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How’s it all going?
Whoa can you believe that half of 2019 has flown by? Seriously, feels like I’m aging every day…
How’s those New Year’s resolutions going?
Unfortunately haven’t achieved mine yet… but hey, there’s still another 6 months to do it right!
Continuing on the tech theme of recent posts, this week I had the privilege of reading the highly anticipated annual “Internet Trends Report” from Mary Meeker.
Mary is one of the most closely followed Internet and Tech investors out there, having started her career on Wall Street as an analyst, and first covered internet based stocks in the mid-90’s.
She is sometimes referred to as the “Queen of the Internet” and needless to say, is widely respected.
Each year she produces a report on, well, the Internet. Here’s some of the highlights from this year:
Some 3.8 billion people, or 51% of global population were internet users last year, up from 49 percent (3.6 billion) in 2017.
Growth slowed to about 6 percent in 2018 because so many people have come online that new users are harder to come by.
Sales of smartphones are declining (by 4%) as whoever is able to access the internet, already is.
53% of the world’s internet users are located in the Asia-Pacific region, with China being the largest with over 800 million users.
You can also see that emerging markets still significantly lag more developed economies in terms of their use of the internet.
As they become progressively wealthier, investors identifying technology and digital media companies that can capitalize on their growth, might prove a lucrative exercise in the long term.
The rapid growth of technology and the internet since the turn of the century has resulted in 7 of the top 10 largest companies in the world coming from the sector.
Globally, US tech companies dominate the landscape with the rest of the world playing catch-up. 18 of the largest 30 global tech companies (with exposure to the internet) are in the USA but the emergence of some non-USA powerhouses, particularly out of China, suggests that the tide may be slowly changing.
Future company trends
Meeker’s report also highlights that the tech giants are finding it harder to maintain the growth rates of recent years.
The astronomical returns the tech sector has provided in the last twenty years may not be as easy to achieve going forward, with investors likely requiring a more selective approach to investment.
For example, there was a time when Google and Facebook were undisputed kings of the online ad revenue world but the growth of other USA advertising platforms such as Amazon, Twitter, Snapchat and Pinterest has begun to outstrip the big players.
Google’s ad revenue grew by 1.4 times over the past 9 quarters and Facebook’s grew 1.9 times, whilst the combined group of the new players grew 2.6 times.
Though it is pleasing to see that innovation at tech companies outside the US has remained robust.
Popular areas of growth include fulfillment, delivery, and payments.
Meeker’s research indicates our American cousins are spending 6.3 hours a day on the internet and increasingly that time is being spent on mobile devices or set-top boxes that allow them to access digital media content.
26% of US adults consider themselves online “almost constantly.” That number jumps to 39% for 18 to 29 year-olds surveyed.
I think it’s very important to understand what future internet trends belie, not just in terms of investing but also in terms of the general direction the world is heading towards.
As the Meeker report states, everything and everyone is becoming more and more connected.
It’s amazing that I was born in a time when the internet was just a plot-line for a radical sci-fi movie, and now look where we are!
Hope you enjoyed this post, and of course if you want to check out her full 333 page presentation, you can do so here (link).
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