SAN FRANCISCO -- In the midst of turmoil within the Yahoo organization, the company held its second mobile developer conference in the San Francisco Bay Area. While there were several announcements in terms of product updates with Flurry, the feeling in the room wasn't that rosy at least concerning the future of the mobile development space in 2016, thanks to predictions Yahoo presented about the mobile space.
Yahoo chief executive Marissa Mayer opened up the conference to talk about the company's Flurry acquisition, saying that the platform will always be with developers. In her keynote address, she highlighted Yahoo's efforts within the mobile space, saying that now more than 800 apps are using Flurry services, up from 500 last year. What's more, 3.2 trillion sessions were logged on tracked apps in 2015 alone.
With more than 600 million mobile monthly users, Yahoo believes it has mission to offer guidance and support in the industry.
Above: Yahoo chief executive Marissa Mayer gives the keynote address at the company's 2016 San Francisco mobile developer conference on February 18, 2016.
"A year of pause and reflection"
But while Mayer offered what she hoped would set an optimistic tone for the conference, all of that was tempered when Simon Khalaf, Yahoo's senior vice president of publishing products, gave the second keynote and warned developers of the slowdown in the mobile space.
Throughout the opening hours of the event, the number 7 was reference multiple times, specifically in terms of how long it's been since mobile adoption started taking off. "It's the seventh year, and there's something about the number 7. With Web 1.0, it was the crash, so everyone is jittery," Khalaf warned. "Mobile is growing so fast. There was a phenomenal growth year, but growth rates are declining. Year over year smartphone sales decline: 6 percent in 2014 to 2015, but it's not growing as fast. Wall Street thinks that hardware is on the decline due to saturation, but there's more opportunity in software. It's the sign of a maturing industry."
"Those who sold bricks were punished, those who sold clicks were rewarded," he summarized.
While he shared numerous Flurry-powered statistics essentially that was like a State of the Industry address, he cautioned that 2016 will see a pause: "I'm calling it a year of pause and reflection -- the end of mobile 1.0. In the next year, we're going to see mobile 2.0, like the same with how Web 1.0 crashed and the movement of Web 2.0 a few years later. I believe towards the end of 2016, we're going to see the beginning of mobile 2.0 and will see another 7 years of amazing growth."
Khalaf believes that starting in 2017, there will be four areas where a "revolution" will occur: hardware, media, messaging, and in local markets. With hardware, he thinks that the next wave of evolution will be driven by phablets: "I believe phablets will be the majority of devices towards the tail-end of this year and in 2017." Khalaf believes that media will undergo a transformation in which it will be created entirely on a mobile device, specifically for the space.
As for messaging, we're already seeing this now with the rapid rise of services like Slack, all that are doing things like connecting us with one another and even being productive.
The local market will be a space where Khalaf thinks developers will flock to, especially since it's an $800 billion market. "We got global right, but local wrong," he said. In the future, the industry will move from a Yelp era to something more akin to what Thumbtack offers.
Above: Yahoo's senior vice president of publishing products Simon Khalaf on stage at the company's mobile developer conference in San Francisco, Calif. on February 18, 2016.
While some in the audience may feel that the gloomy outlook in 2016 was depressing, let's not forget that the Khalaf thinks a new era in the mobile space will take place next year. He also added this optimistic outlook: "It is the time to think and reflect, but it's the best time to build. I've seen it all the time, from valuation go down. When egos go down, productivity goes up. You get the real engineers and builders. You get to hire the kick-ass engineers who want to change the world who wants to put everything on your credit card to win."
Unabashedly mobile addicts
There are 280 million people around the world that are considered to be "mobile addicts," said Khalaf, defining this group as individuals that use their device more than 60 times a day. If you think about it as a country, it would rank as the fourth largest nation in the world, just under the United States, China, and India, an increase from eighth in 2014.
While one might think that gaming and mobile go together, data apparently shows that time spent in this segment has detracted by 36 percent annually in 2015. Khalaf blames this decrease on the lack of hits in the year and that "mobile has catered a lot to the lazy." Additionally, the rise of eSports has been an interesting phenomenon affecting mobile.
2015 was also a year where people spent more time with media on their mobile devices instead of on a traditional television. Flurry research showed that in Q2 2015, 44 minutes was spent consuming content on the small screen, up from 13 the year prior, an increase of 240 percent. Khalaf said that it took 37 years to increase the time spent on television by the length of a sitcom, but it only took nine months for mobile. The biggest audience segment making the switch: college students, ages 18 to 24 years.
Mobile isn't just taking minutes, but also money. Khalaf said that $31 billion in mobile ad revenue and $33 billion in in-app purchases were made in 2015. By comparison, in 2014, it was $23 billion and $21 billion, respectively.
Selling a new Yahoo to developers
This event takes place less than 24 hours after the company began transforming itself through layoffs and the shuttering of departments, including several of its magazines. It also comes following grim reports from The Information suggesting Yahoo's efforts to turn itself around and maybe any efforts to save a modicum of itself will be an arduous process. Internal records apparently show that three of the company's most important products -- Yahoo Mail, its homepage, and search -- are losing daily active users.
Yahoo is currently implementing an "aggressive strategic plan" aimed at either salvaging what it can of itself, or perhaps getting enough to a point that's prime for an acquisition. Marissa Mayer, chief executive, believes that doubling down on her Mavens [mobile, video, native, and social] program will help to improve Yahoo's "competitiveness, and attractiveness to users, advertisers, and partners." And perhaps rightfully so as it brought in $1.6 billion in revenue last year, a 45 percent annual increase.
The Yahoo of yesteryear has been removed as we make way for a leaner company, one that will include a focus on search, email, Tumblr, Yahoo Gemini, and Brightroll. But while Khalaf predicts slower growth for the mobile space, how will this really affect Yahoo's effort to really help developers? Also, does the company have until 2017 to hope for the next revolution?
More information:
Yahoo warns of industry-wide 'pause' in mobile growth for 2016
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