My colleague Thomas Husson and I put together our 2014 mobile predictions. (See Report) One of the key predictions is:
Mobile will sit at the epicenter of mind-blowing exit events. The kernels of activity we saw in 2013 around mobile transactions will explode in 2014.
Those media companies that can't build audiences fast enough to capture spend of the Global 1000 will also look to acquisitions (think $3 billion for Snapchat).
What is mind-blowing is that neither Snapchat nor Instagram had a revenue stream when the bid or acquisition was announced.
In 2014, mobile companies with real revenue streams will go public. King.com (Candy Crush Saga) filed for an IPO with an estimated valuation of $1 billion based
on generating a couple of million dollars a day in revenue. What does King.com do? It monetizes mobile moments by taking advantage of the consumer's addiction to competition.
Mobile is moving so fast that that number is already dated. King started trading publicly on the NYSE Wednesday and part of the release was $1.9B in reported revenue in 2013 - way more than reported 8 months ago.
What happened this week?
1) Intel completed its acquisition of Basis Science - a wearable device - for a reported $100M to $150M. (See TechCrunch, VentureBeat)
King had $1.9B in 2013 gross revenue with the majority coming from Candy Crush.
I first heard of Candy Crush about a year ago. I was on vacation in Germany with my husband. One of my friends – for context, she was a college roommate now a CTO at a Fortune 500 company in Silicon Valley – started chatting with me on Facebook. It dawned on me it was 2 am in California.
Turns out she had worked late and was up playing Candy Crush. I couldn’t get my head around what it was about this game that was keeping her from sleeping, but she explained, “It’s fun. It’s hard. The game keeps changing. It’s always challenging.”
I advised her to go back to sleep, but couldn’t stop thinking about the conversation. The analyst in me had to dig a bit further.
There are a number of publishers with big hits like Candy Crush. The business model for some lies in in-app revenue, which is why “free” downloads want your gender, age, mother’s maiden name and social security number. Others profit from a minority of users who make in-app purchases to do things like purchase more lives, buy weapons (other games), and send gifts to their friends and fellow players. What’s interesting?
1. It’s software on a connected device.
Users are able to continually update and expand the game. They can even personalize it to feed their particular addiction—keeping them coming back for more.
A journalist called and asked me today about the market size for wearables. I replied, “That’s not the big story.”
So what is? It's data, and what you can do with it.
First you have to collect the data and have the permission to do so. Most of these relationships are one-to-one. I have these relationships with Nike, Jawbone, Basis, RunKeeper, MyFitnessPal and a few others. I have an app for each on my phone that harvests the data and shows it to me in a way I can understand. Many of these devices have open APIs, so I can import my Fitbit or Jawbone data into MyFitnessPal, for example.
From the story on 9to5mac.com, it is clear that Apple (like with Passbook) is creating a single place for consumers to store a wide range of healthcare and fitness information. From the screenshots they have, it also appears that one can trend this information over time. The phone is capable of collecting some of this information, and is increasingly doing so with less battery burn due to efficiencies in how the sensor data is crunched, so to speak. Wearables – perhaps one from Apple – will collect more information. Other data will certainly come from third-party wearables - such as fitness wearables, patches, bandages, socks and shirt - and attachments, such as the Smartphone Physical. There will always be tradeoffs between the amount of information you collect and the form factor. While I don't want to wear a chubby, clunky device 24x7, it gets better every day.
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