Unpacked for Friday, June 23rd, 2016

Instagram’s New User Numbers Demonstrate Continued Strong Growth, Engagement – by Jan Dawson

Instagram released new user numbers this week including 500 million monthly active users and 300 million daily active users. Symbolically, the fact Instagram’s daily active user number is very close to Twitter’s monthly active user number feels pretty important. That’s an indication of just how fast Instagram has grown even as Twitter has stagnated and, of course, Twitter has consistently refused to provide a daily active user number. That’s telling because, as a measure, monthly active users tells you very little about true engagement with a platform. Using an app every 30 days isn’t much different from never using it at all. For social and communication apps, the key is daily usage. “Time spent” is an even better measure because it tells you how people are really engaging. Facebook has provided those numbers for the core Facebook experience and now for Instagram usage and both numbers are impressive. Aside from Twitter’s lack of growth in user numbers, a key concern remains how engaged its reported users are (and how many of them are automated or spam accounts rather than real human users).

It’s hard to look back on Facebook’s acquisition of Instagram and see it as anything but an astounding success. Both the idea of the acquisition and the execution post-acquisition have worked well for Facebook, which has exercised admirable restraint in leaving the core experience intact while evolving it in meaningful ways. The same arguably goes for WhatsApp. Across the messaging and communications space, Facebook has created or acquired great properties, giving them the freedom to keep doing what they’re doing, at least from a user perspective. From an advertiser perspective, they’ve had more cross-pollination but there’s been very little homogenization across the various apps, which have retained their own distinctive branding and user experiences. Obviously, it failed to acquire Snapchat and that’s a continued thorn in Facebook’s side given how well it’s doing, but their other bets have all paid off nicely in terms of user growth and, at Instagram, in terms of revenue growth as well.

A lot of the growth is still coming from the expansion of the overall smartphone market, which is really the key enabler of all these apps, but some of them are also benefiting from rapidly increasing share either broadly or within certain demographic or geographic segments. Apps focused on visual media are benefiting from significant growth in interest in those areas, whether that’s photos and videos at Instagram, private Snaps or Stories and Discover on Snapchat, or live video on Facebook. Now that our devices have the capability to create high-quality content and ubiquitous bandwidth to both upload and view it, that whole category is taking off. This certainly explains why Twitter is so focused on video at the moment and tweaked its Vine app in important ways this week too. Yet the focus on visual media at Twitter doesn’t seem to be helping address its growth problem.

HTC Nexus 2016 Leaks: Why does Google Has a Nexus Program? – by Carolina Milanesi

On Thursday, Mobipicker published some pictures of what they believe to be one of the two Nexus products HTC will bring to market later this year. HTC is expected to sell the HTC S1 “Sailfish” and the HTC M1 “Marlin”, with the latter described as a cross between the HTC M10 and the Huawei Nexus 6P.

The Nexus One, the first device coming out of the collaboration between HTC and Google, was released in 2010 and it really took the market by storm as it delivered a high-end device at a very aggressive price point — around $500. With the next Nexus device, Google moved from HTC to Samsung. The Nexus S performed poorly compared to the Nexus One so, with the following Galaxy Nexus once again by Samsung, Google opened up to carrier partnerships as well as an unlocked version in the Play Store. It was not until the LG Nexus 4 in 2012 we saw a Nexus device really performing well thanks to a very aggressive unlocked price that started at $299. The success was such LG retained the Nexus baton for the Nexus 5 in 2013, also aggressively priced at around $350. So, for the first three years, Google used Nexus to show off the relationship with different vendors, a new version of the operating system, and mostly drive the price point down while improving quality so consumers could engage more and more with these devices. While selling direct has been a great limitation on the Nexus effort, the new data plans rolling out in the US over the past couple of years have certainly helped consumers be more aware of the real price of these smartphones and helped them appreciate “good value for money” devices like the Nexus 5. The Motorla Nexus 6 was a clear departure from previous years and with a price of over $600 it had very limited sales. LG brought to market the Nexus 5x many saw as a good upgrade opportunity for Nexus 4 and 5 users in 2015 and Huawei brought the Nexus 6P in 2015.

Over the years, Nexus sales have never been anything to write home about. While devices such as the Nexus 5 helped LG regain credibility in the smartphone market, Nexus volumes were always too low to really make an impact on vendors’ overall performance.

Aside from the initial Android One, it also seems vendors are doing less and less to differentiate these devices from their current flagship products. So the Galaxy 6 looked very much like a Moto X and the Nexus 6P looks like a Huawei Mate 8. So it is no surprise the new HTC Nexus will look like the HTC M10. If the channel remains limited and the devices are not bringing in true innovation, why is Google continuing to pursue these efforts?

Google is between a rock and a hard place at the moment, with rumors Huawei is considering coming up with a separate OS as a plan B and Samsung has started to reinvest in Tizen. Google needs to be careful about antagonizing its partners. At the same time, as vendors like Samsung and Huawei are focusing more on their own UI and ecosystems, Google needs hardware to show off Android as it was intended. The latter would call for hardware designed by Google and gets the widest possible channel opportunity but the former calls for a more subdued approach. The results of the two approaches would be considerably different from the opportunity to go WOW with the first and end on MEH with the second.

Live Streaming is Hot Again – by Ben Bajarin
It is has been a little over a year since the Meerkat and Periscope live streaming craze. A year removed, I’m still convinced there is a role for live streaming content but it will largely only be popular during a social moment. Meaning, something big happens socially that a community, a city, a nation, or the world tunes into and is able to see from many different perspectives, not just what professional news crews create. Of course, the other value is when there are no cameras. Or, in the case of our mid-week debacle here in the US where the Democrats took over a congressional meeting and demanded legislation for more sane gun control laws. Cameras were ordered to be turned off, yet people broadcast the protest live via Periscope. Millions tuned in between Facebook Live Video and Twitter’s Periscope to watch the whole thing unfold. Reality TV at its best.

Live certainly works in this case and many others but the area that appears to be hot is celebrity content. The most popular content with the highest views is that from celebrities. It opens the door to their own business empire of celebrity endorsements and the like. So it isn’t surprising YouTube/Google wants to get in on this action. It appears you can now live stream directly from the YouTube app.

The big takeaway is we are entering a point in time where accessing any number of live streams is only a click away. But these streams have the potential to go viral in much larger ways than live television ever could, thanks to the social graph of Facebook, Twitter, and many other social networks. No one is fooled to believe this is the only and constant way we will consume live video but it certainly is going to be one of our options. Seems like Snapchat will be the next to offer Live and it’s only a matter of time, in my opinion.

HP Offers Thinnest Notebook – by Bob O’Donnell
Since the breakup of HP last fall, there have been many questions about what kind of innovations the PC and printing divisions of HP—called HP, Inc.—would be able to deliver to the market. Even though HP Labs went along as part of the deal, much of the press around the split handicapped HP Enterprise as the bigger beneficiary of the split. Clearly, those predictions didn’t have the benefit of seeing HP’s new Spectre 13, officially the world’s thinnest notebook at just 0.41” and, in its extremely limited gold-plated, Swarovski crystal-encrusted $25,000 version, likely the world’s most expensive as well.

In person, the new Spectre 13, which actually starts at $1,169, is an extremely attractive machine, with its reflective copper trim and clever hinge design combining to create a high-end design at a respectable price point. The notebook features a full HD 1,920 x 1,080 resolution display, as well as an Intel Core i5 CPU, 8 GB RAM and three USB-C ports in its base configuration. Importantly, two of those USB-C ports support the 40 Gbps high-speed data transfer rates offered by Thunderbolt 3.0 and all three support alternate modes for USB-C, including power delivery and display. Given the competitive nature of the PC business, others are likely to match the specs before too long. For now, it’s clear HP Inc. still has plenty of innovation to bring to the market.

Published by

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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