The world keeps moving faster and faster. It’s increasingly hard to filter out the most important 'signals from the noise' with the time we have available. Below is a summary of the most interesting and relevant topics that have passed through my signal filter over the past week.
Six of the big tech giants all reported on their fourth quarter earnings this week, and it makes for a fascinating case study on the way consumer behavior is evolving. There are several strong lessons here for businesses of all kinds, so it's worth reading between the lines to see where we are headed.
Firstly, Apple. The company's first quarter was its biggest so far, at $74.6 billion in revenue and $18 billion in profits. And it's continuing to grow. The iPhone is the big cash cow here at 69% of total revenue - they are creating and selling 75 million of them each quarter, bolstered by the introduction of the bigger screen Plus (which turns out to be a very good move).
With the iWatch launching soon, Apple will own screens of every size, and are proving how much the world is shifting to be mobile first.
Microsoft isn't dead yet. It's still huge, growing and profitable. The company is making a slow (and very big) transition to a cloud subscription model, but what's crazy is how profitable the old subscription model remains in the market. Cloud subscription will remain a big deal moving into the future.
Google is massive, but its $18 billion in profits was below analysts expectations. It is interesting to see the core paid click business is faltering a bit due to shifts to mobile, as consumers prefer apps in this space. Search is also being threatened by a lot of new players from all angles. This however is being bolstered in other ways, with YouTube revenue growing by more than 100%. YouTube and video are going to be huge this year.
Amazon is up a lot more than expected, posting a very rare quarterly profit. The main driver behind this is Amazon Prime, which is providing to be a hugely lucrative 'moat' strategy. Prime users are super loyal, and order twice as much as non-subscribers, and pretty much order everything and anything with the service. A great example of understanding your customers lifetime value, and investing in loyalty.
Yahoo didn't grow, but spun off its very lucrative stake in Alibaba, the Chinese e-commerce giant as a separate entity. They still feel like they have an identity crisis; it will be interesting how they evolve.
Lastly, Facebook. The company has made a phenomenal shift to mobile, understanding consumer behavior perfectly. Mobile now represents 69% of total ad revenue. User growth has slowed, but they are extracting more revenue per user. And it is really emerging as a video streaming platform, with 3 billion videos watched per day - expect the platform to shift in new ways to adapt to this.
As seen in Google's earnings, YouTube is becoming a monster of a platform. Last year the highest paid earner made $4.9 million dollars - and they did it simply unboxing Disney toys.
Last year, iOS app developers earned more than Hollywood did from the box office in the US. Apps are swamping other forms of entertainment in a massive way, and consumer expectations are forever changing.
Interested in the financials around building app games? The team behind the beautiful Monument Valley reveal the cost and reward of creating their hit application.
Google Ventures have updated their Design Sprint methodology into a handy blueprint. Also, keep an eye out for the upcoming book on the subject.
A great article on the dozen lessons learned from Chris Dixon on Venture Capital and Startups. Great advice for entrepreneurs and savvy business people.
To finish up, Squarespace really won the Internet this week with their new advertising campaign. Sleeping Tapes sees Jeff Bridges release an album designed to help you fall asleep. Not only is it crafted exceptionally well, it does what all brands should be doing - creating a great product, and then selling it by providing real, tangible utility.