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Monday, October 24, 2011

Infographic: The Most Valuable Digital Consumers

Infographic: The Most Valuable Digital Consumers:

These days, Social/Local/Mobile seems to be driving much of the conversation about online opportunities. But at the end of the day, there is only one constant common denominator across the Web: the consumer. An understanding of this consumer and how they are influenced by social, mobile and local experiences online is vital to big brands looking to reach them on the Web. Nielsen and NM Incite, a Nielsen/McKinsey company, illustrate some findings that highlight digital consumer behaviors and consumption patterns that can help brand advertisers understand their most valuable customers and how they’re engaging across social, local and mobile.

social for wire

local for wire

mobile for wire

View full graphic with footnotes.

Social network popularity around the world in 2011

Social network popularity around the world in 2011:

social networks

Online social networks are everywhere these days, a truly global phenomenon. But where are the different social networks having the most success in terms of popularity? That is what we’ll try to answer in this post.

We have included 11 social networks in this survey: Facebook, Twitter, LinkedIn, Google+, Orkut, Tumblr, FourSquare, MySpace, LiveJournal, Hi5 and Bebo.

Please note that this isn’t meant to be an exhaustive list covering all social networks out there. There are literally hundreds of them.

To map popularity, we’ve used Google search statistics (their Insights for Search tool). This will give us a good indication of the interest – or popularity, if you will – of a social network in a given region. We’re basing this survey on search results from the past 90 days, so it’s a reasonably large, up-to-date sample. After all, we want to know the situation right now.

A few initial observations

We’ve gone through and summarized some of the information for you, but please feel free to scroll down and check out the individual social networks you’re interested in.

Top countries for each social network (in terms of interest)

  • Facebook is most popular in Turkey and Venezuela.

  • Twitter is most popular in Venezuela and Brazil.

  • LinkedIn is most popular in the Netherlands and India.

  • Google+ is most popular in Taiwan and Hong Kong.

  • Tumblr is most popular in the Philippines and Brazil.

  • FourSquare is most popular in Indonesia and Malaysia.

  • MySpace is most popular in Puerto Rico and Myanmar (Burma).

  • LiveJournal is most popular in Singapore and Russia.

  • Hi5 is most popular in Thailand and Romania.

  • Bebo is most popular in Ireland and New Zealand.

  • Orkut is most popular in Brazil and Paraguay. The interest shown for Orkut in Brazil far outstrips that of any other country.

It’s worth pointing out that this doesn’t necessarily mean that the majority of users come from these countries. We’re talking about sheer interest in a service. The size of the local user base will depend on the size of the Internet population in that country.

Also note that we haven’t compared the social networks against each other. This is a survey that examines where each social network has managed to garner the most interest in its service.

Some standout countries in this survey

  • Brazil is in the top five for Twitter, Orkut, Tumblr and Bebo.

  • Singapore is in the top five for LinkedIn, Tumblr, FourSquare and LiveJournal.

  • The United States is in the top five for LinkedIn, Tumblr and MySpace.

  • The Philippines is in the top five for Tumblr, FourSquare and LiveJournal.

  • India is in the top five for LinkedIn and Orkut.

  • The United Kingdom is in the top five for LinkedIn and Bebo.

  • Indonesia is in the top five for Twitter and FourSquare.

  • Venezuela and Turkey are in the top five for Facebook and Twitter.

That was just a brief summary. Why don’t you go ahead and have a look for yourself? We’ve listed the results for all the included social networks here below. We’ve also included direct links to Google Insights for Search if you want to dig even deeper into the results and play around a little.


Interest in Facebook

Countries with the highest interest in Facebook:

  1. Turkey

  2. Venezuela

  3. Tunisia

  4. Colombia

  5. Dominican Republic

You can dig deeper into Google’s search stats for Facebook here.


Interest in Twitter

Countries with the highest interest in Twitter:

  1. Venezuela

  2. Brazil

  3. Indonesia

  4. Turkey

  5. El Salvador

You can dig deeper into Google’s search stats for Twitter here.


Interest in LinkedIn

Countries with the highest interest in LinkedIn:

  1. Netherlands

  2. India

  3. United Kingdom

  4. Singapore

  5. United States

You can dig deeper into Google’s search stats for LinkedIn here.


Interest in Google+

Countries with the highest interest in Google+:

  1. Taiwan

  2. Hong Kong

  3. Nepal

  4. Finland

  5. Honduras

(Ok, Hong Kong isn’t a country per se, but Google Insights for Search lists “regions”, which don’t always correspond to countries.)

You can dig deeper into Google’s search stats for Google+ here.


Interest in Orkut

Countries with the highest interest in Orkut:

  1. Brazil

  2. Paraguay

  3. India

  4. Haiti

  5. Oman

You can dig deeper into Google’s search stats for Orkut here.


Interest in Tumblr

Countries with the highest interest in Tumblr:

  1. Philippines

  2. Brazil

  3. Australia

  4. United States

  5. Singapore

You can dig deeper into Google’s search stats for Tumblr here.


Interest in FourSquare

Countries with the highest interest in FourSquare:

  1. Indonesia

  2. Malaysia

  3. Singapore

  4. Thailand

  5. Philippines

You can dig deeper into Google’s search stats for FourSquare here.


Interest in MySpace

Countries with the highest interest in MySpace:

  1. Puerto Rico

  2. Myanmar (Burma)

  3. United States

  4. Jamaica

  5. Trinidad and Tobago

You can dig deeper into Google’s search stats for MySpace here.


Interest in LiveJournal

Countries with the highest interest in LiveJournal:

  1. Singapore

  2. Russia

  3. Belarus

  4. Ukraine

  5. Philippines

You can dig deeper into Google’s search stats for LiveJournal here.


Interest in Hi5

Countries with the highest interest in Hi5:

  1. Thailand

  2. Romania

  3. Peru

  4. Laos

  5. Portugal

You can dig deeper into Google’s search stats for Hi5 here.


Interest in Bebo

Countries with the highest interest in Bebo:

  1. Ireland

  2. New Zealand

  3. United Kingdom

  4. Brazil

  5. Australia

You can dig deeper into Google’s search stats for Bebo here.

Final notes

As you noticed, we only included a limited list of social networks in this survey. For example, we didn’t include social networks that are regional by nature, i.e. don’t have a global focus. There are plenty of country- or language-specific social networks that are successful in individual countries, for example VKontakte in Russia and the Russian-speaking countries of the former Soviet Union, Mixi in Japan, RenRen and Qzone in China, Hyves in the Netherlands, etc.

If you’re curious, you can check out a similar survey we did three years ago, in August of 2008. We thought an update was long overdue, since things change so rapidly in social media.

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Friday, October 21, 2011

Are Apple’s investments in PP&E extraordinary?

Are Apple’s investments in PP&E extraordinary?:

In his recent posts Horace took a look at Apple’s fixed assets and their development over the recent years. He also tested the hypotheses that Apple is making investments into machinery & equipment on which iOS devices are produced by overlaying iOS volumes with preceding changes in property, plant and equipment (PP&E).

The question that has arisen is: Are Apple’s investments in PP&E extraordinary?

To answer, I have compiled the capital expenditures (CapEx) for our previously established peer group [1].

But first we need to clarify what CapEx include and not include. CapEx includes investment into property, plants, equipment, office furniture, larger IT hardware and in some cases patents; CapEx do not include investment into long-term marketable securities or other long-term financial instruments, acquisitions or capitalized R&D. Furthermore, CapEx are gross values and are not net of any sold equipment [2]. CapEx are largely depending on a company’s business model and strategy. For example if you are a manufacturer you need equipment to operate, if you are a software company or a retailer, your business will not be capital intensive.

As the second calendar quarter of 2011 is the latest quarter for which all companies have reported figures, we will take a look at last twelve months’ (LTM) figures from Q2/2011 backwards. The following stacked bar chart shows the combined CapEx of our peer group:

The combined capital expenditures of our peer group for the LTM CQ2/2011 have outpaced even pre-crisis levels of investments and, combined, account for $34.7 billion. Samsung, a diversified manufacturer of IT hardware and other equipment, has invested more than $11.6bn with Google ($5.1bn), HP ($4.4bn) and Apple with $3.4bn following in line. While Google’s CapEx mostly account for its infrastructure of server farms and other IT hardware, HP’s CapEx mostly account for IT hardware it leases to its customers [3]. In absolute terms, Apple takes fourth place in CapEx spending for the last twelve months ending in CQ2.

Since the business model and sales magnitude varies largely in our peer group, we can also take a look at a common measure to compare CapEx intensity by dividing CapEx by sales achieved in the same period. For the last twelve months we can depict the following chart:

The average of the peer group accounts for 4.4% of CapEx over sales. Samsung’s and Google’s business model are clearly more capital intensive, while Apple’s CapEx ratio of 3.4% is below the peer group average but above some of its peers like Nokia, Dell, LG, HTC or Motorola Mobility. Interestingly, capital intensity of HP, Apple, Sony, Microsoft and Amazon is at a comparable level of around 3.4%.

As noted before, business models and strategies are significantly different among companies in our peer group. However, while Apple’s CapEx intensity is not extraordinary, Apple’s CapEx in absolute terms are among the largest in it this peer group and have grown constantly throughout a five year period.

Is this a good thing and why does it matter?

CapEx by itself does not tell us much. We still do not know in what companies specifically invest as financial regulations do not require detailed CapEx accounts. We know that even if a company is not growing assets they need to be maintained, upgraded and replaced – this spending is also called “Maintenance CapEx”. Everything else can be called “Expansion CapEx” associated with new product launches, entry to new business area or geographies or expansion of (manufacturing) capacity.

Therefore, Expansion CapEx is closely linked to expected organic sales growth in the future. So let’s go ahead and link CapEx ratio of the previous years with the sales growth of the following year. The following chart shows the cumulative average growth rate (CAGR) over the last four years versus the average of CapEx/sales ratio of the four last preceding years:

We can see that high CapEx efficiency has been achieved by Amazon, Apple and HTC with sales growth rates of 33-47%. RIM reached similar revenue growth but with higher CapEx intensity. Google and Samsung with high CapEx intensity have only reached modest growth rates. Dell, HP, Microsoft and Sony have not grown significantly but have close to average CapEx intensity.

We cannot state that CapEx in absolute terms have been extraordinary for Apple, but we can witness that with below average CapEx/sales ratio Apple outgrew in absolute terms Dell, LG, Microsoft, Nokia and Sony and has grown close to the revenue size of Samsung and HP in the last four years.


  1. Excluding Lenovo (not reported) and Acer (extra-ordinary low numbers reported, to be investigated), Motorola Mobility figures only available for the last six quarters

  2. Minor differences may occur due to local Generally Accepted Accounting Principles (GAAP)

  3. HP assumes ownership of these assets and rents them to the customers who in turn have a smaller balance sheet and can run IT hardware CapEx through the income statement as lease expenses

Monday, October 17, 2011

Windows 7 just became the most widely used desktop OS in the world

Windows 7 just became the most widely used desktop OS in the world:

WindowsIn October, Windows 7 usage has for the first time surpassed Windows XP usage globally according to statistics from StatCounter. In other words, Windows 7 just became the most widely used desktop OS in the world.

This has been a long time coming. Windows XP has been at the top for eons (it launched 10 years ago, and once established, didn’t let go). Windows Vista never managed to threaten XP, so it wasn’t until Windows 7 came around that a shift really started to happen.

And that shift has happened fast. Windows 7 launched in October of 2009, then…

  • Within three months, it overtook Mac OS X.

  • Within 10 months, it overtook Windows Vista.

  • Now, two years after its launch, it’s finally overtaken Windows XP.

This is probably some kind of record.

Desktop OS market share over time

The chart above covers the entire life span of Windows 7 so far, counted from its official release date. According to Microsoft, they have already sold over 450 million Windows 7 licenses.

Windows XP is still a strong presence, but at least things are very much pointing in the right direction for Microsoft. They must be relieved. Microsoft surely didn’t expect XP to remain so dominant for so long. As for Windows Vista, it looks like it will die out before XP does in spite of being the newer OS.

You’ll see a close correlation between the combined decline of Vista and XP and the rise of Windows 7, which is to be expected. We’ve shown before that Windows 7 users upgrade from Windows XP and Vista, not from other operating systems. Windows eats Windows, OS cannibalism, so to speak. It’s mostly a natural consequence of Windows having such a dominant market presence.

Since the trend chart above isn’t ideal for showing the current situation in detail, here is a snapshot of the desktop operating system market share division as of October 2011, based on the first 10 days of the month:

Desktop OS market share, October 2011

It should be noted that these numbers are based on web usage (visitor stats to 3+ million sites), so it they won’t map exactly to the physical installed base. But these days, how common is it for PCs not to use the Web and the Internet? It’s also worth pointing out that it’s really the only “in use” metric to be had.

A funny little side note to end with: Over a year ago, we actually predicted that Windows 7 would overtake XP in November 2011. Ok, we were off by a month. So sue us… ;)

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The smartphone patent wars

The smartphone patent wars: Patent wars are raging in the smartphone industry as companies enter litigation in courts across the globe in pursuit of sales bans and royalties.

Monday, October 10, 2011

Facebook now as big as the entire Internet was in 2004

Facebook now as big as the entire Internet was in 2004:

FacebookAt the recent F8 conference Facebook revealed that they now have 800 million active users. Europe, with Russia included, has a population of 727 million. We now have a social network that is so large that it could fill up a major world region with people and still have some to spare (this “spare” being twice the size of Canada’s entire population).

Another cool comparison is that Facebook now has as many users as the entire Internet did back in 2004, the year Facebook was founded.

For fun, here are some other size comparisons you can make.

Facebook user base vs. internet population of world regions

The size of Facebook’s active user base is…

  • 38% of the entire current Internet population

  • 87% of the Internet population of Asia

  • 168% of the Internet population of Europe

  • 294% of the Internet population of North America

  • 370% of the Internet population of Latin America

  • 674% of the Internet population of Africa

  • 1,167% of the Internet population of the Middle East

  • 3,757% of the Internet population of Oceania / Australia

And comparing it with the entire population of a few selected countries, we get this:

Facebook user base vs. country populations

As a companion to the visual above, here you have the actual size relationships:

Facebook’s active user base is…

  • 2.5x the population of the United States

  • 3.9x the population of Brazil

  • 5.8x the population of Russia

  • 6.3x the population of Japan

  • 9.7x the population of Germany

  • 12.4x the population of France

  • 13x the population of the United Kingdom

  • 13.8x the population of Italy

  • 19.7x the population of Spain

  • 23.5x the population of Canada

  • 36.6x the population of Australia

  • 76.7x the population of Belgium

  • 88x the population of Sweden

  • 144.6x the population of Denmark

  • 185.7x the population of Ireland

  • Only India and China have populations larger than Facebook.

Note that the second chart compares entire populations, not just Internet populations (Internet users).

These numbers are pretty mind-boggling. Where will it all end? There’s still plenty of room left for Facebook to grow, but how massive can it get before it grinds to a halt?

Data sources: Population data from GeoHive. Internet user numbers from Internet World Stats.

But wait, there’s more! If you liked this post, check out this chart showing Facebook’s growth through the years, put into perspective by country populations, Internet stats, etc.: Facebook’s ginormous size put into context

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Friday, October 07, 2011

Can the Blackberry recover?

Can the Blackberry recover?:

The August comScore mobile survey (MobiLens) is out. It measures the penetration or consumption of various mobile products and services in the US over a three month period.

I track the change in this data over time. Here are some highlights:

In August about 520,000 users switched to using smartphones (from non-smart phones) as their primary phone. This is a bit down sequentially from July but about average for the period starting January 2010.

Penetration increased by about 1 % to 36%.

Extrapolating this growth implies 50% penetration by September 2012. However growth is accelerating slightly so that tipping point may come sooner. Separately, T-Mobile reported that 75% of its device sales during this year have been smartphones, so if this is indicative of overall US market, then by next year it may in fact be quite difficult to find any non-smart phones to buy.

Among the smartphones, the different OSs have the following installed bases:

The growth in both Android and iOS has been fairly constant for the last 18 months.

Microsoft seems to be stabilizing at around 6%

But RIM shows an alarming deterioration. The company has lost 4.3 million users in the last year and is now at about the same number of users it had in late 2009. This is in a market that has more than doubled.

With only about 16.5 million US users and an average loss of half a million users per month, unless something drastic happens, RIM could lose its entire US user base by the end of next year.

During the last month alone RIM lost 1.2 million users. Management insists that new devices will boost sales but here we’re measuring the erosion in core users, not upgrades. It’s much more likely that those 4.3 million who left Blackberry went to other smartphones. To move from a Blackberry to a feature phone seems very improbable to me.

That means that Blackberry’s pain is probably iPhone or Android’s gain. This sort of switch is often painful and I can only imagine that it’s done with some reluctance. All the more remarkable then that RIM could not offer incentives to stay. The Blackberry brand is fading rapidly and brand value is very hard to re-build.

There’s one more thing.

We can see platform rivalry in the installed base chart but the bigger battle is the competition with non-consumption. The following chart shows how overall platforms are faring as they carve up the feature phone market.

There are still 150 million Americans whose primary phone is not a smartphone. The conversion of those users is happening at a consistent pace but there are many years of growth remaining. I’ve often wondered if and when this pace would moderate. I suggested perhaps at 50% there would be an inflection point as the “easy money” would already have been made.

Much of that will depend on how the product (device + service) will be priced. It’s hard to get data on overall pricing. We can get some subsidized phone prices (for example now ranging from $0 to $400 for iPhone and probably similar for Android). What we don’t have is an average device+service price point for the industry. That’s what I would like to keep an eye on.

Operating System Market Share: September, 2011 Update

Operating System Market Share: September, 2011 Update:

Web Browser Market Share: September, 2011 Update

Web Browser Market Share: September, 2011 Update:

Mobile Device Manufacturer Market: September, 2011 Update

Mobile Device Manufacturer Market: September, 2011 Update: