Weekly Roundup: February 2nd

Observations February 2, 2015 8:55 am


Earnings Report: We’re All Addicted To Our iPhones, Facebook, and Amazon Prime

  • Apple Had The Most Profitable Quarter Ever: And not just for Apple, but for any company, ever. Apple sold a record 74.5 million iPhones last quarter, which equates to 9 iPhones sold every second. 69% of Apple’s $74.6 billion in sales came from the iPhone, which was buoyed by the launch of the iPhone 6 and 6 Plus. Apple sold 74.5 million smartphones last quarter, a jump of 46% year over year. This growth was propelled by the Chinese market, which saw a 70% increase in revenue from the previous year. Should Apple be worried that it relies so heavily on one product? Hopefully the Apple Watch will pull its weight; the smartwatch will be Apple’s first major new product since the release of the iPad in 2010. The Apple Watch is scheduled to be released in April of this year. Details are still scarce about the smartwatch, including price and battery life.
  • Facebook Spreads Its Tentacles: Don’t use Facebook? Then you’re in the minority. Facebook reported its fourth quarter earnings this week, announcing that 890 million people around the world are daily active users, and are, on average, spending 10% more on the platform than they did last year. Facebook has grown daily active users 17.5% in a year, but the real growth is coming from mobile users. 745 million people accessed Facebook through mobile on a daily basis in Q4 2014, an increase of roughly 34% from last year, which means mobile users are growing at nearly double the rate of Facebook overall. Mobile ad revenue grew from 53% of total ad sales in Q4 2013 to 69% in Q4 2014. So if you haven’t figure it out by now, mobile is the big story of this earnings report.
  • Amazon Wins With Prime: Amazon also beat analysts’ 4th quarter estimates. Prime membership grew 53% last year, even despite the price hike to $99. Jeff Bezos commented that Amazon spent $1.3 billion investing in Prime Instant Video last year, and billions on shipping for Prime members. Although Amazon didn’t disclose how much more Prime members spend than non-members, the investment is definitely working. A recent report suggests Prime members may outspend non-members by double. With Prime, Amazon locks members into an ecosystem, and with the ever-expanding perks of Prime, Amazon can keep incentivizing members to stick with them.

App Economy: Bigger Than Hollywood

  • App Annie Index: 2014 Retrospective: App Annie released a comprehensive report on app trends in 2014. Notable trends include the rise of super casual gaming (think simple games like Flappy Bird), the continued dominance of messaging apps, growth of video streaming apps. The report also reflects the rise of the sharing economy, as transportation apps like Uber and Lyft and Airbnb saw substantial growth. One shocking statistic; the top four downloaded apps last year were all owned by Facebook (relevant, see above, Facebook Spreads Its Tentacles). Facebook Messenger surpassed Facebook as most downloaded app of 2014, followed by WhatsApp Messenger and Instagram. Viber, Line, and Snapchat also made an appearance on the top ten list, meaning five of the most downloaded apps were messaging apps. Which leads us to our next point…
  • Why Apps For Messaging Are Trending: Messaging apps initially became popular because they were free to use, more private than social networks like Facebook and Twitter, and offered a simple, fast, and easy way to stay in touch with friends. But as Fred Wilson points out in the NY Times, messaging apps are becoming content and commerce portals. Wilson’s statement seems like foreshadowing; just a day later, Snapchat announced the launch of a new publishing feature, Discover. Discover will feature content from partners like CNN and ESPN, as well as original content from Snapchat’s own team. Snapchat wasted no time in announcing its first foray into originals, a scripted series called Literally Can’t Even.  The show premiered on January 31st (and has likely disappeared by the time you’re reading this). AT&T also announced a new scripted series on Snapchat, Snapperhero. The news has KiK CEO echoing Wilson and saying that messaging apps as they are have peaked, and that growth will come from additional services like media and payments.
  • The App Economy Is Now ‘Bigger Than Hollywood’: Developers earned $10 billion in 2014 from the iOS App Store, which is roughly the same amount as Hollywood. And that’s just the iOS App Store. That doesn’t even count Android. Time to start dreaming of a career as a developer and drop the acting lessons.

Virtual Reality: On The Verge

  • Oculus Rift Announces In-House Studio: Virtual reality made a huge splash at Sundance this year. Hollywood movie studios and independent film makers debuted virtual reality experiences; Wild– The Experience  puts viewers into a scene with Reese Witherspoon, and Perspective; Chapter 1: The Party gives the viewer a first person point of view of a campus rape from the lens of both the victim and attacker. But it may have been Oculus that stole the show, who revealed its first VR short film, Lost, from the newly formed in-house film studio. Lost is directed by animator Saschka Unseld, who directed Pixar’s The Blue UmbrellaLost breaks from traditional films in that there is no set length to the story; depending on where the viewer looks, the film changes, and can last anywhere from 3 minutes to 10 minutes. With serious filmmaking talent on board, Oculus’ new “Story Studio” might beat Hollywood at its own game.
  • Signs Virtual Reality Is Taking Off: Oculus Rift, Samsung VR, Google Cardboard, Microsoft HoloLens… virtual reality is shaping up to be the next big battle between tech giants. But before virtual reality becomes a mainstream entertainment, education, or tourism option, new hardware is needed. Live-streaming a virtual experience also remains a challenge, although we’re starting to see some experiments.
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Originally published on R/GA FutureVision.

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