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Mobile Watch: Investment in VR/AR Breaks New Record

Mobile Watch this week

  1. Investment in VR/AR Breaks New Record
  2. Google’s AlphaGo Defeats Human Go Champion
  3. The North Face to Launch Watson-Powered Shopping Assistant
  4. Larger Ad Spend in Mobile to be Expected In 2016
  5. Google’s Project Fi Goes Mainstream

Investment in VR/AR Breaks New Record

Digi-Capital-AR-VR-investment-Q1-2016-to-date-1024x576USD1.1 billion: this is the amount of money invested in Augmented Reality (AR) and Virtual Reality (VR) since the beginning of the year, according to Digi CapitalThis is the first time that AR/VR investment has reached a billion dollars in any year, according to the analyst firm. The amount compares to USD700 million invested in all of 2015. Magic Leap accounts for USD800 million of the total USD1.1 billion invested so far this year. But even without Magic Leap, VR/AR investments were up 20 percent quarter on quarter. AR/VR is forecast to generate USD120 billion in revenue by 2020.
Source: Digi Capital

Why it matters
2016 has been heralded as the year VR would go mainstream. These investment numbers indicate we are only at the beginning of this revolution. As investments translate into new functions, products and services next year, this makes 2017 look like a potentially more interesting VR year than 2016.

Google’s AlphaGo Defeats Human Go Champion
The game of Go has been very difficult for computers to crack because of the huge amount of potential moves it involves. Google’s DeepMind Artificial Intelligence (AI) program AlphaGo defeated this week Lee Sedol, the best Go player in the world, in the first of five matches. You can follow all the matches here.
Source: Business Insider

Why it matters
Google’s AI victory over the world’s leading Go player is a major milestone for AI, not least because AlphaGo uses general machine learning techniques to figure out for itself how to win at Go.

The North Face to Launch Watson-Powered Shopping Assistant
Outdoor clothing retailer The North Face is to launch a Watson-powered mobile app in April. The personal shopping assistant will let users interact with IBM’s artificial intelligence computer, helping them to find exactly what they are looking for by asking them questions. The technology generated a 60 percent clickthrough rate to try product recommendations during its two-month testing period, according to VentureBeatIt took Oakland design agency Fluid 12 months to build the Watson-powered experience.
Source: Venturebeat

Why it matters
It is the first AI-powered mobile shopping assistant in retail, but it certainly won’t be the last.

Larger Ad Spend in Mobile to be Expected In 2016
In total 87 percent of marketing decision-makers say they intend to increase mobile budgets this year. They expect that on average 43 percent of their marketing budget will be spent on mobile channels in 2016, according to a survey conducted by Keiton Global on behalf of Retail Me Not. Offline and non-mobile digital budgets are  poised to decrease by 14 percent and 9 percent respectively. Yet, investment growth within location-based mobile services is almost at a stand still, even falling to the bottom of retailer priorities in 2016, the survey found. Two hundred marketing decision-makers were interviewed for this survey.
Source: Retail Me Not

Why it matters
Marketing decision-makers have said in years that return on investment (ROI) on digital marketing is higher than on traditional offline marketing, according to Retail Me Not. Now is the time for marketing decision-makers to put their  money where their mouth is. The question is whether ad spending is moving fast enough towards mobile to keep brands top-of-mind among consumers that are increasingly mobile. 

Google’s Project Fi Goes Mainstream
Ten months after introducing MVNO Project Fi, Google has now decided to open the programme to every US citizen. ”While Project Fi is still in its early stages, we’re excited to welcome our next wave of customers and look forward to growing and improving together,” said Simon Arscott, Product Manager, Project Fi in a blog post.

Here are some insights gathered by Google during the first ten months of the project:

  • More than 15 percent of Fi customers have used their plan abroad.
  • Over 50 percent of Fi customers connect to public hotspots using the service’s Wi-Fi Assistant on a weekly basis.
  • About 90 percent of Project Fi’s app users check out how much data they have used and on average they use 1.6 GB data per month.
  • People are using the data-only SIMs launched in December on multiple devices, including tablets and cars.
  • Project Fi customers prefer getting support via real live persons
    Source: Google

Why it matters
Google not only announced it would open up Project Fi to everyone in the US, but also announced a special offer combining sign-up with a Nexus 5X for $199 for a month, almost half its current price. Project Fi is therefore a great way for consumers to get their hands on the Nexus device at a bargain price while testing Google’s MVNO service. It could prove a good way to lure US customers away from Apple. Furthermore, while Fi may not compete directly on price with operators, it does use a new way of combining wireless network and wifi technology. Operators should pay attention.

Expect Single-digit Growth for Smartphones
The double-digit smartphone market growth is over, according to Kantar WorldPanel Comtech and IDCWith a mobile penetration of 91 percent in the US and Europe‘s Big Five Countries (EU5) and 97 percent in urban China, nearly everyone now has a mobile phone, states Kantar WorldPanel Comtech. Smartphone penetration is high too, at 65 percent in the US, 74 percent in Europe and 72 percent in urban China. And in mature markets, the profitable high end of the market is saturated, according to the analyst firm. But there is some hope left for smartphone vendors such as Samsung and Apple as nearly 50 percent of smartphone owners in the EU5 are actually planning to upgrade their smartphone over the coming 12 months. In the US, the number is 46 percent and in urban China 28 percent.
Source: Kantar WorldPanel ComTech

Why it matters
Looking back at Mobile World Congress 2016, nothing revolutionary was presented in the smartphone space making convincing existing smartphone users on specifications a tough sale. Vendors will have to persuade users to switch or upgrade through better (if not revolutionary) devices, the power of their brands and community. Or by adding a companion device just like Samsung does with its Gear VR.

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#MWC16: It’s a Wrap!

This year, I covered Mobile World Congress, and in particular its sister startup event 4YFN (Four Years From Now), for Mobile World Live’s Show Daily. Not a dull second for sure, alternating interviews, keynotes and panel sessions as 4YFN broke new attendance records.

Collaboration is the word that summarizes best my overall impression. It often requires multiple organizations and multiple skill sets, no to mention complementary mindsets, to satisfy the need of a specific market segment. Many of the startups I met were indeed much into B2B2C, trying to identify the right partner (often a larger enterprise or tech company) in order to break new grounds and scale quicker.

You can find the Show Daily’s coverage of MWC & 4YFN here or by edition below. 

See you at MWC next year!

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