E-Commerce Traffic 

Ecommerce Website Traffic Share By Device

100% "

Smartphone
90%

80% T...
Mobile is Carving Out A Share Of E-Commerce Sales

US E-Commerce Sales

BI INTELLIGENCE

Billions
01- U‘)-
-l> 0-: 
o o

B...
And Growing Much FasterThan Traditional E-
Commerce

Mobile Commerce Is Growing Much Faster Than
Desktop-Based Commerce (Y...
Online And Traditional Retailers Are Seeing Their
Shoppers Go Mobile

Monthly US Visitors Across Retail Websites
Audience ...
Shoppers Spend Nearly As Much On Mobile Orders

As They Do On Desktop

Apple Users Are The Most Valuable Online Shoppers

...
It's Not Just Apps  Traditional Retailers Are
Investing In Fast Mobile Websites

Industry Average
Cabelas

Urban Outfitter...
Mobile Commerce is A Global Trend

Alibaba vs.  eBay (Q2 2014)

Mobile Gross Merchandise Volume (5 Billions)

Desktop.  S5...
MOBILE ADVERTISING

 

Mark Zuckerberg’s Facebook has won big in mobile advertising. 

BUSINESS
INSIDER
Now,  Over 1/4 Of Internet Traffic ls Mobile
Global Internet Traffic Share

Desktop Vs.  Mobile

100%

90%

80%

70%

0

5°‘...
Mobile Has Extended The Digital Day

 B1 INTELLIGENCE

TMobi| e Visits *'Desktop Visits
1,400,000

1, 200, ooo
1,000,000
8...
Mobile is The Only Media Time That Is Growing

50%

45%
.  44%
"4396
—42%

45%

40% 39%

37%

35%
30%
25%
20%
15%
10%

5%
...
And The Money Is Following 

U. S. Advertising

BI INTEI_l. lCENCl*'

$80 Offline

All Other Online

<a°’®“’<$‘<a“’°9o°o"'o...
Mobile Will Be 15% Of US Ad Revenue In 2018

FORECAST:  Advertising Revenue By Format (us)

$250
BI INTELLIGENCE
Desktop D...
Mobile Is The Top Digital Ad Category For Growth

Advertising Revenue Growth (us)
CAGR 2013 - 2013

42.6%

BI INTELLIGENCE...
We Spend ~1 Hour Daily On Our Phones

Breakdown Of The Average Smartphone Owner's
Daily Time-Spend

On Average,  U. S. Sma...
We Also Spend 1/2 Hour On ATab| et Each Time We Use It

Average Minutes Spent Per Interaction By Device
50

45 43

BI INTH...
And More Time In Mobile Apps Than The Desktop
Computer

Source:  comscore

Digital Time Spent (u. s.)

Desktop

BI INTELLI...
SmartphoneTime-Spend Surpassed PC Time LastYear

Average Monthly Time Spent Per User

Smartphone Vs.  Desktop

40
__ 35 Us...
200

180 '

160

I-*
5
O

I-4
N
O

Ii
0
0

(Minutes Per Day)
00
O

40

20‘
0.

Source:  Flurry

And Mobile Just OvertookTV...
Plenty Of Room To Grow As Ad Spend Catches Up

2013 U. S. Ad Spending vs.  Consumer Time Spent
By Media
50%

45% 43%

40% ...
Ad Money Always Follows Audiences  Eventually

BUSINESS
INSIDER
Audiences Are Playing Games,  Browsing Facebook And
The Web

Time Spent On iOS And Android Connected Devices

Apps Vs.  Mo...
Mobile Web Search Is ~6o% Of Mobile Advertising

Global Mobile Advertising Revenue
By Format
$16,000

14,000
5 BI INTI'§I_...
Meaning  Google

Global Mobile Search Market Share

100%

90%

80%

BIINTEUJGENCE

70%

60%

50%

40%

30%

20%

10%

3” E...
Facebook Has Also Done Very Well

Facebook Revenue By Segment (Global) 
$3.5 I
$3.0

BI INTELLIGENCE ' $25
Payments And
Fe...
Where Are The Ad Dollars Going Next? 

INESS
IDER
Messaging And Chat Apps

The Messaging Wars — MAUs For Top Apps

(Monthly Active Users - Global)

600 ®

 
 
        

 I ...
Messaging And Social Are Growing 2X FasterThan All Apps

Mobile App Usage Growth By Category

2012-2013 YOY;  Global

250%...
Visual Social Networks

Top Photo Sharing Sites,  June 2014

Share Of Average Daily Photo Uploads Among Top 4 Sites

Flick...
Mobile Video Is Booming

Global Mobile Video Traffic Will Continue To Surge

  
  
 

Bl i. ‘. '”l H l l(, I?; *i‘(il-

Mil...
Almost HalfOfTV Audiences Use A Phone OrTab| et
While Watching

Pecentage Who Watch TV While Using A Second
Device

Ages 1...
Creating Opportunities For ‘2"" Screen Ads’

Daily Time Spent With Devices,  While Watching TV
Or Using The Device Indepen...
APPS

 

BUSINESS
Source:  Apple IN 5 I DER
App Growth Is Massive
Apple Did ~$1o Billion In App Revenue LastYear

Apple App Store Revenues

By Year

$1“'°°° BI INTELL...
Google is Raking In Mobile App Revenue Too

FORECAST:  Google Play Revenue (Global)

$16
$12 BI INTELLIGENCE 5113
§ $10 $9...
Developers Are Seeing Billions In Payouts

Estimated App Developer Payout

Apple App Store And Google Play

$12.0
BI INTEL...
Mostly From ‘Freemium'Apps That Are Free With ln-
App Purchases

Apple App Store and Google Play Revenue Share

By Monefiza...
Games Are Becoming Less Dominant In App Stores

Share Of Mobile App Revenue
(Including Ads,  Paid Downloads,  And In—App P...
Hit Games Are Still Cashing In
Kim Kardashian's Game Made $43M Last Quarter

Glu Mobile Quarterly Mobile Gaming Revenue

 ...
EMERGING DEVICES AND PLATFORMS

 

BUSINESS
Source:  Getty Images ‘N 5' D5 R
‘Wearable Computing’ Is In Its Infancy,  But Promising

Global Wearable Device Unit Shipments Forecast

Rest Of Wearables
...
Where Are We With Wearables?  Similar To Tablets In 2o11

User Adoption of Connected Devices In The US

30% Smartphone —Ta...
There Have Been Missteps Like Google Glass

would You Feel Comforable If Someone You Were
Interacting With Were Wearing Gl...
But Smartwatches Will Win,  Led By Apple Watch

Apple Watch Annual Shipments Forecast
2015-2020

BI INTELLIGENCE

Total Sm...
The Fitness Band Market Will Remain Niche

Fitness Band Hardware Annual Unit Sales
By Device Maker,  US Only

3,500

3,000...
Tens Of Million Of Cars Will Have Internet
Connections

Connected Car Unit Shipment Forecast

70,000

BI INTELLIGENCE
50,0...
We Spend Over An HourA Day In Cars

Average Daily Time Spent Per Person
U. S. Employed Citizens ages 25 to 54
24

Other 1....
Killer Car Apps?  Traffic,  Weather,  Music 

Estimated U. S. Market For Pandora In The Car

30,000
BI I NTEI. I.lG ENC I? ...
Traffic App Waze Has Seen Explosive Growth

Waze User Growth

90,000

80,000 " ’

BI INTELLIGENCE

70.000

8
8
O

U‘
53
8
C...
Piping Apps And Information To Drivers Will Be A Big
Business

€ 45,000

€ 40,000

€ 35,000

Connected Car Revenue Forecas...
The Home Automation Market Is Red-Hot

Global Connected Home Device Shipments

By Device Category
2,000
1,800
BI INTELLIGE...
Led By Popular Devices Like The Nest Thermostat 

Estimated Nest Thermostat Shipments

300,000

250,000
BI INTELLIGENCE 

...
And The Roomba Vacuuming Robot

The Incredible Rise Of The Roomba

iRobot's Cumulative Shipments Of Home Robots Since 2010...
TV Streaming Boxes Are Moving Millions Of Units

U. S. Number Of Streaming Devices Sold In 2013

BI INTELLIGENCE

l

0'5

...
By NextYear,  A Majority of US TVs Will Be Connected
BI INTELLIGENCE

US Households With Connected TV

80 62% 53%
SW  60%
...
SMARTPHONES AND TABLETS

T.  y
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l ip’~“'J
-. .av

r. ,. ’
— ml.  "
". .7“

 

BUSINESS
Source: AP INSIDER
Smartphones And Tablets Are Still Huge Device Markets

BUSINESS
INSIDER
~1 Billion Smartphones Shipped Globally LastYear

Global Smartphone Shipments By Vendor

BlackBerry
HTC

Other
Motorola
No...
~225 Million Tablets Shipped Globally LastYear

Global Tablet Shipments

By Vendor

BI INTELLIGENCE

2Q10 40.10 20.11 4Q11...
But iPhone Sales Growth Has Plummeted

60,000

iPhone Sales

Unit Sales

BI INTELLIGENCE

50,000

40,000

Unit Sales (Thou...
30,000

25,000

20,000

15,000

Unit Sale (Thousands)

10,000

5,000

Source:  Apple

And iPad Sales Have Nose-Dived

30.1...
What's Going On? 

BUSINESS
INSIDER
The Market Is Becoming Commoditized

Global Smartphone Average Selling Price
Forecast

$350

III INTIII I lGl'(‘l'

$300

...
As Opportunities Move To China And India

Smartphone Sales In 2014 Will Be Driven By New

Users In Emerging Markets
300

2...
China Already 3X The Size Of US At 33% Penetration

China/ U.S.  Smartphone Subscribers vs.  Penetration

S00 ” * 100%
450...
Phablets Are The New Consumer Favorite

Share Of Active Mobile Devices By Screen Size

' Small (< 3.5") I Medium (3.5-4.9"...
Overtaking Small Phones And Cannibalizing Tablets

2006 2008

Source:  8/ Intelligence Estimates

Global Annual Shipments ...
5 Chinese Vendors Account For 25% OfThe Global Market

Selected Local Manufacturers From China

Global Quarterly Smartphon...
In Particular,  Chinese Vendor Xiaomi Is On A Roll

Xiaomi Global Smartphone Sales . 

20 I L
18
16

14
BI INTELLIGENCE

(...
120%

100%

Time Spent Index
-5 Ch 00
O O C
$ X o°

20%

0%

Source:  Flurry

Xiaomi Owners Are Super Engaged

Time Spent ...
Samsung ls Being Squeezed
China Smartphone Shipments Market Share

Q3 2014

BI INTELLIGENCE

  

Source:  Canalys,  Bl Int...
Tablets Have Carved Out A Chunk Of PC Sales

Global Computer Shipments

180,000

160,000 — . 
140,000 BI INTELLIGENCE

120...
PC Vendors Are Struggling But Not Toast

Global PC Shipments By Manufacturer

100:000 iPad released -
Bl INTELLIGENCE  WIn...
BlackBerry Is Toast (As A Phone Maker)

BlackBerry Global Quarterly Shipments
16

14 iii Il‘~l'l‘i7l_l. iG§: NCl7
12

10

...
~85% Of Smartphones Sold Run Google's Android

Global Smartphone Market Share By Platform

100%
90%
Other 80%
(ll
* 70% 5
...
And ~65% OfTablets

Global Tablet Market Share

B Pl if
BlackBerry y 0 arm

100% Nook I Windows

90% Amazon

80%

70%

60%...
It's An Android World (~7o% Of All New Computing Devices)

Global Computing Platform Market Share
100%

90% Other

80% Bla...
It's Just Hard To Tell When Standing In The US (~5o%
Android)

US Smartphone Platform Market Share

100%
Other

90% Window...
MOBILE PAYMENTS AND BANKING

I-EU

Vtrfbrle

 

 

A payment terminal at Whole Foods.  BUSINESS

INSIDER
Old Payments Habits Are Fading.  Checks Are Dying

Forecast:  Check Transactions - US
Consumer,  business and government t...
Cash Is Fading

Forecast:  US Cash Transaction Volume
Consumer,  business and government transactions

$1,440

‘$1,418 We ...
Everyone’s Chasing The ‘Mobile Wallet’

US Consumer Preferences For Mobile Wallet

Providers

If a mobile wallet were avai...
In-Store Mobile Payments Will Grow 42X In
4Years

FORECAST:  US Mobile In-Store Payment Volume

5189 $200
l $180
$160

$14...
Tech Giants Want A Piece OfThe Pie

Payments Cards On File - Global
Apple,  Amazon,  PayPa|  And Braintree

Bl

INTELLIGEN...
Apple Pay Rocketed OffTo A Huge Start
FORECAST:  US Apple Pay Adoption

Number Of Active Apple Pay Credit Cards‘

80

71.4...
PayPa|  Already Powers $30 Billion In Mobile Payments

PayPaI Mobile Transaction Volume

(Including Brain tree 2013)

$35
...
Starbucks:  ~$1 Billion In Mobile Payments Last Quarter

Starbucks Mobile Payment Volume

US company-operated stores

 

s...
Popular Car-Hailing Apps Like Uber Could Easily Get
Into Payments

Payment Cards On File For Car-Hailing Apps

 

(Cumulat...
Person-To-Person Payment Apps Are Thriving

FORECAST:  US Mobile Peer-To-Peer Payments

BI INTELLIGENCE

$6
We Are Here / ...
NFC Has Won Out As An In-Store Payments Technology

Global NFC-Enabled Handset Shipments Forecast
1,400 I

1,200
Bl INTELL...
Thanks To Apple Pay (Which Uses NFC)

NFC Chip

V; 

IRAN .1

I‘ . ... . v
I . 
.1  nMrmc. n~. raw, m . -'. .r.  I

Bankol...
Mobile Banking Is Also Growing Strongly ~2o%YoY

Growth In Active Mobile Banking Customers
35%

 

 5 Bl INTELLIGENCE I 30...
Digital Is Reducing The Need For Branches

US Bank Branches*
In thousands
32 32 82 83 83 83
BllN"1“LL1_I(;1_= NCL 76 79
73...
People Can Deposit Checks On Mobile (Wasn't Possible
On PCs)

How American Adults Use Mobile Banking Apps

Check Balance S...
Bank Customers Love Doing That

Value Of Mobile Remote Check Deposit Services
Among Users And Non-Users In The U. S.

How ...
But There Is Room To Get More People Using Mobile
Banking Services

Mobile Remote Check Deposit
Service Awareness And Use ...
Many Are Still Attached To Physical Bank Branches

Top Channels For Selected Banking Activities
Percentage Of U. S. Consum...
70%

60%

50%

40%

30%

20%

10%

0%

Millennials,  Less So

Percent Of People Who Have A Positive Customer

Experience A...
Millennials Love Digital And Mobile Banking

North American Millennial Attitudes On Banking

Are active users of online ba...
They Are Also More LikelyTo Make Payments And Move

Money Online

Top Digital Banking Activities Among US Mi| lennials*

W...
Almost 1|n 5 Millennials Are ‘Mobile-Only’

Digital Platform Usage

By Age Group,  U. S. Only

Age 55+ 42% 55% 3%
Bl INTEL...
That's Why Banks Are Threatened By Tech Companies
Offering Financial Services

Attitudes Toward Banking With Non—Financia|...
lfYou Want To Know The Future Watch The Kids

Venmo Payment Volume
$800
$700

in
I
O
0

Bl INTELLIGENCE

in
03
O
O

V}
U1
...
Venmo Has Already Blown Past Starbucks In
Payments Volume

Mobile Transaction Volume — Venmo And Starbucks

United States ...
Millennials Love Using Apple's Fingerprint

ScannerTo Prove Their Identity

Authentication Preferences Among US Millennial...
MOBILE HEALTH

 

A mobile eye exam. 

BUSINESS
Source:  Peek INSIDER
‘Wellness’ Will Be The Top Category

General Fitness And Wellness Will Grow Faster In The

Next Five Years Than Other Mobi...
People Are More Interested In Medical Devices Than
Wearables Overall

Consumers Are Interested In Smart Medical Devices An...
Use Of Health And Fitness Apps Is Growing 2X Faster
Than Average

Average Daily App Usage Growth

Global i0$ Users,  Decem...
ThankYbu! 

BUSINESS
I N S I D ER
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Presentation about the Future of Mobile by Business Insider. One of the most comprehensive overviews of the state and future of Mobile

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Thefutureofmobile

  1. 1. The Future Of Mobile: 2014 Tony Danova BI Intelligence NESS DER
  2. 2. Is The Mobile Revolution Over? BUSINESS Source: Geekosystem [N 5 ' DER
  3. 3. Smartphones Are Everywhere 4 4 . . / 9 i / l_ I " ‘ A x’ ’—* ' E‘ 4 1 #7“ V’ . '4 BUSINESS Sources: Left, Bottom Right: Getty. Top right: Reuters. [N 5' D5 R
  4. 4. ‘Dvmbphones' Have Faded Global Mobile Phone Sales Smartphones / Bl lNTl? l.l. l(}l7.NCl7 Feature Phones 1Q08 30.08 1Q09 30.09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 Source: Gartner, IDC, Strategy Analytics, BI Intelligence Estimates 400 350 300 250 200 150 100 50 (Thousands) BUSINESS INSIDER
  5. 5. Global Tablet Growth Is Cratering Global Tablet Shipments Quarterly, Year-0ver- Year And Sequential Growth 300% 250% B1 lN’l“l€l. l.lC}l? NCil? 200% Year—Over—Year Growth 150% 100% 50% —_—— O%i' — —- -— -— e — ~ _50% - Sequential Growth -100% 30.10 1Q11 30.11 1Q12 30.12 1Q13 30.13 1Q14 3Q14 Source: IDC, Strategy Analytics, BI Intelligence Estimates BUSI N ESS INSIDER
  6. 6. Developed Mobile Markets Are Nearing Maturity U. S. Smartphone Penetration 80% 72% l o o° as o o° U1 0 § on o $ N o o° 18% (as a percentage of the mobile population) 8 8 o° o° ill Mal’: J! i la; 0% Jan 10 Jun 10 Nov 10 Apr 11 Sep 11 Feb 12 Jul 12 Dec 12 May 13 Oct 13 Mar 14 BUSINESS Source: comscore INSIDER
  7. 7. The Market Is Super Crowded THEN NOW BUSINESS Sources: Bottom Right, Channel Eye. All Others, Reuters. 1” 51 DER
  8. 8. So Is Mobile Over? U. S. Smartphone Market: Year-Over-Year Net Adds -5 O U0 U1 (N O Users Added (Millions) l) N) o U1 15 10 i‘ 5 0 ZQO8 40.08 20.09 4Q09 20.10 4Q10 20.11 4Q11 ZQIZ 40.12 20.13 4Q13 20.14 BUSINESS Source: comscore, Nielsen INSIDER
  9. 9. Depends WhatYou Mean By Mobile Lou ll Iuuuclnz THE I 73°" ; ,., |-_) y“. |, vow SYORES N 11031 iT| )r. ’‘mx! ]ork€‘nmrs flNas<l. u) , 1 um-uomav Faoeboolzis Profit Propelled by Mobile glvflt —a ‘V; 0- RT: Syncrhfsm BUSINESS INSIDER
  10. 10. The App Economy is Booming Estimated App Revenue Apple App Store Vs. Google Play Apple App Store 5200 B1 INTELLIGENCE Google Play (Billions) ‘U5 I-‘ U'| O $. 30.13 4Q13 10.14 20.14 3Ql4 Source: App Annie, Jana, BI Intelligence Estimates BUSI N ESS I N S I D E R
  11. 11. Mobile Revenue ls Moving Away From Hardware And Into Software/ Apps Share Of Combined Handset And App Revenues 2012-2016 I1 App Economy I Handset Market 2014 2015 2016 BI INTELLIGENCE BUSINESS INSIDER
  12. 12. Mobile Advertising Is Exploding FORECAST: Digital Advertising Revenue (us) BI INTELLIGENCE 530 S60 Mobile $50 We are here Billions Non—Mobi| e $20 2013 2014E 2015E 2016E 2017E 2018E BUSINESS Source: BI Intelligence Estimates, Interactive Advertising Bureau I N SI D E R
  13. 13. So Is Mobile Commerce Forecast: U. S. E-Commerce And Mobile Commerce $600 Bl INTELLIG ENCE E-commerce CAGR = 16% $500 %/ $400 2 Mobile Commerce o -9: U $300 g N 3 $200 Desktop E-Commerce $100 $0 2013 2014E 2015E 2016E 2017E 2018E BUSINESS INSIDER Source: BI Intelligence Estimates
  14. 14. Mobile Has Led To Huge Platforms With > 1 Billion Users Millions Of Users The World's Top Computing Platforms By User Numbers 1,600 1,400 1'2°° BI lN'l'IjLLlLiIiNL‘l_‘ 1,000 800 600 400 200 O 1985 1990 1995 2000 2005 2010 ‘Windows Android -iOS Mac “Facebook BUSINESS INSIDER
  15. 15. And Billions In Mobile Revenue Annual Ad Revenue From Mobile $14 $12 $10 Facebook E $8 ‘ .2 5‘. $6 $4 $2 Yahoo _ Twitter 5- 2011 2012 2013 2014E Source: Google, Facebook, Yahoo, Twitter, News Reports, BI Intelligence Estimates BUSINESS INSIDER
  16. 16. Social And Music Are Now Mostly Mobile Mobile Usage: Pandora, Twitter, Facebook 90% Pandora 80% 70% BI INTELLIGENCE Twitter , ..»«-C‘/ F’acebook 60% 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011 2012 2013 Bu5|NE5§ IN SI DE R Source: Company Filings
  17. 17. Mobile-First Media Companies Are More Valuable Than Some Traditional Media Selected Company Market Valuations Mobile-First Vs. Traditional Media $300,000 $239,297 BI INTELLIGENCE Combined Market Value $250,000 / Millennial Media Twitter Pandora $130,310 Combined Market Value $2O0’O00 g/ New York Times 1? ‘ Gannett 5 Viacom g $150,000 E Facebook Comcast $50,000 $0 Mobile First Traditional Media Bu5|NE55 INSIDER Source: Yahoo Finance, November 2014
  18. 18. Mobile ls Beginning To Disrupt Giant Industries, Like Payments FORECAST: US Mobile In-Store Payment Volume $189 $200 $180 IN III I ICII l'(‘I $160 L’. $140 E7 3 U5 We Are Here CAGR = 154% $120 3 2 5 3 2013 2014E 201SE 2016E 2017E 2018E BUSINESS Source: BI Intelligence IN 5' D E R
  19. 19. Banking Half Of Online Banking Customers Use Mobile Wells Fargo, Bank of America, and Chase* 2-Year CAGR Active online customers = 4.8% Active mobile customers = 25.2% III II‘ ii! I l(}’; *.. ‘(’i 100 KO C) 00 C) Online Ch I O 0 Millions U1 Q -I3 O LU O N O I-I Q 0 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 ‘Chart type is area. I I I‘ . ,I . Source: Wells Fargo, Bank Of America, Chase company filings BUSINESS INSIDER
  20. 20. And Health Average Daily App Usage Growth Global i0S Users, December 2013 - June 2014 70% ’ 62% aw o o° BI INTELLIGENCE Ln 3 o° A o $ 33% L» O o° Average Growth In Daily Sessions 8 $ 10% 0% I I Health And Fitness Apps Apps Overall Bu§| N|55§ I N S I D E R Source: Flurry
  21. 21. Mobile Is Shifting Online Business Models GrubHub/ Seamless Daily Average Grubs 181,200 40% 129,100 56% 65% 44% 35% Q1 2013 Q1 2014 Mobile Source: GrubHub Filings 174,500 36% 130,100 52% 61% 48% 39% Q2 2013 Q2 2014 Desktop BUSINESS INSIDER
  22. 22. New Devices Will Broaden What Mobile Means BUSINESS INSIDER Sources: Clockwise from left: Apple, Ferrari, Business Insider
  23. 23. "Mobile is over. I think it's just a screen. You'll absolutely need a screen, but you'll need more than one. ” — Matias Duarte, Android design head, April 2014. INESS IDER
  24. 24. Many People Will Use Five Screens Global Internet Connected Device Shipments 2,500 2,000 Wearablg Bl INTELLIGENCE SmartTVs 1,500,‘ Tablets 2 § 2 1,000 Smartphones 500 Personal Computers 0 0 ’- '12 '5 b- ‘o ‘o ’ ‘b °) 0 ’- ’» '5 ‘<2 0° 0° 0° 0° 0° 0° 0° 0° 0° 0° 0° 0° 0” 0° .0“ B, ,S, ,,, SS _ g _ l N S I D E R Source: Gartner, IDC, Strategy Analytics, Company Filings, BI Intelligence Estimates
  25. 25. Let's Look At Some OfThe Mobile Opportunities Individually BUSINESS INSIDER
  26. 26. MOBILE COMMERCE , S *. :l]'°l l : , i, J->, *' / — l | I . :.: .—. ‘ l 3% V i I I 0 fa‘ V x BUSINESS Source: Reuters IN SID E R
  27. 27. Mobile Commerce Dwarfs Other Areas Mobile Commerce Dominates Mobile Revenue Growth $600 $500 ‘ BI lNl‘lll, l<; }li‘(fl: $400 1.0% CAGR § $300 2013 3 2017 $200 $100 5- Mobile Enterprise Consumer Mobile Web Wearables Commerce Mobility Apps Ad Spend BUSINESS Source: Digi-Capital. Consumer Apps category includes advertising, paid download, and in-app revenue. I N S I D E R
  28. 28. Phones And Tablets At ~3o% Of E-Commerce Traffic Ecommerce Website Traffic Share By Device 100% " Smartphone 90% 80% Tablet 70% 60% 50% 40% PC 30% 20% 10% 0% 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 Source: Monetate BUSINESS IN S I D E R
  29. 29. Mobile is Carving Out A Share Of E-Commerce Sales US E-Commerce Sales BI INTELLIGENCE Billions 01- U‘)- -l> 0-: o o BUSINESS INSIDER Source: US Census, comscore, eMarketer, Deloitte, 8! Intelligence Estimates
  30. 30. And Growing Much FasterThan Traditional E- Commerce Mobile Commerce Is Growing Much Faster Than Desktop-Based Commerce (Year—over-Year, US) Bl INTELLICEENCE 88% M—Commerce lPC—Commerce 47% 43% 43% 2X 31% 31% 31% Faster 29% 27% 24% 22% 17% 16% 15% 17% 16% 16% fi 18% 14% 15% 19% 16% 14% l I l ' l i . I 10.12 2Q12 3Q12 4Q12 10.13 20.13 3Q13 4Q13 10.14 20.14 E3Q14 E4Q14 BUSI N ESS Source: US Census, comscore, BI Intelligence I N S I D ER
  31. 31. Online And Traditional Retailers Are Seeing Their Shoppers Go Mobile Monthly US Visitors Across Retail Websites Audience In Millions, Broken Down By Device Used .4 i O , . v 2:22:22! FS 161.7M 103.7M 61.2M 44.7M 30.2M 26.7M 24.1M 22.9M 21M Mobile Only I Desktop + Mobile 9% 9% 14% 10% 7% 23% 7% 9% 28% Desktop Only 50% 51% 479/ 38% 34% 42% 34% 39% 0 46% 'b"'° <3’ v$° o 9‘ , , _ , ,_ M _BUSlNESS A ' w ‘INSIDER Source: comscore, July 2014
  32. 32. Shoppers Spend Nearly As Much On Mobile Orders As They Do On Desktop Apple Users Are The Most Valuable Online Shoppers I Average Order Value 0 Conversion Rate $250 PCs Tablets $228 Smartphones xx ll ii ll xx xx ll xx ll xx 5: xi xx : l xx ll ll Mac Windows Linux iPad Android Kindle §EiPhone Android Windows: Tablet Fire ll Phone Phonel 4% Bl INTELLIGENCE source: Monetate, Statista; Q2 2014, Global BUSINESS I NSI DER
  33. 33. It's Not Just Apps Traditional Retailers Are Investing In Fast Mobile Websites Industry Average Cabelas Urban Outfitters Macys Barnes and Noble FootLocker Gamestop HSN Saks Fifth Avenue WiIIlams—Sonoma Target Best Buy Staples Wal-Mart Gap Rakuten Dell Newegg Overstock Lowes OfficeMax Home Depot Amway Walgreens Office Depot REI Costco Sears Source: Dynatrace j 7.083 7.023 _j 5.917 j 5.345 ‘ 5.475 _j 5.293 _‘ 5.155 ‘ 5.974 0 5.359 5.804 5.403 5.310 5.027 4.833 4.645 4.440 4.256 3.995 3.924 3.810 3.505 3.341 3.143 2.945 2.906 2.489 2.434 0.932 In Seconds l l Response Time Of Mobile Shopping Sites l. ‘lllll(. l‘<l BUSINESS INSIDER
  34. 34. Mobile Commerce is A Global Trend Alibaba vs. eBay (Q2 2014) Mobile Gross Merchandise Volume (5 Billions) Desktop. S55 Mobile, $27 33% Desktop, $14 Mobile, $6 30% Source: Alibaba, eBay, BI Intelligence Estimates BUSINESS INSIDER
  35. 35. MOBILE ADVERTISING Mark Zuckerberg’s Facebook has won big in mobile advertising. BUSINESS INSIDER
  36. 36. Now, Over 1/4 Of Internet Traffic ls Mobile Global Internet Traffic Share Desktop Vs. Mobile 100% 90% 80% 70% 0 5°‘ Bl INTELLIGENCE 50% 40% 30% 20% 10% 0% O0 O3 O5 01 C) C) C) "I ‘-4 Fl N (V N (Y) (O N‘) V V CP‘? ‘.". "‘. “'. "T“'. “'. “'. “'. "'. “'. "'. ‘*. “T"T‘". ' §§§°§3%§°§3%l%°§f%§°§§. °=. ‘°§§§° BUSINESS Source: $tatCaunter, BI Intelligence Estimates I N SI D E R
  37. 37. Mobile Has Extended The Digital Day B1 INTELLIGENCE TMobi| e Visits *'Desktop Visits 1,400,000 1, 200, ooo 1,000,000 800,000 600,000 400,000 2oo, ooo “Iv ’I« '14 fir ‘Iv '; §'v °'v '; 'v 5;» (av '59’ ~, "'§’~"’~"«, "'~}> o'* , o ». ~‘”> 49 . ;>'*‘* ; .""' '*°’ “>2 ‘P «v 5 9”" 9*” .9“ . ;» Source: Google Analytlol. Business Insider BUSINESS I N 51 DER
  38. 38. Mobile is The Only Media Time That Is Growing 50% 45% . 44% "4396 —42% 45% 40% 39% 37% 35% 30% 25% 20% 15% 10% 5% 0% TV Source: eMarketer, April 2014 US Consumer Media Consumption Share BI INTELLIGENCE 25%26%z6% 25% 23% 20% 20% 13% 17% 15% 15% 14% 12% 12% 11% 9x. 9% 3% 3% I 7% 7% 7% 5% 5% 6% 5% 4% 4% 4% 2% Online Radio Print Other Mobile 2009 2010 ' 2011 2012 2013 2014 BUSINESS INSIDER
  39. 39. And The Money Is Following U. S. Advertising BI INTEI_l. lCENCl*' $80 Offline All Other Online <a°’®“’<$‘<a“’°9o°o"'o"'o°’o"‘o‘°o‘°6‘o“’o‘°~9 ~9'~? "~5”'~‘P'~$”'»°'»°'x9'x9'»°'9'»° ° Source: IAB, U. S. Census Bureau, Stategy Analytics. Bl Intelligence estimates BUSINESS INSIDER
  40. 40. Mobile Will Be 15% Of US Ad Revenue In 2018 FORECAST: Advertising Revenue By Format (us) $250 BI INTELLIGENCE Desktop Display $200 Desktop V_i_c| _e_o__. _ T 7 7 7 7 Mobile Social $150 ‘ET Desktop Search § Other Non-Digital E Radio $100 Magazine Newspaper $50 TV $0 2013 2014E 2015E 2016E Source: Bl Intelligence Estimates, Interactive Advertising Bureau Other , 2017E Digital 2018E BUSINESS INSIDER
  41. 41. Mobile Is The Top Digital Ad Category For Growth Advertising Revenue Growth (us) CAGR 2013 - 2013 42.6% BI INTELLIGENCE 34_7% 35.7% 18.0% 15.1% -0.4% . . - at . «>°° . «>°“ at“ 55° <~*“"°° Q 09 Q‘, '56‘ 0Q Q 0 K ‘I5’ 25" 45 °°° 06° Q 00 Q Note: Formats overlap. Mobile includes all ad formats that appear on mobile. Source: BI Intelligence estimates based on data from BIA/ Kelsey, IAB, IDC, and Magna Global BUSINESS INSIDER
  42. 42. We Spend ~1 Hour Daily On Our Phones Breakdown Of The Average Smartphone Owner's Daily Time-Spend On Average, U. S. Smartphone Owners Spend 58 Minutes Daily On Their Phones ‘Lower 10% Text 21% Visit Websites { 15% Ix Z l ré I‘ 7 Z Talk. ’ f 28% Games .7.’ 9% (Social Networking 17% BUSINESS Source: Experian Marketing Services, May 2013 I N SI D E R
  43. 43. We Also Spend 1/2 Hour On ATab| et Each Time We Use It Average Minutes Spent Per Interaction By Device 50 45 43 BI INTH l l(}l'NCl: 40 39 35 30 30 25 Minutes 20 17 15 10 S 0 TV PC/ Laptop Tablet Smartphone Source: Google, August 2012 BUSINESS INSIDER
  44. 44. And More Time In Mobile Apps Than The Desktop Computer Source: comscore Digital Time Spent (u. s.) Desktop BI INTELLIGENCE 410 477 Jun-13 ' ‘ Mobile App V Mobile Web T? 621 481 Jun—14 1,400 1,200 1,000 800 600 400 200 Minutes In Billions BUSINESS INSIDER
  45. 45. SmartphoneTime-Spend Surpassed PC Time LastYear Average Monthly Time Spent Per User Smartphone Vs. Desktop 40 __ 35 Using Browser/ 34_17 gg Apps On A ' .5 Browsing The 27103 § 25 24:25 Internet On A 5 Computer E 20 E E 15 _ '5 4 l . E : , 10 0 2 5 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 BUSINESS Source: Nielsen [ N 5 | D E R
  46. 46. 200 180 ' 160 I-* 5 O I-4 N O Ii 0 0 (Minutes Per Day) 00 O 40 20‘ 0. Source: Flurry And Mobile Just OvertookTV Time Spent On Mobile Devices And TV 168 168 158 109 Q1 2012 US Daily Average (Minutes) 33 Mobile Devices I TV BI INTELLIGENCE Q1 2013 168 Q1 2014 177 168 162 Q3 2014 BUSINESS INSIDER
  47. 47. Plenty Of Room To Grow As Ad Spend Catches Up 2013 U. S. Ad Spending vs. Consumer Time Spent By Media 50% 45% 43% 40% 38% BI INTELLIGENCE 35% 30% 25% 25% 22% 20% 19% 20% 15% 12% 10% 10% 5% 5% 4% 0% PI’Il'lt TV Web Radio IVIOIDIIE gusnqggs I N S I D E R Source: Mary Meeker, IAB, eMarkerer
  48. 48. Ad Money Always Follows Audiences Eventually BUSINESS INSIDER
  49. 49. Audiences Are Playing Games, Browsing Facebook And The Web Time Spent On iOS And Android Connected Devices Apps Vs. Mobile Web, January-March 2014, U. S. Data Gaming, 32% Facebook, 17% Mobile Web, 14% Apps, 86% Twitter, 1.5% L Social Messaging, 9.5% YouTube, 4% Entertainment, 4% Utilities, 8% Productivity, 4% News, 3% / J Others, 3% BUSINESS Source: Flurry Analytics, Comscore, NetMarket$hare I N S I D E R
  50. 50. Mobile Web Search Is ~6o% Of Mobile Advertising Global Mobile Advertising Revenue By Format $16,000 14,000 5 BI INTI'§I_I, lGI§NCI? $12,000 Messaging $10,000 ' $3,000 Display (Millions) $6,000 $4,000 SEHIICII $0 T’: 2007 2008 2009 2010 2011 2012 2013 Source: IAB, Bl Intelligence Estimates BUSI N ESS I N S I D E R
  51. 51. Meaning Google Global Mobile Search Market Share 100% 90% 80% BIINTEUJGENCE 70% 60% 50% 40% 30% 20% 10% 3” E: «H . _m_>_ 2 08 , ma cam macs. macmee Nauwo Naamm Nags. ~H. me4 Hagan 2 «am Haas. Hacmg cacao oaaam cues. OH . _m_>_ 0% mouao moamm moss. mocmee mouwo BUSINESS INSIDER Google Yahoo! —bing Source: $tatCounter
  52. 52. Facebook Has Also Done Very Well Facebook Revenue By Segment (Global) $3.5 I $3.0 BI INTELLIGENCE ' $25 Payments And Fees 5 _ m N 2 0 E 31.5 5 Mobile Advertising $1.0 Advertising (Non- $05 Mobile) $0.0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 10 10 11 11 12 12 13 13 14 14 Source: Company Filings BUSI N ESS I N SI D E R
  53. 53. Where Are The Ad Dollars Going Next? INESS IDER
  54. 54. Messaging And Chat Apps The Messaging Wars — MAUs For Top Apps (Monthly Active Users - Global) 600 ® I s 1 A v‘ F‘ r‘ ‘ II. ‘ ILL Q 400 7: LINE -'WhatsApp -WeChat ‘ 'Snapchat £300 E MI 200 100 BUSI N ESS Source: Company statements, news reports, Bl Intelligence Estimates I N S I D E R
  55. 55. Messaging And Social Are Growing 2X FasterThan All Apps Mobile App Usage Growth By Category 2012-2013 YOY; Global 250% 203% 200% ’ ‘ 2 Bl INTELLIGENCE 3 149% g 150% V 2 to § 115% § 100% :2‘ 78% 77% ' ' 66% 49% 50% 0% Messaging & Uti| ities& App Usage Music, Media, Lifestyle & Games Sports, Health, News & Social Productivity Overall & Shopping & Fitness Magazines Entertainment BUSINESS Source: Flurry I N SI D E R
  56. 56. Visual Social Networks Top Photo Sharing Sites, June 2014 Share Of Average Daily Photo Uploads Among Top 4 Sites Flickr lnstagram 1% A 5% — ‘ Bl INTELLIGENCE Facebook 37% Snapchat 56% BUSINESS Source: 8/ lntelli ence 9 INSIDE R
  57. 57. Mobile Video Is Booming Global Mobile Video Traffic Will Continue To Surge Bl i. ‘. '”l H l l(, I?; *i‘(il- Millions of Terabytes Per Month We are here 1 2011 2012 2013 2014 2015 2016 2017 5 rm 2013 BUSINESS °“"°> '5 ' INSIDER
  58. 58. Almost HalfOfTV Audiences Use A Phone OrTab| et While Watching Pecentage Who Watch TV While Using A Second Device Ages 16 ~ 44, United States Only BI INTELLIGENCE Use A Second Device While Watching TV 41% Use One Device At A Time 59% BUSINESS Source: Millward Brown, 2014 I N SI D E R
  59. 59. Creating Opportunities For ‘2"" Screen Ads’ Daily Time Spent With Devices, While Watching TV Or Using The Device Independently 160 Ages 16 — 44, United States Only ~ Without TV I With TV l-* -D O I-l N O I-3 O O Time Spent In Minutes (Percentage Of Total Time) 00 O 60 83 4° (55%) 55 (63%) 20 20 (45%) O Smartphone Laptop Tablet Source: Millward Brown, 2014 BUSINESS INSIDER
  60. 60. APPS BUSINESS Source: Apple IN 5 I DER
  61. 61. App Growth Is Massive Apple Did ~$1o Billion In App Revenue LastYear Apple App Store Revenues By Year $1“'°°° BI INTELLIGENCE A $10,000 (millions 2008 2009 2010 2011 2012 2013 2014E BUSINESS Source: News Reports, Company Releases, BI Intelligence Estimates I N 5| D E R
  62. 62. Google is Raking In Mobile App Revenue Too FORECAST: Google Play Revenue (Global) $16 $12 BI INTELLIGENCE 5113 § $10 $9 8 C . E $7 8 ; $8 E $6 0 556 ' $4.4 $4 $2 $0 2014E 2015E 20155 2017E 2018E 2019E BUSINESS INSIDER Source: Credit Suisse
  63. 63. Developers Are Seeing Billions In Payouts Estimated App Developer Payout Apple App Store And Google Play $12.0 BI INTELLIG ENCE $10.0 $8.0 Google Play Tr? 5 5 $6 0 E $4.0 Apple App Store $2.0 $- 30.13 4Q13 10.14 20.14 3Q14 Source: App Annie, Jana, BI Intelligence Estimates BUSI N ESS INSIDER
  64. 64. Mostly From ‘Freemium'Apps That Are Free With ln- App Purchases Apple App Store and Google Play Revenue Share By Monefization Model Free with in-app purchases Paid ‘ Paid with in-app purchases 90% 12% 4% 6% 80% 11% 70% 60% 50% 92% 89% 93% 40% 77% 30% 20% 10% 0% January-13 November-13 January-13 November-13 Apple App Store Google Play Source: Distima I I BUSINESS IN S I D E R
  65. 65. Games Are Becoming Less Dominant In App Stores Share Of Mobile App Revenue (Including Ads, Paid Downloads, And In—App Purchases) 80% 70% 60% It 50% ff. ..‘ 40% t ‘Gaming A__ , -Non—Gaming 30% s .2 4* 20% BI INTELLIGIENCE 10% Share of App Store Revenues 0% 2013 2014 2015 2016 2017 Bus| NEss I N S I D E R Source: Digi-Capital
  66. 66. Hit Games Are Still Cashing In Kim Kardashian's Game Made $43M Last Quarter Glu Mobile Quarterly Mobile Gaming Revenue $70 ; '(, ... ... ;-aw’ L4 7 $50 0 :71 II‘! BI INTELLIGENCE ‘ : Kim Kardashian: $50 Hollywood 544-6 S “$2372” I 40.9 1: $40 ‘ ’ _§ $34.3 E $30 $24 6 $24.4 $21.7 $20 Other Game R 510 : ::*? :° $0 1Ql3 20.13 3Q13 4Q13 1Q14 20.14 3Q14 BUSINESS Source: Glu Mobile I N SI D E R
  67. 67. EMERGING DEVICES AND PLATFORMS BUSINESS Source: Getty Images ‘N 5' D5 R
  68. 68. ‘Wearable Computing’ Is In Its Infancy, But Promising Global Wearable Device Unit Shipments Forecast Rest Of Wearables Market 160 Fitness Bands And Other Activity Bl INTELLIGENCE Trackers 35% CAGR 2014-2019 ‘ 140 ’ 120 We Are Here Millions Of Units Shipped Annually
  69. 69. Where Are We With Wearables? Similar To Tablets In 2o11 User Adoption of Connected Devices In The US 30% Smartphone —Tab| et —Cars —Home/ Wearables , 71% 70‘V , , y y _ fl < V _ ° LEI ; N I I: LLI(; I;NC.5,: 65%s67% 70% 607 ‘ ° 56% 60% 59% 59% 50% 49% 46% 40% 43% 36% 38% 33% 33% 30% 30% 20% 10% 5% mmgrg, 6%_6% -5,; 5% 5% 5% 0% 2Q 3Q 40. 1Q 2Q 3Q 4Q 10. 30. 4Q 1Q 20. 3Q 4Q 10. 2Q 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2013 2013 2013 2013 2014 2014 Source: Nielsen BUSINESS INSIDER
  70. 70. There Have Been Missteps Like Google Glass would You Feel Comforable If Someone You Were Interacting With Were Wearing Glasses Like These? * BI IN TLLLIQLNCL Not Sure 19% Yes 28% NO 53% Source: YouGov, May 2013 ‘n = 1,000smartphone owners in US. BUSINESS Image: Google+ / Robert Scoble IN 5' D E R
  71. 71. But Smartwatches Will Win, Led By Apple Watch Apple Watch Annual Shipments Forecast 2015-2020 BI INTELLIGENCE Total Smartwatch Market We are here Apple Watch 2013 2014 2015E 2016E 2017E 2018E 2019E Source: Bl Intelligence Estimates 140 120 100 0'3 00 O 0 (Millions) -l> O 20 O ZOZOE BUSINESS INSIDER
  72. 72. The Fitness Band Market Will Remain Niche Fitness Band Hardware Annual Unit Sales By Device Maker, US Only 3,500 3,000 BI INTELLIGENCE ‘D E 0, 2,500 ‘O C (B M § 2.000 Other 5 Nike 37- Jawbone -4- o 1,500 K in ‘U S: 8 3 1,000 . C I- 500 Fitbit _ 7 4 2010-2011 2011-2012 2012-2013 2013-2014 Source: NPD Group, BI Intelligence Estimates, ‘ Annual Data From April Through March BUS I N E55 INSIDER
  73. 73. Tens Of Million Of Cars Will Have Internet Connections Connected Car Unit Shipment Forecast 70,000 BI INTELLIGENCE 50,000 -— 50,000 40,000 30,000 Unit Shipments (thousands) 20,000 10,000 0 2009A 2010A 2011A 2012A 2013E 2014!-I 201SE 2016E 2017E 2018E BUSINESS Source: SBD, GSMA I N S I D E R
  74. 74. We Spend Over An HourA Day In Cars Average Daily Time Spent Per Person U. S. Employed Citizens ages 25 to 54 24 Other 1.7 others I Household Work 1.1 hours Eating/ Drinking 1.1 hours I In The Car 12 hours Leisure And Sports 2.5 hours Sleeping 12 7.6 hours Working 8.8 hours 0 BUSINESS Source: Bureau Of Labor Statistics [ N S I D E R
  75. 75. Killer Car Apps? Traffic, Weather, Music Estimated U. S. Market For Pandora In The Car 30,000 BI I NTEI. I.lG ENC I? 25,000 ‘E 20,000 '2 $2 U. S. Connected Cars :1 .8 1: . % 15,000 U , . E “ E1‘ 1» 5 to . n E 3 2 10,000 Pandora U. S. 5:000 Connected Car Activations 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: News Reports, Company Statements, BI Intelligence Estimates BUSINESS INSIDER
  76. 76. Traffic App Waze Has Seen Explosive Growth Waze User Growth 90,000 80,000 " ’ BI INTELLIGENCE 70.000 8 8 O U‘ 53 8 C Thousands Of Registered Users .8 8 O 0-! .° 8 :3 20,000 10,000 “" 0 Jul-11 Jan-12 Jul-12 Oct-12 Jan-13 Feb-13 Jun-13 Dec-13‘ source: News Reports, Company Releases, ‘Bil Estimate BUSINESS INSIDER
  77. 77. Piping Apps And Information To Drivers Will Be A Big Business € 45,000 € 40,000 € 35,000 Connected Car Revenue Forecast Bi INTELLIGENCE € 30,000 ' € 25,000 (millions) € 20,000 € 15,000 € 10,000 € 5,000 €0 2009A 2010A Source: SBD, GSMA 2011A 2012A 2013E providers in-vehicle services 2014E 201SE Telecom service providers Telematics service 2016E Hardware 2017E 2018EBUSlNESS INSIDER
  78. 78. The Home Automation Market Is Red-Hot Global Connected Home Device Shipments By Device Category 2,000 1,800 BI INTELLIGENCE 1,600 Other Systems 1'400 1,200 A Smart Appliances g Y 1 000 = Smart Home ’ = Security E 800 We are here 500 400 Smart Home Energy 200 0 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E Source: ABI Research, TechNavia, Pike Research, BI Intelligence Estimates BU§| N E 5 5 INSIDER
  79. 79. Led By Popular Devices Like The Nest Thermostat Estimated Nest Thermostat Shipments 300,000 250,000 BI INTELLIGENCE 200,000 150,000 (Units Shipped) 100,000 50,000 0 4Q20l1 1Q2012 2Q2012 30.2012 40.2012 1Q2013 2Q2013 3Q2013 401013 1Q2014 Sources: Press Reports, Google, Morgan Stanley BUSI N ESS INSIDER
  80. 80. And The Roomba Vacuuming Robot The Incredible Rise Of The Roomba iRobot's Cumulative Shipments Of Home Robots Since 2010 7 6 I , , 5 x I m BI INTELLIGENCE , , 2,2: 3 4 -. . 0 § 3 Ié E 2 1 0 10.2010 30.2010 10.2011 30.2011 1Q2012 30.2012 1Q2013 30.2013 BUSINESS Source: iRobot calls Roomba vacuum cleaners its flagship product and revenue driver but shipment figures also include I N SI D E R Scooba and Bravo floor cleaners, gutter and pool cleaners, etc.
  81. 81. TV Streaming Boxes Are Moving Millions Of Units U. S. Number Of Streaming Devices Sold In 2013 BI INTELLIGENCE l 0'5 UI Millions Of Units 0-) 5 NJ 1 0. Apple TV Other Source: Hillside Partners, ‘BII Estimates BUSINESS I N 51 D ER
  82. 82. By NextYear, A Majority of US TVs Will Be Connected BI INTELLIGENCE US Households With Connected TV 80 62% 53% SW 60% We are here ° ‘” 70 53% (N 49% »~’**T/ /T , , 60 Tris» 50% § 50 38': /‘=4/T42 40% % E 7.. -5 «n 40 31%‘ O E 30% 55 § 30 24% E) O 35 20% E 9 20 '5 3 A E 1o°/ 3 10 ° 0 0% 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E BUSINESS INSIDER Source: Leichtman Research Group, Bl Intelligence Estimates
  83. 83. SMARTPHONES AND TABLETS T. y I , . l ip’~“'J -. .av r. ,. ’ — ml. " ". .7“ BUSINESS Source: AP INSIDER
  84. 84. Smartphones And Tablets Are Still Huge Device Markets BUSINESS INSIDER
  85. 85. ~1 Billion Smartphones Shipped Globally LastYear Global Smartphone Shipments By Vendor BlackBerry HTC Other Motorola Nokia i / ZTE / Coolpad I / ‘ LG . Apple BI INTELLIGENCE Samsung 350 300 250 200 150 100 50 20.08 4Q08 2Q09 4Q09 2Q10 4Q1O 20.11 4Q11 2Q12 40.12 2Q13 4Q13 20.14 (Millions) BUSINESS INSIDER
  86. 86. ~225 Million Tablets Shipped Globally LastYear Global Tablet Shipments By Vendor BI INTELLIGENCE 2Q10 40.10 20.11 4Q11 Source: IDC, Strategy Analytics, BI Intelligence Estimates Asus 2Q12 40.12 Acer Amazon Microsoft Lenovo LI . ..« Samsung Other Apple 2Q13 ‘, ~,‘ / 4Q13 2Q14 90 80 l O OH O -5 L11 o o (Millions) U) 0 N O 10 BUSINESS INSIDER
  87. 87. But iPhone Sales Growth Has Plummeted 60,000 iPhone Sales Unit Sales BI INTELLIGENCE 50,000 40,000 Unit Sales (Thousands) .3 O O O 20,000 10,000 3Q10 Source: Company Filings 1Q11 3Q11 1Q12 3Q12 YoY Growth 1Q13 3Q13 1Q14 3Q14 200% 180% 160% 140% 120% 100% YoY Sales Growth 80% 60% 40% 20% 0% BUSINESS INSIDER
  88. 88. 30,000 25,000 20,000 15,000 Unit Sale (Thousands) 10,000 5,000 Source: Apple And iPad Sales Have Nose-Dived 30.10 10.11 30.11 iPad Sales CUnit Sales 10.12 3Q12 YoY Growth BI INTELLIGENCE 10.13 30.13 1Q14 3Q14 200% 150% 100% YoY Sales Growth 50% 0% -50% BUSINESS INSIDER
  89. 89. What's Going On? BUSINESS INSIDER
  90. 90. The Market Is Becoming Commoditized Global Smartphone Average Selling Price Forecast $350 III INTIII I lGl'(‘l' $300 éfl l) U1 0 Average Selling Price ea N o C) $150 $100 2010A 2011A 2012A 2013E 2014E 2015E 2016E Source: BI Intelligence Estimates BUSINESS INSIDER
  91. 91. As Opportunities Move To China And India Smartphone Sales In 2014 Will Be Driven By New Users In Emerging Markets 300 250 BI INTELLIGENCE § Millions Of Smartphones D-l D-| 8 S Sales To New Smartphone Users In 2014 Smartphone Upgrades In 2014 Source: Mediacells via The Guardian BUSINESS INSIDER
  92. 92. China Already 3X The Size Of US At 33% Penetration China/ U.S. Smartphone Subscribers vs. Penetration S00 ” * 100% 450.4 450 90% 400 Bl INTELLIGENCE 80% A 350 70% 2 0 jg 300 60% *5 é ; % V‘! o _ E 250 “17% 504, .6 . -E C §2oo 40% =1’ ‘a’ 3'7 148.5 m 150 ° 30% 100 20% 50 10% O 0% China U. S. Source: Tomi Ahonen & Vision Mobile BU§| NE$§ ‘Note: Penetration Defined As Smartphone Owners As A Percentage 0}‘ Total Population [ N 5| D E R
  93. 93. Phablets Are The New Consumer Favorite Share Of Active Mobile Devices By Screen Size ' Small (< 3.5") I Medium (3.5-4.9") I Phablets (5.0-6.9") I Small Tablets (7.0-8.4“) -'7 Fu| |—Size Tablets (> 8.5") 100% ’ as ‘E r 7% i . Flax 90% 80% 70% 60% 50% ' 40% 30% 20% 10% 15% 12% 0% A I 2013 2014 '3 . .. IVW 1» . l»: ‘ Source: Flurry BUSINESS INSIDER
  94. 94. Overtaking Small Phones And Cannibalizing Tablets 2006 2008 Source: 8/ Intelligence Estimates Global Annual Shipments By Device _/ 2010 III’1‘ZEIsI. IGENCE? We are here 2012 2014E 2016E Phablets Smartphones (Non—Phab| et) Tablets 2018E 1,800 1,600 1,400 1,200 1,000 800 600 400 200 (Millions) BUSINESS INSIDER
  95. 95. 5 Chinese Vendors Account For 25% OfThe Global Market Selected Local Manufacturers From China Global Quarterly Smartphone Shipments IXiaomi IHuawei ILenovo IZTE ICoo| pad 90 80 BI INTELLIGENCE 70 60 (Millions) 50 40 30 20 ’10 I I I 0 1Q11 3Q11 1Q12 30.12 19,13 3Q13 1Q14 30,14 BUSINESS Sources: Canalys IDC, Strategy Anaytics Bl intelligence, Company Reports 1 N51 DER
  96. 96. In Particular, Chinese Vendor Xiaomi Is On A Roll Xiaomi Global Smartphone Sales . 20 I L 18 16 14 BI INTELLIGENCE (Millions) I-‘ I-‘ O N 2 O 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 30.14 Source: News Reports, Company Statements, BI Intelligence Estimates BUSI N E55 I N S I D E R
  97. 97. 120% 100% Time Spent Index -5 Ch 00 O O C $ X o° 20% 0% Source: Flurry Xiaomi Owners Are Super Engaged Time Spent In Apps By Average Chinese Users 100% Apple iPhone (Baseline) By Vendor, January 2014 107% Xiaomi 86% Samsung BI INTELLIGENCE 73% HTC 71% Other (Android) BUSINESS INSIDER
  98. 98. Samsung ls Being Squeezed China Smartphone Shipments Market Share Q3 2014 BI INTELLIGENCE Source: Canalys, Bl Intelligence Estimates BUSINESS INSIDER
  99. 99. Tablets Have Carved Out A Chunk Of PC Sales Global Computer Shipments 180,000 160,000 — . 140,000 BI INTELLIGENCE 120,000 r 100,000 Tablets 80,000 (thousands) 60,000 40,000 PC‘ 20,000 0 1Q08 3Q08 1Q09 3Q09 1Q10 30.10 1Q11 30.11 1Q12 3Q12 1Q13 30.13 1Q14 3Q14 Source: Gartner, IDC, Strategy Analytics company releases BUSI N ESS INSIDER
  100. 100. PC Vendors Are Struggling But Not Toast Global PC Shipments By Manufacturer 100:000 iPad released - Bl INTELLIGENCE WIndo<s8re| eased 90,000 80,000 70,000 1; 50,000 Other '5 E g 50,000 S 5 40,000 Acer 30,000 De" 20,000 HP 10,000 Lenovo O 1Q08 3Q08 1Q09 3Q09 1Q1O 3Q10 1Q11 3Q11 10.12 3Q12 1Q13 3Q13 1Q14 3Q14 Source: Gartner, IDC, BI Intelligence Estimates BUSINESS INSIDER
  101. 101. BlackBerry Is Toast (As A Phone Maker) BlackBerry Global Quarterly Shipments 16 14 iii Il‘~l'l‘i7l_l. iG§: NCl7 12 10 (Millions) O0 0 I Q1 2009 Q4 2009 Q3 2010 Q2 2011 Q1 2012 Q4 2012 Q3 2013 Q2 2014 Source: Gartner, Company Reportings BUS] N E 55 I N S I D E R
  102. 102. ~85% Of Smartphones Sold Run Google's Android Global Smartphone Market Share By Platform 100% 90% Other 80% (ll * 70% 5 iOS E 60% 50% 5 BlackBerry 3 40% 8 Android “5 0 Microsoft 30/’ g . C 20% "’ 10% 0% 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 ource trategy na ytrcs nte igence snmates BUSINESS 5 : lDC, S A I ', BII II' E ‘ INSIDER
  103. 103. And ~65% OfTablets Global Tablet Market Share B Pl if BlackBerry y 0 arm 100% Nook I Windows 90% Amazon 80% 70% 60% Apple 50% 40% 30% Android 20% 10% 0% 3Q10 10.11 3Q11 1Q12 3Q12 1Q13 30.13 10.14 3Ql4 Source: BI Intelligence Estimates BUSI N E 55 I N S I D E R
  104. 104. It's An Android World (~7o% Of All New Computing Devices) Global Computing Platform Market Share 100% 90% Other 80% BlackBerry 70% Apple 60% 50% Windows 40% 30% Android 10% 0% 1Q09 3Q09 10.10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 BUSINESS $ource: Gartner, IDC, State Anal tics, Com an Film 5, Bllntelli ence Estimates 9” V ” y 9 9 INSIDER
  105. 105. It's Just Hard To Tell When Standing In The US (~5o% Android) US Smartphone Platform Market Share 100% Other 90% Windows Phone 80% BlackBerry 70% 60% Apple 50% 40% 30% Android 20% 10% 0% Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 r I . - . . 2 ‘ BUSINESS Source: comscore I N S I D E R
  106. 106. MOBILE PAYMENTS AND BANKING I-EU Vtrfbrle A payment terminal at Whole Foods. BUSINESS INSIDER
  107. 107. Old Payments Habits Are Fading. Checks Are Dying Forecast: Check Transactions - US Consumer, business and government transactions We Are Here 18 '16 I I’ 16 CAGR = -10.8% 12 on 5-'9lI°G JO 5U°! ll!9 0'8 -5 2013E 2014E 2015E 2016E 2017E 2018E BUSINESS Source: Federal Reserve, Bl Intelligence I N s I D E R
  108. 108. Cash Is Fading Forecast: US Cash Transaction Volume Consumer, business and government transactions $1,440 ‘$1,418 We Are Here $1,420 CAGR = -1.1% a $1,400 $1,380 $1,360 5-‘EH00 JO 5“°! Il! fl $1,340 $1,320 $1,300 2013E 2014E 2015E 2016E 2017E 2018E Source: Federal Reserve, BI Intelligence BUSINESS INSIDER
  109. 109. Everyone’s Chasing The ‘Mobile Wallet’ US Consumer Preferences For Mobile Wallet Providers If a mobile wallet were available from each of the following companies, whose mobile wallet would you be most likely to use? Your Current Bank PayPal Visa Chase MasterCard Bank Of America American Express Wells Fargo Discover Google Apple Verizon AT&T Facebook Citi Groupon (Intuit, Square, Isis, Or VeriFone) Source: Wedbush Securities, Inc. September 2013 5% S96 5% 5% 4% 3% .396 3%, 2% 2% 11% 1% 12% .1696, 2291; BUSINESS INSIDER
  110. 110. In-Store Mobile Payments Will Grow 42X In 4Years FORECAST: US Mobile In-Store Payment Volume 5189 $200 l $180 $160 $140 Bl INTELLIGENCE We Are Here CAGR = 154% 5120 $100 S-l9|| °G IO 5U°! ||!9 $20 $0 2013 2014E 2015E 2016E 2017E 2018E 51.8 Source: Bl In telligence BUSINESS IN S I D E R
  111. 111. Tech Giants Want A Piece OfThe Pie Payments Cards On File - Global Apple, Amazon, PayPa| And Braintree Bl INTELLIGENCE 010305030000:-Ir1rI—IN C. ’C. ’°. C."'. "'. "'. "'. "'. "'. “'. "'. "'. ' cL—4-I: L.—4ucL—¢-ac Q30 Q_3U Q_3U i-°<“o3<"‘o2<"'o3 ‘Apple = iTunes accounts. dashed line indicates BI Intelligence estimate. "Amazon = Accounts used to make a purchase in the last year. ”*PayPaI = accounts that either sent or received a payment in the last quarter. ' " ‘Braintree = Cards on file for single Apr-12 I Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 600 500 400 300 200 100 Millions Of Accounts BUSINESS INSIDER
  112. 112. Apple Pay Rocketed OffTo A Huge Start FORECAST: US Apple Pay Adoption Number Of Active Apple Pay Credit Cards‘ 80 71.4‘ 70 60 (Millions) U0 4:- O O N 0 Bl lNTIZLl. lGljNCIf I-‘ C 0 ‘First 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 3 Days Months After Launch Source: Bl Intelligence Estimates; Based On Rate Of 330,000 Credit Cards Activated Daily After First Weekend Launch BUSI N ESS I N S I D E R
  113. 113. PayPa| Already Powers $30 Billion In Mobile Payments PayPaI Mobile Transaction Volume (Including Brain tree 2013) $35 $30 » ‘xl lN’l'[§l. l.| Gl{NCli BramtreeM°b“e. $25 —— $20 - PayPa| Mobile $15 - V U. S. Dollars In Billions $10 so 2008 2009 2010 2011 2012 2013 *PayPaI counted a small portion of BraIntree‘s transaction volume as Its own in the last 12 days of Q4 2013. Source: PayPaI BUSINESS INSIDER
  114. 114. Starbucks: ~$1 Billion In Mobile Payments Last Quarter Starbucks Mobile Payment Volume US company-operated stores sssrilllg $302 / $2533 $222 $155,; /// /I Iii Ii‘~ISl‘l{l_l. lGl}iJ(, flL Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Source: Starbucks statements and filings, BI Intelligence $0 $Mi| lions BUSINESS INSIDER
  115. 115. Popular Car-Hailing Apps Like Uber Could Easily Get Into Payments Payment Cards On File For Car-Hailing Apps (Cumulative) 25,000,000 ‘Uber -Lyft —Hai| o 20,000,000 I‘ 1 L 1:; 2 3: I: 15,000,000 0 V! E 3 11 3 Iv‘ lID7l E E 5 10,000,000 9. 5,000,000 0 05° Q: »° “'9 ,3? 0:? ’ Q5," c'»'‘' ,5? «'3 #0 0,9’ ‘:3’ <5,” q; C" C” ,5“ 4’ Q5?‘ xx) so 00, ’b V) 5?. 0% '1) o (10 Q2 '0 V) 59, oz ‘D V) 812, ‘E ‘E ¢ ‘E BUSINESS INSIDER Source: BI Intelligence Estimates
  116. 116. Person-To-Person Payment Apps Are Thriving FORECAST: US Mobile Peer-To-Peer Payments BI INTELLIGENCE $6 We Are Here / 55° CAGR = 68.7% E Billions Of US Dollars $10 $5 2013 2014E 2015E 2016E 2017E 2018E BUSINESS Source: Bl Intelligence [N 5| D E R
  117. 117. NFC Has Won Out As An In-Store Payments Technology Global NFC-Enabled Handset Shipments Forecast 1,400 I 1,200 Bl INTELLIGENCE J" c: c> c: 800 We are here 600 Millions Of Handsets Shipped 400 200 0 2012 2013 2014E 2015E 2016E 2017E 2018E Source: IHS 2014 BUSINESS INSIDER
  118. 118. Thanks To Apple Pay (Which Uses NFC) NFC Chip V; IRAN .1 I‘ . ... . v I . .1 nMrmc. n~. raw, m . -'. .r. I Bankolmnerica ‘Q’? ‘§! l‘. !I? a“k' BUSINESS INSIDER
  119. 119. Mobile Banking Is Also Growing Strongly ~2o%YoY Growth In Active Mobile Banking Customers 35% 5 Bl INTELLIGENCE I 30% 25% 20% 17% 15% % Growth 10% 5% Wells Fargo Bank Of America -‘Chase 0% Q2 2013 Q4 2013 Q2 2014 BUSINESS _ _ I N S I D E R Source: Company Filings
  120. 120. Digital Is Reducing The Need For Branches US Bank Branches* In thousands 32 32 82 83 83 83 BllN"1“LL1_I(;1_= NCL 76 79 73 68 7o 64 55 55 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: FDIC ‘The term ‘bank’ is used as a proxy for the FDIC '5 term 'commercial banks’ BUSI N £55 I N S I D E R
  121. 121. People Can Deposit Checks On Mobile (Wasn't Possible On PCs) How American Adults Use Mobile Banking Apps Check Balance Statement 81% 49% 38% 9 48% Transfer Funds Between Accounts Mobile Check Deposit Pay Bills Receive Alerts 33% Find A Branch Or ATM 17% BI INTELLIGENCE Send Money To Friends And Other Contacts 11% l l l I l 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% BUSI N ESS Source: Bank ofAmerica, Trends In Consumer Mobility Report 2014 I N S] D ER
  122. 122. Bank Customers Love Doing That Value Of Mobile Remote Check Deposit Services Among Users And Non-Users In The U. S. How valuable are remote check deposit services to you? I—‘ C Q o° 90% BI INTELLIGENCE 80% r 70% I Somewhat Valuable I Very Valuable 60% 50% 40% 30% 20% " Percent Of Respondents who Found Remote Check Deposit Services. .. 10% 0% Users Non-Users 305N555 Source: Synergistic: 2014 INSIDER
  123. 123. But There Is Room To Get More People Using Mobile Banking Services Mobile Remote Check Deposit Service Awareness And Use In The U. S. Are you aware/ Do you use mobile remote check deposit services? 80% 70% 68% 60% I it 50% 40% g4vPo-nt Gap 30% Percent Of Respondents Who Answered Affirmatively 20% 14% 10% 0% Awa re Use m§'lT3EES, § Source: Synergistics 2014
  124. 124. Many Are Still Attached To Physical Bank Branches Top Channels For Selected Banking Activities Percentage Of U. S. Consumer Households Who. .. l’>l ll'l'l? l,l l(}l’_l. '(‘l: 77% 75% E 60% 38% 19% Prefer Checking Prefer Paying Bills Prefer Making Prefer Prefer Resolving Balances Via Online Deposits At A Withdrawing Issues At A Call Mobile Branch Cash At An ATM Center BUSINESS , l N S I D E R Source: Nielsen 2014
  125. 125. 70% 60% 50% 40% 30% 20% 10% 0% Millennials, Less So Percent Of People Who Have A Positive Customer Experience At Their Retail Bank 63% 46% 42%‘ 39%‘ North America Latin America ‘i% 32%; Western Europe Millennials BI INTELLIGENCE 41% 32%[ Central Europe ' ‘ Others Source: Capgemini Financial Services Analysis 2014, 2014 Retail Banking Voice Of The Consumer Survey 39% 31% 35% 28? Middle East & Asia-Pacific Africa BUSINESS INSIDER
  126. 126. Millennials Love Digital And Mobile Banking North American Millennial Attitudes On Banking Are active users of online banking Are active users of mobile banking 72% Would be likely to bank with non-financial services companies with which they do business 72% Feel the traditional and digital experience they receive from their bank is somewhat or not at all seamless 67% Would consider using a branchless digital bank 39% 0% 20% 40% 60% 80% Source: Accenture, The Digital Disruption In Banking 2014 94% 100% BUSINESS INSIDER
  127. 127. They Are Also More LikelyTo Make Payments And Move Money Online Top Digital Banking Activities Among US Mi| lennials* What was the purpose of your recent online/ mobile banking activity? Checking balances or activity Paying bills Transferring money Seeking info Resolving an issue or dispute Making another type of transaction Opening or closing an account Seeking advice 0% ‘Millennials are defined as people 18-34 years of age. Source: TD Bank, The Millennial 2014 14% 12% 11% 11% 9% 20% 40% l ) 3 57% 56% I‘ ll l l l(il”N(fl5 60% 80% 84% 100% BUSINESS INSIDER
  128. 128. Almost 1|n 5 Millennials Are ‘Mobile-Only’ Digital Platform Usage By Age Group, U. S. Only Age 55+ 42% 55% 3% Bl INTELLIG ENCE Age 35-54 20% 75% 5% Age 18-34 15% 57% 13% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Desktop Only Desktop + Mobile Mobile Only BUSINESS Source: comscore INSIDER
  129. 129. That's Why Banks Are Threatened By Tech Companies Offering Financial Services Attitudes Toward Banking With Non—Financia| Institutions — North America if these companies offered banking services, how likely would you be to bank withthem? 60% E F BI INTELLIGENCE amazon 50% U’! ‘E $ 41% . i> o $ us: 0 $ 26% % Of Customers Who Would Likely Bank At. .. 0% Square PayPal Apple Google Amazon BUSINESS . . INSIDER Source: Accenture, The Digital Disruption In Banking 2014 ‘ ‘
  130. 130. lfYou Want To Know The Future Watch The Kids Venmo Payment Volume $800 $700 in I O 0 Bl INTELLIGENCE in 03 O O V} U1 0 0 $468 Millions Of Dollars V1» 'U- uu A O O O 0 $200 $141 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 BUS I N ESS Source: PayPaI, Bl Intelligence I N SI D E R
  131. 131. Venmo Has Already Blown Past Starbucks In Payments Volume Mobile Transaction Volume — Venmo And Starbucks United States payment volume in millions (“$0 $700 rfl BI INTELLIGENCE .3?’ $517 $4e3* $413 $314 $346 1 $314* $239 $275 5204 $194 $145 $141 $59 $81 $105 o42o12 Q22013 Q42013 Q22014 BUgNE% ”*eP°"*" _ _ _ INSIDER Source: Starbucks And Braintree Statements, Bl Intelligence Estimates
  132. 132. Millennials Love Using Apple's Fingerprint ScannerTo Prove Their Identity Authentication Preferences Among US Millennials For security/ authentication which of the following would you prefer to use instead of typing a password? 50%59% 41% BI INTELLIGENCE 36%; ’ 27%25% 25% S’ ‘ 21% 13%12% 3% 5% Facial Fingerprint Voice Signature Other Not Sure Recognition Scan Recognition Validation Ages 18-34 Ages 18-24 Source: Zogby Analytics BUSINESS INSIDER
  133. 133. MOBILE HEALTH A mobile eye exam. BUSINESS Source: Peek INSIDER
  134. 134. ‘Wellness’ Will Be The Top Category General Fitness And Wellness Will Grow Faster In The Next Five Years Than Other Mobile Health Categories 40% 37% 35% Bl INTELLIGENCE 30% 25% 25% 22% 20% 15% 10% Compound Annual Growth Rate To 2018 5% 0% Mobile Fitness And Wellness Mobile lndepent Aging Mobile Cardiac Monitor REVENUES REVENUES BUSINESS Source: MarketsandMarkets I N 5| D E R
  135. 135. People Are More Interested In Medical Devices Than Wearables Overall Consumers Are Interested In Smart Medical Devices And Wristwea r Medical Devices That Transmit Data US Sensor-Enabled Wristwear __ Z —I I'. "I I"‘ I— C Headset/ Eyeglasses F71 / L K‘ Tech-Sensitive Textiles And Clothing 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Source: Bloomberg West/ Sun/ eyMonkey BUSINESS INSIDER
  136. 136. Use Of Health And Fitness Apps Is Growing 2X Faster Than Average Average Daily App Usage Growth Global i0$ Users, December 2013 » June 2014 70% 62% cu O X BI INTELLIGENCE U1 O § -5 o x 33% Average Growth In Daily Sessions N w o o o° ¥ I-l o o° 0% S Health And Fitness Apps Apps Overall BUSINESS IN SI DER Source: Flurry
  137. 137. ThankYbu! BUSINESS I N S I D ER

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