Mary Meeker has her annual Internet Trends report up. It instantly made me think of Amazon releasing a Kindle Phone, and perhaps even a Kindle Watch.
Basically, Mary Meeker points out some amazing things -
- There are 2.4 billion Global Internet users. US has 78% population penetration. On the other hand, China has just 48% population penetration and India has a measly 11% population penetration. Amazon obviously recognizes this as it’s made Kindle Fire HD and its App Store available in China. It even added support for paid apps in China before Google did.
- The population penetration of the Top 14 Markets is just 34%. That suggests a doubling in the number of people who have Internet access isn’t inconceivable. The new growth is likely to come from smart phones and phones and tablets.
- Mobile OSes made in the US (Android, iOS, Windows Phone) have 88% market share. Six years ago they had 5% market share.
- The Mobile Market is so big that Amazon has to get into it. Kindle Phone isn’t an IF, it’s a WHEN.
- The rate at which companies and businesses can grow is unprecedented. What does that mean for Kindle? That a hit Kindle Phone or a hit Kindle Watch could reach tens of millions of users really fast. Perhaps even cross 100 million users in their first 2 years of existence.
- Mobile Traffic is 15% of Total Internet Traffic. In China, the percentage of users accessing the Internet via their phone or smart phone is LARGER than the percentage accessing the Internet via their PC.
- 45% of Groupon’s Transactions are via Mobile.
- There are 1.5 billion smart phone subscribers worldwide. China is the largest market by number of users. US is second.
- Smartphone penetration is just 21%. That’s a great opportunity for Amazon. Kindle Phone has 79% of the market that hasn’t even bought a smart phone yet. There are 1.5 billion smart phone users and 5 billion mobile phone users. So, it’s a GIANT market that’s going to grow A LOT (3-4 times).
- Apple is growing at 1.4 times (It now has 22% market share). Samsung has grown 7 times in the last 2 years (it has 29% market share). Amazon with Kindle Phone is starting off at zero market share. It could take off and could capture a large part of the market. The smart phone market itself has grown from 55 million units in Q1, 2010 to 219 million units in Q4, 2012 (4 times).
- Kindle Watch would be an opportunity to move from smartphones to wearable computing. And that would be a new market. There would be competitors (Google, pretty sure Apple has something for end 2013, Microsoft, Samsung). However, if Kindle Watch comes out by 2014 then it has a shot at being a market leader.
- Tablets are growing faster than smartphones. iPad sold at 3 times the rate of iPhone. Note: This is an unfair comparison in some ways. iPad rode on the App Store and the branding and the customer base that iPhone created.
- 3 years after introduction, Tablets, in Q4 2012, sold more than desktops and laptops (separately, not combined).
- Kindle Fire HD is a hit. Tablet Market Share, according to Mary Meeker, is – iPad at 51%, Samsung at 13%, Amazon at 8%, Asus at 5%.
- Mary Meeker thinks the third cycle (after Smartphones and Tablets) will be Wearables (and Drivables and Flyables and Scannables).
- Smartphone users check their phones 150 times a day. Wow! That figure seems absurdly high.
- A lot about wearable computing. It’s very difficult to take out incumbents. Much easier to create a new market and/or to establish yourself as one of the leaders in an emerging market. That’s why a ‘Kindle Watch’ or ‘Kindle Goggles’ would have a much higher chance of success than a Kindle Phone. The downside is that the wearable computing marketing might never become very big.
- Mary Meeker thinks we have a lot to learn from China. She also thinks that China is pointing to what the future of computing will be. Well, everyone’s paying attention. The sheer size of the Chinese market makes it hard to ignore.
The incredible strength of Mobile, the incredible growth of Mobile (which is continuing), and the huge market (billions of users), mean that Amazon has to make a Kindle Phone. It just doesn’t have any other option.
The exceedingly fast rate at which things take off, in our new world, means that Amazon just has to get things right once. If it does, it could displace the existing incumbents in the Phone and/or Tablet markets in just a few years. 7 years ago, neither Android nor iPhone had significant market share. Tablets didn’t really exist 3.25 years ago.
If Amazon can create a new niche, and use that to displace Tablets and/or smartphones, that would be the most elegant path forwared. Unfortunately, it seems like Apple and Google will perhaps release wearable computing devices first.
Kindle Phone – Chances of Amazon releasing a Kindle Phone, When it would arrive, Pros of releasing Kindle Phone
Well, let’s see -
- Kindle Phone Probability – 100%.
- Arrival – See my Kindle Phone Release Date post.
- Pros – Market is absolutely huge. Lots of opportunity to disrupt the existing players. Market that tends to cycle through leaders (remember RIMM, Nokia, Motorola). Trends based Market and therefore easier to capture (comparatively). Amazon already has a huge customer base in the US (the second most important smart phone market). Amazon already has an App Store.
- Cons – Well entrenched competitors (but Market shifts a lot). Apple has very strong customer loyalty. Samsung is very dangerous and very flexible. Amazon doesn’t have a good OS (it just skins Android) limiting differentiability. Hardware isn’t exactly Amazon’s strong suit.
Kindle Phone would be the logical successor to eInk Kindles and Kindle Tablets. Perhaps the third time’s the charm. Perhaps Amazon really blows away everyone with the Kindle Phone.
Kindle Watch – Chances of Amazon releasing a Kindle Watch, When it would Arrive, Pros of releasing Kindle Watch
Well, this is more difficult.
- Kindle Watch Probability – 100% if iWatch and/or SWatch (Samsung) and/or Google Glass take off. 25% otherwise. Amazon might wait to see how wearable computing does, before jumping in.
- Arrival – Perhaps end of 2014. Perhaps end of 2015. On the one hand, Amazon likes to wait and see. So it might wait to get a year’s worth of data on wearable computing sales. On the other hand, Amazon knows that being too late to the market makes things really difficult. Amazon might gamble on wearable computing sooner rather than later. I’d predict Amazon is cautious and Kindle Watch ships in early 2015.
- Pros – Brand New Market. No one has released anything yet. If Amazon can release by November 2014, it’ll be just 6 to 12 months late to the party. Amazon is gathering hardware customers and a lot of these will give Kindle Watch a chance.
- Cons – No one know if the market for wearable computing will take off. There will be an incredible amount of competition.
Kindle Watch would be more of a gamble. But it’s a gamble worth making. Perhaps even more so than Kindle Phone.