5 - Atmosphere: The Mobile Internet


Uploaded by eventsatgoogle on 12.04.2010

Transcript:
>> HARDY: Welcome back. Hope your lunch was good. And while people are drifting in, I
just want to introduce Mary Meeker. You are about to meet something rare and wonderful.
Mary Meeker is a Wall Street legend in a really good way, which is not always the case these
days. But Mary's managing director of Morgan Stanley, leading the firm's global technology
research team. That really undercuts her magnitude. She's known for her clarity of visions, seeing
things early. The net, mobile, you name it. And the integrity of her work. She's gonna
give a very data-rich presentation now with some startling and compelling points about
where the mobile internet is going. Expect a data pact view around use, around consumption,
around behavioral changes. You may find it is about consumer behavior to some extent,
but bear in mind what we were saying this morning, how much of the consumer behavior
comes to inflect what goes on in the business world and what you'll be working with the
next couple of years. Mary? [pause] >> MEEKER: Thank you. The-- I just want to
say, if Google can make its products as efficient and as good as that lunch was, that's all
a--that's all a really good thing. I'm sorry, I have so many screens here, I'm not sure
which one is mine. But thank you for coming back from lunch. I was stunned. The food was
great, and 30 minutes into it, I thought an hour had passed and we all had a little extra
time. And I had some extra time, 'cause I can't figure out how to move my slides, and
there we go. So the theme of the presentation, I'm gonna talk briefly about the stock market
and why that's important to you, and then talk about the state of the Internet, some
high-level trends across the world, and then do a deep dive on the Mobile Internet. So
first and foremost, one of the things that all investors struggle with and all business
people struggle with is, what's the stock market telling us. And oftentimes, the stock
market goes in the opposite direction of what the direction that--where we think it should.
And the reality is, the stock market is a leading indicator of where the economy is
going, not a lagging indicator. And what this beautifully color-coded chart represents is
performance of a bunch of different stock market indices from April of 2007 to the present.
The yellow line is the SMP500, which is a proxy for U.S. companies. The red line is
the China-Shanghai index, blue line is Russia, pink is NASDAQ, et cetera. The green line
is crude oil. And I should have this here because the market began telling us in the
third quarter of 2007, we were about to enter a recession. And many of us, as you recall,
business was a little weaker, but it wasn't really that bad. And then it began to get
worse and worse and worse, crescendoing depending on who you are and where you were sometime
in the--at the end of 2008. And then the stock market, in effect, started to recover well
before we were seeing it in our businesses. So I have this here because the good news
is, the market's telling us that things are--continue to get better. And it will know before we
know. That doesn't mean a daily trade--mean things will get worse tomorrow, but it's something
you should carry with you going forward as you manage your businesses. So bottom line
on the internet is, the Mobile Internet will be bigger. There will be more people accessing
the internet via mobile devices than desktop devices within five years, potentially well
before five years. Internet growth around the world all-in remains robust, up about
13% year on year in 2009, but interestingly 48% of the internet users are in just five
countries. China is number one, U.S. is number two, India is number three, Brazil is number
four, and Russia is number five. Back in 1995 when Netscape went public, 75% of all internet
users were in the United States. We've obviously seen a big change, but overall growth remains
strong. When we started focusing on trying to figure out where the Mobile Internet was
gonna go, which was a very long time ago, we finally pulled our thoughts together in
a report that I think you had a link to in December of 2009. We were looking at what
was going on with iPod and iTouch, and we said it feels to us that the Mobile Internet
is being adopted faster than the Desktop Internet was. How can we figure that out? And it was
hard to look at the data in the way that we thought made sense, and we said, "Let's just
look at some of the more transformative products of the past that relate to communications
and connectivity and the internet and see how fast they ramped. And so the red line
at the bottom indicates how many people were using AOL, America Online, from the first
quarter of launch to the 20th quarter. And for those of us that were around at that point
in time, it seemed like it was ramping pretty quickly. We had a guy at Morgan Stanley who
used to count the number of Smiths in the AOL directory to figure out how rapidly it
was growing. We've made a lot of progress since then. But moving right along, the blue
line looks at the adoption of the Netscape browser, the yellow line looks at the adoption
of NTT DoCoMo's i-mode Mobile Internet service in Japan. And all of those things were heralded
as being first in class, best in class, and ramping very quickly. Fast forward to today
and look at the adoption of iPhone and iTouch, now in about the 10th or 11th quarter since
launch, and the trajectory is extraordinary, unlike anything we've ever seen. I don't know
if you're a skier, but I could handle any of those runs except the green run. I might
handle that on a stretcher. But indeed, the Mobile Internet is ramping faster than anything
we have, we have seen before. If it feels that way, the data backs it up. I indicated
earlier--this is our very detailed chart that illustrates in great detail when Mobile Internet
users will surpass desktop users. We can supply you with more data if you need it. It's obviously
not all there, but the trajectory is fast. Back in 1996 and 1997, we did a forecast for
how big e-commerce would be as a percent of total retail. And that doesn't matter, but
where we are today is about 4% of total retail as accounted for for e-commerce. Took about
15 years to get to that level. Our bet that the ramp to 4% to 5% of commerce on mobile
happens way faster than 15 years. They can potentially happen in five. So something for
those of you that are retail organizations, or frankly any organization, you need to be
aware of. This is just historical data and contextual data from Forrester. This gives
you a sense of the categories of commerce that had different penetration levels online,
computer products, books, gift cards, music and video, more than 20% of their business
is online, toys, video games, almost 20%, and then home furnishings, et cetera, less
than 10%, just to give you context. And this data is from 2007. If anyone has data that's
more current, we'll take it. But the point is, it's ramping pretty quickly. We looked--one
of the things that we did when we wrote this Mobile Internet report, and one of the things
I've learned at trying to figure out how new markets might develop is where can we go to
figure out where we've seen this movie before. And in the Mobile Internet, we were able to
look at Japan. The Mobile Internet in Japan was sort of on a trajectory like the Desktop
Internet was in the U.S. in the mid '90s to the 2000s. And in Japan, the leading e-commerce
company is a company called Rakuten, and 19% of their fourth quarter revenue came from
mobile devices. That gives you a sense of how this trajectory may play out in our view
in the U.S. One more point on communications, social networking in many ways is the new
email. If you look at the data in July of 2009, the number of social networking users
surpassed the number of email users per comScore. And the time spent on social networking versus
time spent on email, that transition took place in November 2007, also according to
comScore. If you working in Enterprise and you manage IT for an enterprise, this is what
people are doing at home. It may not be what people are doing at work, but it's probably
what they want to be doing at work. This is an eyesore slide, but we just kept adding
more and more stuff to it. Consumers--bottom line, consumers expect to get their stuff
24/7 from the palms of their hands. I was thrilled using AT&T to watch the Masters driving
up 3rd Avenue on the way up from New York City to JFK Airport last night and couldn't
believe I wasn't disconnected, but now I expect that any time I'm traveling, to be able to
do that. Now to drill down on the Mobile Internet, these are the six themes I'm gonna focus on.
Number one, wealth creation and destruction will be material as it relates to Mobile Internet.
It always is in computing cycles. I think they're probably a few people in the room
that remembered digital equipment and Honeywell and Wang and Compaq "before it was something
in my wife's purse" as Sean Roach at Tandy said years ago. And another one of those,
second, mobile is ramping faster than Desktop Internet, and there are a handful of drivers
of that. It's very rare in technology when you see so many things come together at the
same time in a recession. The third thing is Apple is leading in mobile innovation and
impact for now, but the depth of the app ecosystems, the user experience and pricing will determine
the long-term winners. The next point is game-changing communications and commerce platforms, social
networking, and mobile are merging extremely rapidly. Fifth is massive data growth is driving
carrier and equipment transitions. I won't spend a lot of time on that. And the last
thing is what I said earlier, we've learned some stuff from what's happened in Japan about
how the Mobile Internet will be involved in the rest of the world. So the first point--these
are the text cycles that we've lived through in the last 50 years. Mainframe computing
in the '60s, mini-computing in the '70s, personal computing in the '80s, Desktop Internet computing
in the '90s, and Mobile Internet computing now. One of the things that happens in each
computing cycle is they're ten times more users than the last time. One thing that a
lot of investors ask us is, "Well, how can the market capitalization of this company
get higher? It's already so high." And we take a step back and we say, "Well, the market
opportunity is ten times bigger. Now we just have to figure out who the winners are going
to be." And it's a function of increased-- increased--reduced friction, better processing
power, improved user interfaces, smaller form factors, lower prices, and expanded services.
If there's anyone in the room that had a mainframe in your home, I'm sorry. When you were growing
up, if there's anything--or when you were 50, I'm really sorry. If there's anybody that
doesn't have at least a few mobile devices in your living room today, I'd be surprised.
And it's not just about the--it's finally not just about the phone. It's also about
the refrigerator and the the thermostat, stuff that was a dream a while ago, which is not
too far away. To take a step back, we've had significant changes in the user interface.
We've had significant changes in input. If you go back to the early days of desktop computing,
you had a keyboard, and then you moved to a graphical user interface with a mouse, and
now we've moved to touch. Somebody was telling me a story about how his two-year-old daughter
was using an iPhone and then for the first time went to YouTube, spent a lot of time
on it, loved it, put the phone down, TV set was on, went up to the TV and tried to turn
the channels by swiping. Or I guess from here, it would be here. But that's what we now expect.
And it's also, we've gone, the first--when you got your first PC and used VisiCalc or
whatever you used on it, you weren't consuming content, you were creating content. So we've
evolved from the user interface, but we've also evolved from the--what you expect from
the device. And we've really moved from content creation to content consumption, and all the
above. So one of the things near and dear to my heart, for better or for worse is that
we usually have a lot of wealth creation and destruction in these computing cycles. New
companies often win big in new cycles while incumbents often falter. And then there are
incumbents that make the transition to the new cycle pretty well. And when I look at
the companies that are innovating in the Mobile Internet today at a really high level, and
there's a ton of innovation with smaller start-ups, but Google is one of those companies, salesforce.com
is one of those companies, Apple is one of those companies, Facebook is one of those
companies, Amazon is one of those companies. Four of the five of those companies are, in
effect, last generation companies that appear to be forging the way to the next generation
in a pretty powerful way. And all of them have a lot of experience with people that
have lived through two or three cycles that are running the companies. Typically when
these new cycles appear, the infrastructure companies sort of start the way and benefit,
and then platform companies and application services and--and content companies or commerce
companies follow. Then next point--and I think this is super important--is that they're five
trends converging. Never seen this in my life all at the same time. 3G, social networking,
video over IP, voice-over IP, and impressive mobile devices. You've seen this slide, but
if there's one slide that encapsulates everything we're saying, this is it, so I decided to
show it again. Point is, desktop--Mobile Internet growing quickly. So the inflection points:
one is 3G. In 2010, the number of 3--the users, the number of users around the world that
use 3G will surpass 20%. One of the things I've learned as a technology observer is that
when a new technology hits 20% penetration, that's when it goes on to the mainstream.
And 20% to 50% from an investment perspective is typically where investors make the most
money in the publicly traded stocks of the leaders. And it's when you get--the leaders
and the laggards get sorted out. If we look at it on a regional basis, we hit that penetration
level of 20% or more in Western Europe in 2008, we hit North America in 2008, we'll
hit it in Eastern Europe in 2011, and hit it in Asia, ex-Japan, in 2011, and in the
Middle East and Africa in-- in 2011 as well. In Japan, we hit it a long, long, long, time
ago. Another eyesore slide, but something that I think is important in America. I've
traveled--I travel around the world a lot, and I used to--I think two years ago, I was
at the point where when I was in Asia, I would keep my cell phone in my pocket because people
would just laugh at me when I used it. Then I'd ask a dumb questions: "You can do that
on your phone? Wow, that's really cool." And they're like, "Yeah, Mary, we've been able
to do it for five years." But I say that because of--a funny thing happened on the way to the
forum, if you will, in 2000--in the first quarter of 2009, the United States became
the largest market in the world for 3G users. So the United States is now the leading market
for high-speed mobile access, and as you all know, Silicon Valley has now taken over the
mantle of being the innovation leader in the Mobile Internet, something I thought would
never happen. In fact, I thought all was lost a few years ago. So a couple more points.
As you recall, 2008 and 2009 were pretty difficult years for the economy. One of the things that
struck us when we were looking at the data on the drivers of mobile access were, how
fast is GPS growing, how fast is 3G growing, how fast is Wi-Fi growing, how fast is Bluetooth
growing. And when we pulled back the data, each of these markets based on users or chip
sets, whatever the appropriate metric is, we're growing at 40% year on year, and all
of them had hundreds of millions of users. So when you find a market that has a whole
ecosystem of hundreds of millions of users that's growing by 40% and you're in a recession
and it's not foreclosures, you know something is going on in the ecosytem. Next point is
social networking. Consumers want to connect not only via the wired world, but they also
want to connect in a wireless way. This looks at social networking sites around the world,
about 900 million users up 32% year to year. Facebook has about 500 million of those. The
leader in the English-speaking markets and there are certainly leaders in other markets
around the world that have strongholds, where it'll be tough for Facebook to get at, but
the number one, number one player in the market is Facebook. This looks at global usage of
the top five sites on the Internet on a relative basis. Not on an absolute basis, but if you
look at how consumers are spending their time on the Internet and how it's changed over
the last four or five years, the biggest gainers in usage are Facebook and YouTube by a long
shot. Google has held its own, and MSN and Yahoo! have declined on a relative basis.
Google wants people in and out fast, the other sites don't. And that's pretty telling, just
from a standpoint of usage. Facebook is garnering a rising share of communications. One of the
things that struck me about my mobile device is it's increasingly a content creation tool
with the picture, the camera, and the ability to post and go, and post it out to the web.
One of the things that we're--a lot of people ask the question, "How will Facebook make
money?" I think the answer is, Facebook will make money when Facebook wants to make money.
And Facebook may be making money anyway, but that's not the point. It's a--when we look
at the advertisers that are on their site and companies that have affiliates-- affiliations
with consumers, this is a striking collection of data. Zynga's Texas Hold'em has 16 1/2
million fans on Facebook, Disney has 3.4 million fans, Pringles has 3.1 million fans, Red Bull,
2.5 million, the NBA, 2.1 million. Two million or more fans that you know about and you can
connect with is a very valuable asset. Some might argue it's prime time TV viewership
that gets $25 CPNs, or revenue per thousand page views. It's a big opportunity to--for
these companies to potentially connect with customers, and it's a big opportunity to potentially
get monetized. So don't underestimate the connections that are out there. Another point
on trends related to social networking--and Marc Benioff will tell you whether I'm right
or wrong, so I'm not gonna steal any of his thunder, not that I could. But salesforce.com
really appears to be doing a great job at bringing social networking into enterprises.
And if, Marc, if you disagree, you can speak up now. I hear nothing, so he may be in the
back. Video over the internet, obviously a big deal. This is data that Cisco provides
that looks at what's going to drive Mobile Internet traffic over the next--out to 2014.
They forecast that Mobile Internet traffic will grow by 39-fold out to 2014. Most of
that is, is video usage. My story of getting from the Upper West Side to JFK yesterday
and watching the Masters is part of that. Next point, Voice-Over-IP. Consumers want
to chat via voice messaging and video via wired and wireless internet. If Skype, the
leader in Voice-Over-IP, were a carrier, which it's not, and its registered users were compared
with subscribers for carriers, it will be the largest carrier in the world with 520
million unique visitors up 41% year on year. 12% of those calls are cross border, and 34%
are video- enabled. Obviously a big deal, and obviously a cost-savings opportunity for
enterprises. Google Voice doing a great job of putting the user in control of voice communications
via IP as well. Next point in this theme of what are the drivers to impressive mobile
devices. Apple's iPhone and iTouch and App Store created the spark that caused the Mobile
Internet to really take off. This looks at the ramp of iPhone and, and iTouch. Many people
talk about iPhone. They need to include iTouch in the mix. You can see the blue bar gives
you a sense of number of iTouches shipped, or number of iTouch's users, and the red is
iPhones. So there are nearly as many iTouch users as iPhone users. For now, Apple is leading
on the innovation front, and Android is getting a fair amount of traction and momentum. This
is a pretty stunning slide, as the next one will be. The yellow bar and the green bar
basically represent--and you can see that the operating systems at the bottom, iPhone,
Symbian, Android, RIM, Windows, Palm, and Other. The yellow and green bars represent
intensity of internet usage. And the blue bar represents the share of unit shipments
of smartphones. And so you can see the iPhone is totally over-indexed in usage vis-a-vis
Symbian, vis-a-vis RIM. Android also totally over-indexed. And the two newcomers in the
market, iPhone with 16% of unit shipments and Android at 8% are the ones that are not
only gaining the unit traction, but they're also gaining the usage traction. This looks
at it a different way. If you look at this, try to figure this out too fast, you'll get
a headache. But the red bar represents the share of Mobile Internet usage by operating
system, and the green--and the red bar represents iPhone, and the green represents Android and
also RIM. So again, strong growth for iPhone and strong growth for Android. Next point,
game-changing communications and commerce platforms, social networking and mobile are
emerging very rapidly. We basically have at a high level two platforms that are garnering
a lot of--of developer attention, whether it's social networking with Facebook, whether
it's mobile devices with iPhone in the lead based on app interest. And they're starting
to overlap. This just looks at the ecosystems for these two platforms. It looks at what
sort of apps are developed. One of the things I've learned about technology is in early
days, games are usually the leading app, and then it transitions to more productivity and
more business apps. And Facebook is no different with 500 million- plus apps downloaded, up
tenfold year to year. You all know the Apple iPhone and iTouch data on the app download
stuff. If we look at the, the connection between these two, the most downloaded free app on
the iPhone is Facebook. And if Google wants to provide the same information to us, we'll
provide that too, but we don't have all that yet. One thing, again, on the how quickly
these transitions are happening, we wanted--we went back to Japan to look at how has access
to social networking changed as mobile has become more relevant. The leading social networking
site in Japan is a company called mixi. In the second quarter of 2006, only 17% of their
usage was on mobile devices and now it's up to 72%. So, again, a very, very rapid change
driven by the consumer. Another point on the themes, on commerce, it just keeps getting
better and better. One of the key innovators there is Amazon.com. We estimate that more
than 25% of their revenue comes from their recommendation engine. But what we have here
is what Amazon looked like in 1995, and what Amazon looks like in 2009. Remember, they
started out in books. There are a lot of people that don't even know that. And I say that
because if we can all stay on that kind of innovation trajectory that a lot of these
companies are driving, it's a pretty rapid ramp, and good for consumers. So mobile is
revolutionizing commerce. There are four things that we're pretty excited about as it relates
to commerce. One is location-based services, two is transparent pricing, three is deep
discounts, and four is immediate gratification. I'm gonna pick up my pace a little bit, because
I'm falling behind. But Zipcar has one of the best location-based apps. If you haven't
used it, download it, and you can find out how many zipcars you can find on the Google
campus or at Stanford. I just think it's the coolest thing--not the coolest thing in the
world, but it's pretty cool to be able to identify where a car is, and get it, and unlock
it, and drive it away, all within five minutes. I think it's a great example of location-based
services on mobile devices. And now there is transparent pricing, apps like ShopSavvy
and RedLaser. I'm sure you've been in a retailer recently and you've seen somebody do the barcode
scan, and you've seen the salesperson go, "Oh, no, another one of them." But the pricing
transparency is huge as well. And those are among some of the most actively downloaded
apps on Android and also on iPhone. Deep Discounts. I'm not gonna ask you to raise your hand if
you've become a Gilt or One King's Lane addict, but it is a great way to save money, and becoming
increasingly a part of the way people shop. And it makes it even better on a mobile device.
And the other is immediate gratification. If you use Pandora and you're listening to
a tune and you like it and you can buy it and get it downloaded immediately, its certainly
something that didn't occur that long ago. Mobile coupons, interesting opportunities
there, we think. Branded mobile apps that can drive--increase store traffic and purchases,
Starbucks, a great example there. And also mobile push notification. I've heard more
people talk about eBay in the context of just being out to dinner with them, being at a
party, whatever, than I've heard in a while, and it's because, "Oops, I just lost the auction,"
or "Oops, I was just outbid. I need to step away and deal with this." And so they're certainly
getting a benefit out of real-time notification. And I think David just lost an auction for
a Ferrari that he was buying, so you might want to step out of the room and buy that.
I'm joking. I'm gonna skip past Lockerz. We can come back to that if we have some time
in the end, but I want to make sure I get through this, and I have to read through seven
pages of hedge clauses, so it will take me a very long time. The next point is massive
data growth is driving carrier equipment transitions. One of my favorite things about Mobile Internet
data is one of the best surveys that came out in the early days of the Mobile Internet
was from a company called Rubicom, and they said, "How are peo--" asked the question,
"How do you use your iPhone?" Came back with all these answers, and then he said, "I forgot
to ask if they make phone calls." But other than that, the survey was fabulous. Point
is, the average cell phone user spends 70% of their time on voice. The average iPhone
user, 45%. This is old data. It's probably actually much lower than that. Data that looks
at how people use their mobile devices, uh, music--number one, games--number two, social
networking--number three, web search is number four. And this--I think maybe a similar survey,
they forgot to ask the question about voice, but you get the point. For carriers, it's
a blessing and a curse. This looks at data from NTT DoCoMo and Vodafone, two of the largest
carriers, one in Europe, one in Japan. NTT DoCoMo, one in Europe, Vodafone, more than
70% in the case of Vodafone and more than 90% of the case in NTT DoCoMo of their traffic
is on data, so--And you can see the trajectory of it. And more of that to come. Six-point,
some of the stuff we've learned from the past, not only from mobile but also from the Desktop
Internet, number one, when consumers are empowered by the Internet, usage changes can occur very
quickly. Nowhere is this more well represented than this slide. This looks at how people
in the UK use their--use mobile on their--use the Internet on their mobile devices in 2007,
on the left in 2008. On the right, the carriers, walled gardens, accounted for 57% of users
in 2007, 22% in 2008. And Google went from 44% of usage to 82%, obviously a big change.
When the consumers were empowered by something better. Another lesson I learned--thought
I knew, but wasn't quite sure, and felt like I was proven wrong and then was proven right,
but advertising dollars ultimately follow eyeballs. This looks back at the data from
1995. There were 6 million internet users, and advertising revenue per user was $9. It
was a whopping $55 million market. In 2009, it's a $54 billion market. The $9 has gone
from $46 a user, and the 6 million users has gone to 1.2 billion. So if you ever doubt
that the ad market will work, I think the facts are here. It's just a question of trajectory.
New business models are often created during technology changes. I'm reasonably confident
to say I guarantee no one in this room ten years ago would have said virtual goods, or
virtual dirt, as someone I'm very fond of said recently, would be a $2 billion business
in China in 2009, but that's a legit business with high revenues supporting the market capitalization
of a company called Tencent, which is I think 30 billion plus in market cap. One thing that's
very different about the Mobile Internet versus the Desktop Internet is people pay for stuff.
And if you--This is a pie chart that looks at how revenue is derived on the Desktop Internet.
40%, and this is all-- There are some apples and oranges comparisons here, but it's directionally
accurate. 40% of revenue is generated by advertising, 35% by e-commerce, and 25% for paid services.
Basically, 30%--consumers pay for 30% of the stuff they get. If we look at the mobile internet,
consumers pay for 76% of the stuff they get, whether it's the app, whether it's the wallpaper,
whether it is the service. And why is that? It's because the billing systems are in place.
If someone had dropped down in 1995 and said, "Hey, every content provider, adopt this neutral-standard
payment system," and everybody decided to do it, the monetization of the Desktop Internet
would be very different. The Mobile Internet has just evolved differently, in part because
of carriers, and in part because of some of the software players. Next point, I'm gonna
drill down on what Japan revenue recognition looks like for the Mobile Internet, and then
I'll go quickly to hedge clauses before I make a couple of comments. I know you guys
are all on the edge of your seats, but the rest of the world's Mobile Internet revenue
mix in 2008 is equal to what Japan looked like in 2007. So basically the rest of the
world is five to ten years behind Japan in monetization, and if we look at Japan in 2008,
they generated about 66% of their mobile revenue from data access, so that's to carriers. 21%
from e-commerce, 11% from paid services, and 2% from mobile. If we look at the rest of
the world today, which is on the far left, that's 88% from data access, versus 66% in
Japan, 9% from mobile paid services versus 21% in Japan, 2% from, excuse me, paid services,
versus 11% in Japan. I misspoke. It was 9% from mobile online commerce in the rest of
the world, versus was 21% in Japan. And then 1% from advertising versus 2% in Japan. The
reason this is here is like that advertising, advertising revenue follows eyeballs. We think
this gives us a template for the way monetization of the Mobile Internet will play out in the
rest of the world. Bottom line, the rapid ramp of Mobile Internet usage will be a boon
to consumers, and some companies will likely win big, potentially very big, while many
will wonder what just happened. And before I move to the hedge clauses, I'm gonna go
through the hedge clauses, and then they're all available on the web. And we can skip
past that and go right to that. But just from a CIO perspective, a lot of this was consumer-focused.
And just four points that I wanted to spend a little bit of time on before I close. One,
the Desktop Internet ramp, which really occurred from 1995 to 2007, in my opinion, was just
a warm-up act for what we're seeing happen on the Mobile Internet. The ramp is just happening
that much faster, and that seemed like it was pretty fast to a lot of us. So the good
news is consumers are more ready, and enterprises are more ready. Many people were caught flatfoot
in 1995 when the Desktop Internet evolved. Second point, the pace of change in innovation
related to the Mobile Internet is unprecedented, I think, in world history. The third is consumers
are leading and moving faster than their enterprises, and most of it are in the cloud that we--that
was discussed in the CIO panel earlier today. And the fourth and final point, this is more
important than ever, to listen to employees. They'll tell you where you need to take IT.
Again, that was discussed in the CIO panel, and that was very different as recently as
five to ten years ago. So I hope that was helpful, and you can kick me out. Thank you.
[pause] >> HARDY: Do you want to take one or two questions?
>> MEEKER: Your call. You know, I'm very nervous. I'm three minutes and 50 seconds over schedule.
>> HARDY: ...Anybody has a question? >> MEEKER: I can answer it in three seconds.
Yeah. >> HARDY: Sir. [pause] I'll repeat. Do you
want to repeat it? Will Japan be the benchmark for technology evolution, and if not, where
will it be seen? >> MEEKER: Yeah, I think it'll be the leading
thing we watch to see how we develop the Mobile Internet for at least the next couple of years,
but the reality is the development of the Mobile Internet was constrained by the carriers.
It was constrained by our own lack of innovation, and that groundswell has broken. And I've
never seen a ten-year-- something that was hamstrung for ten years just get unleashed
with really cool products, with a lot of people that are jumping up and ready to develop,
so I think the innovation in the Mobile Internet's gonna be right here in the United States of
America for quite a while. That's a good place to end. And David might say, "Right here on
campus," but that's up for him to say. >> HARDY: Thanks a lot, Mary.
>> MEEKER: Thank you.