The Apps Winning the Battle For Our Attention
The Apps Winning the Battle For Our Attention Span
With the smartphone as the centerpiece of the new global consumer economy, how we allocate our screentime between the myriad of apps that exist is becoming a very telling statistic.
After all, the companies that win the battle for app mindshare will have unfettered access to billions of consumers, as well as the economic opportunities that emerge from that access.
The Duopoly vs. Everyone Else
Most know that Facebook and Google, the two tech giants that are lovingly referred to as “The Duopoly” by advertising executives, are already capturing $0.60 of every dollar spent on advertising online.
And now, through acquisitions, The Duopoly is showing that they are able to stay ubiquitous as consumers spend even more time on their smartphones.
According to recent data from Apptopia, the global app ecosystem is dominated by Facebook and Google owned apps. Together, among the top 100 apps, their products account for 54% of all screen time.
What’s up with WhatsApp?
In particular, Facebook’s showing is impressive here: users spend an average of 79 minutes per day in its apps.
What’s even more interesting is that this is mainly due to the success of WhatsApp, a company that Facebook successfully acquired for $19 billion in 2014. WhatsApp has a user base well beyond 1 billion people, and in the last three months it saw 82.21 billion hours of time spent on the messaging app – more than any other.
Here are the 10 top apps, in terms of screen time, as estimated by Apptopia:
- Google Maps
Note: May-July 2018. Data is global and includes iOS and Android. Excludes third-party app stores.
To understand the dominance of WhatsApp, keep in mind the top-viewed game over this May-July 2018 period was Clash of Clans, in which users spent 3.83 billion hours. Compared to WhatsApp’s 82 billion hours, that’s just a drop in the bucket!
Facebook owns three of the top four apps, even though the company isn’t the base of any ecosystem like Google or Apple. The question it does face however, is how it will monetize WhatsApp and Messenger, each apps with over 1 billion users.
Most Downloaded Apps
In 2017, WhatsApp was downloaded a whopping 924 million times.
Here’s how that compares to other top apps in different categories based on 2017 data:
|Category||App||# of Downloads (2017)|
|Music and Audio||Spotify||299 million|
|Games||Subway Surfers||190 million|
|Food and Drink||Subway||35 million|
As you can see, WhatsApp (and other social apps) blow away the competition from all other categories.
It’s something that Facebook is likely quite happy about, though for now it’s still hard to put a number on the value of WhatsApp to the mother company.
Nvidia Joins the Trillion Dollar Club
America’s biggest chipmaker Nvidia has joined the trillion dollar club as advancements in AI move at lightning speed.
Nvidia Joins the Trillion Dollar Club
Chipmaker Nvidia is now worth nearly as much as Amazon.
America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.
The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.
Riding the AI Wave
Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.
The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.
Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:
|Joined Club||Market Cap|
|Peak Market Cap
Note: Market caps as of May 30th, 2023
After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).
As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.
Bull Case Scenario
Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.
Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.
Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.
Bear Case Scenario
While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?
As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.
|P/E Ratio||Net Profit Margin (Annual)|
Consider how this looks for revenue of Nvidia compared to other big tech names:
$NVDA $963 billion market cap, 38x Revenue
$MSFT $2.5 trillion market cap, 12x Revenue$TSLA $612 billion market cap, 7.8x Revenue$AAPL $2.75 trillion market cap, 7.3x Revenue$GOOG $1.6 trillion market cap, 6.1x Revenue$META $672 billion market cap, 6x Revenue pic.twitter.com/VgkKAfiydx
— Martin Pelletier (@MPelletierCIO) May 29, 2023
For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.
Nvidia’s Growth: Will it Last?
This is not the first time Nvidia’s market cap has rocketed up.
During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.
As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.
By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.
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