28 Aug 2014

Understanding Snapchat's Valuation

Snapchat - Valuation

Snapchat's valuation has soared from about $2 billion last year, when it reportedly declined an acquisition offer from Facebook, to $10 billion in its latest round of funding. Let's compare Snapchat's valuation and engagement metrics to those of other social networks/apps and attempt to understand the rationale behind this valuation.

25 Aug 2014

Uber's Potential

Over the past few months, Uber has been in the news for many reasons -- their stratospheric $18.2 billion valuation was just one of many controversies the company found itself in. But these should pale in comparison with the significance of their most recent announcement -- the Uber API.

21 Aug 2014

App Annie

I started this blog about two and a half years ago as a scrapbook for my thoughts about technology. Since then, it has snowballed into something much bigger, giving me the opportunity to interact and work with some of the smartest people in the industry. Today, I can honestly say that this experience has taught me far more than my formal education or career. But the most important thing I have learnt is the value of intellectual curiosity.

Earlier this year, I spoke to the App Annie team and it became clear to me that intellectual curiosity was deeply embedded into their culture. With the locus of innovation shifting to the digital economy, I found it very exciting to have an opportunity to explore and make sense of their industry-leading data set. And so, this October, I will be joining App Annie in London.

Of course, I will continue to analyze the technology landscape and post my thoughts here independently. At this point, I can only describe Tech-Thoughts as an ongoing self-education project. And education is a process that never ends.

18 Aug 2014

Price Buckets vs. Market Segments

IDC - Smartphone Segmentation by Price

IDC announced their smartphone shipment estimates for Q2 2014 last week, but the chart above seems to have captured all the attention. Regular readers may already be aware that I am a proponent of usage-based segmentation, rather than price-based segmentation. However, data can always be useful when interpreted correctly.

12 Aug 2014

The AOSP Myth

ABI Research - AOSP
Source: ABI Research

A report from ABI Research estimates that Android devices held 86% of the smartphone market in Q2 2014. Of this, forked Android or AOSP devices (without Google services) accounted for 20%, while the rest were devices certified by Google (with Google services preloaded). Some analysts see this as a threat to Google and Android. In reality, there is virtually no competition between these two categories.

8 Aug 2014

The Devices & Services Myth

Apple - Hardware vs. Services

The "devices & services strategy", as coined by Steve Ballmer, has long been my pet peeve. This is because it clearly attempts to conflate two business models that are diametrically opposed to one another -- monetizing hardware vs. services. While my initial analysis focused on Microsoft, this applies to other companies as well. Of course, this hasn't stopped analysts from arguing in favor of the very same "devices & services strategy" for Apple. The lack of specificity in this argument has always amused me. So let's be specific and look at the avenues available to Apple for monetizing services.

4 Aug 2014

Xiaomi: Leadership and Demand-Supply Mismatch

Canalys - China Smartphone Sales

Canalys just reported that Xiaomi became China's largest smartphone maker by shipping 14.99 million units in Q2 2014. This data point is interesting for two reasons -- the first deals with their success in China, and the second deals with the state of their international expansion.

28 Jul 2014

Facebook and the Potential of App Install Ads

Facebook - Revenue Break-Up

This quarter's results announcement from Facebook underscored a now familiar trend -- Mobile advertising revenues are skyrocketing while the desktop advertising and payments business remain in a holding pattern. Jan Dawson from Jackdaw Research has a terrific collection of charts that summarize Facebook's financial picture. However, I disagree with his position Facebook's app install ad business.

24 Jul 2014

Benchmarking Xiaomi's Services Revenue

Xiaomi - Services Revenue

The most important takeaway from Xiaomi's Mi-4 launch was the amount of media attention it received. In response, some have begun to question the validity of Xiaomi's proposed business model. Interestingly, Xiaomi has been fairly transparent revenue from services. We can use this to benchmark Xiaomi's monetization performance with other leading in services players.

21 Jul 2014

Low-End Disruption in Consumer Markets

Low-End Disruption - Automobiles

Disruption theory has become a very controversial topic of late. This is especially true for what some refer to as the "theory of low-end disruption". One of the most common misconceptions about "low-end" disruption is that it is only applicable to enterprise markets and not consumer markets. The goal of this post is to highlight examples of "low-end" disruption and value chain evolution in consumer markets and put to rest a few other common criticisms of the framework.