Loup Ventures Podcast

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**Loup Ventures Podcast**

We publish research on frontier technology, the themes driving it, and the companies making it a reality. This podcast includes audio versions of select research notes.

Latest Episodes:

**Would You Let a Robot Do These 12 Jobs?** Apr 07, 2017
Show notes

This week we attended Automate, a robotics trade show in Chicago focused on manufacturing and fulfillment. As we explored the show floor, we saw a number of robots able to work next to humans for an affordable cost of $30-$40k each. Most vendors claimed less than a 12 month payback period. Automation is now in reach for many businesses, and they are slowly becoming comfortable implementing robots, in part for the cost advantage and part out of necessity to find labor.

We left the show with two questions. First, are we too conservative to believe it will take 30 years for 70% of human jobs to be replaced by robots? Short answer: we’re optimistic and should have a better idea of how quickly automation will come over the next few years. Second, how comfortable are consumers allowing robots to do certain jobs? To address this question, we surveyed 500 average consumers in the US and asked them to rate their comfort level with robots performing 12 specific tasks.

**Survey methodology.** We asked survey takers across a mix of age and income demographics to rate their comfort level with robots performing various tasks on a scale of 1-5: 1 being extremely uncomfortable, 3 being neutral, and 5 being extremely comfortable. We surveyed jobs in four categories: time-consuming chores, transportation, personal/family livelihood, and professional services.

**Time-consuming chores.** We found general acceptance in robots performing daily, relatively safe, *time-consuming chores* such as vacuuming, mowing the lawn, or preparing food. Of all of the four categories of jobs we surveyed, the time-consuming chore category was the most positively viewed. This may be because these tasks have low downside if a robot fails to do them well; you just end up with a poorly vacuumed house, a butchered lawn, or a bad meal. The 30-44 age bracket, or loosely *late millennials*, consistently indicated the highest levels of comfort with this category (and most categories), while the 18-29 demo, or *early millennials*, surprisingly saw less benefit to robot vacuums or meal-makers – perhaps because many in this demo don’t perform the tasks themselves (see tables below).

**Transportation.** Our survey results indicated a general indifference to a robot controlling a subway or train ride, but less comfort with driving a car or piloting a plane. We believe this relates to the relative risk of downside due to robotic failure as mentioned in the prior section. It’s hard to imagine a catastrophic subway accident, but easy to imagine a major car accident or downed plane. Interestingly, the 40-59 demo, or *Gen X*, was the most uncomfortable of the demo groups, with on average 65% of responses indicating uncomfortable or extremely uncomfortable. We suspect relatively risk-averse Gen X upbringings and presence of young or teenage children may account for these results.

**Personal/family livelihood.** Given the discomfort in letting a robot drive a car, it’s not surprising that most people aren’t ready to let robots do even more personal tasks like perform surgery or babysit. Again, downside risk to robotic failure is very apparent for both of these tasks, thus the lean toward discomfort. While babysitting requires empathy, which we view a one of the three key advantages humans hold over robots in addition to creativity and community, robots should theoretically be better surgeons than humans. Robo-surgeons have steadier and more precise instruments and can process more data about the body simultaneously than a human surgeon. Consistent high levels of discomfort to this category are seen across all demographics. Robo-babysitters scored an average of 20 points higher on the discomfort scale vs robo-surgeons.

**Professional Services.** Survey respondents were generally uncomfortable in relying on robots to perform professional services aside from personal training. We feel this again relates to risk. While there is no mortal risk to poorly performed taxes or legal services, there is a risk of financial cost from those failures. The 18-29 year old demographic showed the most comfort using robo-accountants or robo-lawyers.

Overall, we have some trust to build between consumers and robots to get to the automated future we envision, particularly with tasks perceived to be “dangerous.” As humans come to accept that robots can perform almost all “dangerous” tasks with greater safety than humans, the associated comfort levels should rise.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

**AI’s Busted Bracket** Apr 03, 2017
Show notes

The Loup Ventures NCAA bracket contest isn’t as hotly contested as we thought it would be. We entered Bing’s AI bracket into our pool, and it’s just as busted as the others. In fact, Bing’s bracket will finish at the bottom of our pool, in 7^th place, regardless of the outcome of tonight’s game. We would like to think that we outsmarted AI, but the reality is that predicting the outcome of the NCAA tournament is more a matter of luck than skill. Bing’s performance doesn’t mean it’s broken, just unlucky this year.

* Bing Predicts 2017 NCAA Basketball Bracket

To date, Bing has chosen 39 out of 67 games correctly, including the opening round. Bing was 2 of 4 in the opening round, 24 of 32 in the 1^st Round, 9 of 16 in the 2^nd Round, 4 of 8 in the Sweet Sixteen, before going 0 for 4 in the Elite Eight and ending its chances at victory. If you look at Bing’s bracket now, it will show a different story, because it re-picked winners for matches after each round. Even with this adjustment, it only picked 47 of 66 games correctly, leading into tonight’s game. In the adjusted rounds, Bing chose Final Four weekend right with Gonzaga and UNC as winners, with UNC ultimately taking home the crown.

**How does Bing predict winners?** First, it’s important to understand how Bing predicted its winners. The Bing Predicts algorithm factors in millions of data points in an effort to create the best predictive model. The algorithm looked at every college basketball game played in the last 15 years in an attempt to analyze correlations between measurable statistics and wins. The algorithm will give an output of the likelihood in which a team will win the game. It’s not meant to choose a certain winner, but the higher the percentage, the greater the disparity amongst the teams.

Walter Sun, an architect of the Bing Predicts algorithm, was asked by Wired Magazine about some of the important considerations in the algorithm. Defensive efficiency, strength of schedule, coaching rankings, and miles traveled were a few of the metrics that the algorithm measures.

For defensive efficiency, strong defensive teams have had more success in the tournament historically. For strength of schedule, the theory is that the seeding committee favors Power 5 conference teams, which leads to schools in smaller conferences being underrated. For coaching ranking, experienced coaches have a big impact on the success of their teams in the postseason. For miles traveled, teams that travel farther have a harder time winning, especially when they travel across time zones.

While it’s helpful to understand some of the metrics driving the Bing Predicts algorithm, taking a closer look at AI explains why the cards are stacked against Bing.

**Why didn’t Bing give better advice?** The probability that Bing assigns to any given team winning is very likely the most accurate prediction possible, but a probability is still a probability. If Bing says a team has an 80% chance to win, that means it has a 20% chance to lose. But picking winners in a bracket is binary. You are choosing a team to win, period. If the 20% chance happens, brackets are bound to be busted happens – and with 69 games to predict it’s almost a statistical guarantee.

Bing could be better at NCAA predictions if it was able to collect data about future events leading up to the game. What will the hydration level of each individual player be at game time, how much rest did each player get the night before the game, what is going on with each player psychologically, etc. All of these incremental factors would influence what historical data predicts if it were possible to be known by Bing. Even then, every possession of the game can be influenced by random events and the flow of the game changes the probability of how teams play later in the game. The Patriots’ epic comeback in the Super Bowl is a perfect example. They had a 99%+ chance to lose, which means they had a less than 1% chance to win, but not a 0% chance to win.

**What does this mean for the future of AI?** We shouldn’t overreact. Every action we take as humans could be viewed as a predicted potential outcome and sometimes predictions are wrong. Take driving as an example. Every action we perform while driving is based on a predictive calculation in our heads about where we want the car to go and how to get it there. 1.3 million people die every year in traffic accidents, so we aren’t very good at those predictions. Machines already drive better than humans, because they don’t get distracted by phones or emotional about bad drivers.

While skeptics may laugh that the robots failed at predicting the outcome of a basketball tournament, AI is still a better predictor of outcomes than any human because of the amount of data it can incorporate in its prediction. We shouldn’t expect AI to be right 100% of the time because it won’t be, but it will be right more often than humans making the same predictions. Humans got lucky with our brackets this year, but shouldn’t expect an easy repeat next year.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

**Feedback Loup: Google Daydream** Mar 31, 2017
Show notes

Google’s smartphone-powered VR platform, Daydream, represents the company’s most significant push to date in its effort to accelerate the adoption of VR. We’ve spent the last few weeks testing the platform with a Pixel phone and a Daydream View headset. Bottom line: Daydream isn’t there yet, but the platform establishes a solid foundation for the future of “low-immersion” VR.

Along with Samsung’s Gear VR platform and Google Cardboard, we continue to believe these smartphone-powered, low-immersion platforms will drive the global VR user base above 100m by 2018. We expect the vast majority of VR users will be using low-immersion VR over the next several years. Low-immersion platforms are the on ramp for high-immersion VR platforms like the Oculus Rift and HTC Vive, so it is important to understand the low-immersion platforms of today in order to anticipate broader high-immersion use and the future of VR more broadly.

Hardware, software and content are all critical components for the future of VR, but our experience with Daydream left us feeling that content represents the biggest near-term opportunity to show the power of VR.

**Hardware:** Daydream is powered by Daydream-ready Android phones running the Nougat operating system. Currently, there are 4 Daydream-ready phones, including Pixel, with (many) more on the way. After a month-long wait, we used a Pixel ($649) for our testing of the Daydream platform. These phones pair with the Daydream View headset ($79), which is the best smartphone-powered VR headset we’ve ever used.

Daydream View is the best VR headset we’ve ever used.

Unlike some headsets we’ve tried, Daydream View is wearable. The soft fabric and angled head strap are clear signs of thoughtful design, built for wearability. Plus, in what seems like an industry first, it’s even comfortable for users with glasses. Daydream View comes with a remote control that we found easy to set up and intuitive to use. The remote conveniently nests in the viewer when not in use. Sound can be heard directly from the phone’s speakers, but it’s more immersive to use the easily accessible headphone jack on the Pixel.

The only drawbacks we found with the Daydream View + Pixel combo were: 1) Heat – the Pixel gets very hot after about 20 minutes of use. Not hot enough to cause concern or discomfort inside the headset, but noticeable when you remove the phone from the headset and put it back in your pocket. 2) Light – some users noticed light coming into the headset near the nose area, which can interrupt immersion and remind the user that he or she is in a virtual environment.

**Software:** Daydream requires Android 7.0+ “Nougat” operating system, which represents just 3% of all Android users today. Google Play is your destination for Daydream apps. Our favorite was Youtube VR. The experience is immersive and the recommended content is created for VR. Other content apps, Like Netflix VR, are simply virtual environments in which to view 2-D content. Some of the games were fun, but seem to be more proofs of concept vs engaging, fully developed products. We think that VR will play an important part in the future of casual gaming and expect more development there as the platforms become more widespread.

**Content:** Overall, the app library is just enough for users to see the value in key use cases including gaming (check out Wonderglade), theatrical content (check out Youtube VR) and, increasingly, live content (check out the NBA via NextVR). The library shows early hope for great VR content experiences – but more content built specifically for VR will support a growing user base as Daydream-ready phones proliferate.

Google Cardboard feels like a throwaway – not Daydream. Google’s emerging platform offers a true competitor to Samsung Gear VR. Both of these low-immersion platforms will accelerate growth in the VR user base by making it accessible to millions of users with smartphones. As content follows, users will be exposed to the use case of VR and compelled to use high-immersion systems that will lead us into the future of VR.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

**Apple Services Tracking To 20% Of Revenue In Five Years** Mar 28, 2017
Show notes

**Apple Services Through 2022**. We have written about the need for Apple to reinvent itself in the next decade through services and AR. The Services reinvention is already underway, accounting for 11.6% of revenue in 2016, and closer to 18% of profits. Today we are rolling out our 2022 Services model, and estimate services revenue will account for 20% of Apple’s sales in five years, 30% of profits and growing at 15% annually. For comparison, we estimate Apple’s hardware sales will be growing at about 5% in 2022. This translates to $60B in 2022 Services revenue up from our estimate of $30B in 2017. This growth will in part be maintained by App Store revenue from Apple’s advancement of augmented reality (AR) that will be the company’s next major development platform. We expect AR will be a key feature in the upcoming iPhone X release (more on that here), which will slowly build developer enthusiasm for AR apps.

**Beyond 2022.** Apple should easily hit its stated goal that its Services business will become a Fortune 100 company sometime in 2017. Thinking about Services beyond 2022, we believe Services will have a steady 10% growth, and account for three quarters of Apple’s overall growth. This will be driven primarily by the App Store, Apple Music + Content, with all three areas strongly benefitting from the addition of AR.

**App Store.** By 2022, we expect App Store revenue to account for 44% of Services revenue and be growing at 14% annually, due to Apple’s continued leverage of revenue share with developers. Apple will continue to see App Store revenue account for a major portion of total Services revenue. The emphasis on AR capabilities in the iPhone X will be the next foundation for developers, creating an even playing field for creation and distribution of AR content. It’s worth noting that we don’t expect an acceleration of App Store growth from AR; rather, developers will view adoption of AR as fundamental to a mobile experience, and a necessity to maintain existing users and compete for new ones. Our App Store growth goes from 29% in 2017 to 14% in 2022.

**Apple Music + Content.** By 2022, we expect Apple Music + Content revenue to account for 23% of Services revenue, growing at 30% annually. We remain optimistic on the future of Apple Music. Despite a rough start, Apple has steadily built its music subscriber base to roughly 25m (as of Feb. 2017). By the end of 2017/early 2018, we expect Apple to begin offering additional video content as well, including its own original content (more on that here). While this pursuit adds Apple to an already tight freeway of content producers and providers like Netflix and Amazon, Apple’s combination of AR and VR related hardware and content could offer some differentiation.

Growth in this segment is ultimately dependent on Apple’s investment in the quantity and quality of its content, en route to its internal goal of 100 million Apple Music + Content subscribers by 2022. Apple is well on its way to achieving this target with roughly 25m music-only subscribers to date, while the preponderance of future subscriber adds will need to come from a hybrid music/content offering.

**iCloud.** By 2022, we expect iCloud revenue to account for 13% of Services revenue, growing at 15% annually. Apple’s iCloud business will continue to scale with continued growth in devices, users, and devices per user. In addition, natural storage pricing declines will continue to attract more users to the service.

**iTunes.** By 2022, we expect iTunes revenue to account for 8% of Services revenue, declining 10% annually. iTunes revenue will continue to naturally decline as music and video streaming subscription services grow. Roughly half of iTunes revenue is from music purchases, while the other half is from video content. As more video is added to Apple Music/TV, iTunes revenue declines will accelerate.

**Licensing.** By 2022, we expect Licensing revenue to account for 6% of Services revenue, growing at 12% annually. Apple derives most of its licensing revenue from Google, as Google pays to have its search engine as the default in Safari. In addition, Apple licenses many of its patents to other smartphone manufacturers, such as Samsung. This revenue should continue to grow steadily in the future as other parties will continue to rely on Apple’s platform and patented technology.

**Apple Care.** By 2022, we expect Apple Care revenue to account for 5% of Services revenue, growing at 10% annually. Apple Care will remain an important contributor to Services revenue. Apple Care has benefited from the launch of the iPhone upgrade program. Apple Care subscriptions should continue to scale commensurate with increasing iPhone ASPs and popularity of upgrading more frequently.

**Apple Pay.** By 2022, we expect Apple Pay revenue to account for 1% of Services revenue, growing at 40% annually. Despite its fractional contribution, Apple has seen a lot of success with the Apple Pay platform in just the past year. User growth has tripled to nearly 12m monthly users, while transaction volumes increased by approximately 500%. This is clear evidence of growing user adoption of Apple Pay, as well as growing contentment with the service as a frequent and preferred payment method. See our recent analysis of Apple’s progress with Apple Pay here.

Apple’s adoption of AR will add an entirely new dimension to Apple pay. For example, iPhone X owners can eventually use their phones to view a product, get pricing comparisons, or even complete an order. Imagine going into a store and seeing the perfect shirt, only to realize that the size you need is not in stock. At this point, a shopper has to track down a sales associate, explain what product and size they want, and then fill out shipping and payment information at a register. With AR, a user could simply capture the item, and automatically navigate to product checkout on their device. Users will already have shipping and payment information stored in Apple Pay, simplifying the process and removing any need for interaction with a sales associate – a rather seamless transaction for the consumer.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

The Five Senses of Computing Mar 21, 2017

Show notes

The trend in computing towards more natural user interfaces is unmistakable. Graphical user interfaces have long been dominant, but machines driven by more intuitive inputs, like touch and voice, are now mainstream. Today, audio, motion, and even our thoughts, are the basis for the most innovative computer-user interaction models powered by advanced sensor technology. Each computing paradigm maps to one or more of the five human senses; exploring each sense gives us an indication of the direction in which technology is heading.

Sight – Graphical User Interface

The introduction of the graphical user interface (GUI) drove a step function change in computers as productivity tools, because users could rely heavily on sight, our dominant sense. The GUI was then carried forward and built on with the advent of touchscreen devices. The next frontier for visual user interfaces lies in virtual reality and augmented reality. Innovations within these themes will further carry forward the GUI paradigm. VR and AR rely heavily on sight, but combine it more artfully with other inputs like audio, motion, and touch to create immersive interfaces.

Touch – Touchscreen Devices

PCs leveraged basic touch as a foundational input via the keyboard and the mouse. The iPhone then ushered in a computing era dominated by touch, rejecting the stylus in favor of, as Steve Jobs put it, “the best pointing device in the world” – our fingers. Haptics have pushed touchscreen technology further, making it more sensory, but phones and tablets fall well short of truly immersive computing. Bret Victor summarized the shortcomings of touchscreen devices in his 2011 piece, A Brief Rant on the Future of Interaction Design, which holds up well to this day.

More fully integrating our sense of touch will be critical for the user interfaces of the future. We think that haptic suits are a step we will take on the journey to full immersion, but the best way to trick the user into believing he or she is actually feeling something in VR is to manipulate the neurochemistry of the brain. This early field is known as neurohaptics.

Hearing – Digital Assistants & Hearables

Computers have been capable of understanding a limited human spoken vocabulary since the 1960s. By the 1990s, dictation software was available to the masses. Aside from limited audio feedback and rudimentary speech-to-text transcription, computers did not start widely leveraging sound as an interface until digital assistants began to be integrated into phones.

As digital assistants continue to improve, more and more users are integrating them into their daily routines. In our Robot Fear Index, we found that 43% of Americans had used a digital assistant in the last three months. However, our study of Amazon Echo vs. Google Home showed that Google Home answered just 39.1% of queries correctly vs. the Echo at 34.4%. Clearly we’re early in the transition to audio as a dominant input for computing.

Hearables, like Apple’s AirPods, represent the next step forward for audio as a user interface.

Through Siri, AirPods can handle information requests, dictation, media control, and phone calls; meanwhile, quick glances at the Apple Watch on your wrist will suffice for most notifications. All of this means that your phone stays in your pocket. There’s more from us on AirPods here, but we believe audio as a UI is a key enabler of augmented reality technology and the future of computing. As your “device” becomes a seamless overlay of digital information on the real world, non-visual inputs like audio and motion become critical components to interacting with that device.

Smell & Taste – Advanced VR

Let’s not leave out smell and taste. The pinnacle of VR and AR experiences will include all five senses, not just sight, sound, and sometimes touch like we see today. As noted above, neurohaptics will ultimately enable lifelike touch experiences created by direct influence on the brain. The same neurochemical manipulation will be capable of enabling smell and taste. This form of advanced VR carries the promise of truly multi-sensory computing, making our digital experiences much more lifelike than previously imagined, perhaps indistinguishable from the real thing.

As we track the arc of computing technology over the past few decades and peer into the future, it clearly bends towards more advanced user interfaces. Bringing all five senses together into a fully immersive future of computing. A future in which we interface with machines and each other in completely new ways.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Feedback Loup: College Panel Mar 08, 2017

Show notes

We recently hosted a panel of 8 college students from the University of Minnesota. The goal was to better understand how millennials think about social media, communications, video, VR, AR, the selfie generation, the future of work, and privacy. Here’s a summary of what we learned:

Text Is Dying

Quote: “Texting replaced email, and photos have replaced text messages”.
Message: Text is being used less frequently by each of our panelists. They view text as a formal way to communicate. Snap, Facebook and Instagram are the preferred communication platforms, with Facebook settings being switched to photos only. The panelists mentioned tech platforms promoting messaging within games as a way to maintain usage.
Takeaway: Text is slowly going away, replaced by video and photos. Text is viewed more as a formal way to communicate.

Fake News

Quote: “I like Snap for news.”
Message: Our panelists get their news from a wide variety of sources. 7 of 8 panelists are not concerned about fake news. Snap was the most popular way to aggregate news from traditional sources (3 of 8), followed by mainstream news outlets; e.g., CNN and WSJ.
Takeaway: Professional news is still respected but not paid for by these college students.

The Future of Work

Quote: “It’s scary. If we can’t have cashiers, truckers and fast food jobs. . . how will people live?”
Message: College students know they are entering a workforce that will have dramatic changes over the next 30 years. They have concerns about who’s going to control everything as resources become more concentrated. The University of Minnesota offers a class titled “Size of the Future” that addresses the risk of job loss to automation. The group did consider these changes when thinking about a career, with an increased interest in a more technical education that feels more defensible. Ultimately these students believe that the negative impact of lost jobs will be partially offset by the positive impact of new industries being formed.
Takeaway: College students understand that the workforce is changing. They envision social challenges emerging from displacement of workers with lower levels of education. But they believe a college education will ensure that their futures are safe.

It’s All About Photos

Quote: “I wouldn’t tell you about my day in words on Facebook, but would through a photo on Snap.”
Message: The panelists love Snap for three reasons: 1) they want to communicate through photos, 2) filters and geo tags enhances those photos, and 3) Snap is a tighter social network for most (fewer parents). As for Snap Spectacles, 8 of the 8 panelists think it’s weird to walk around with video glasses. However, they acknowledged that if enough people start using Spectacles, then they would adopt the technology. The $130 price for Spectacles is too high; just 1 of our 8 panelists said they would be interested in buying a pair at $50.
Takeaway: The Snap story experience has won the college demo. Spectacles are a work-in-progress that will eventually go mainstream as pricing comes down.

The Selfie Generation

Quote: “Who doesn’t like talking about themselves?”
Message: One insightful panelist shared a belief that everyone, regardless of generation, has a desire to talk about themselves. But other panelists agreed that the self-promotion is amped up in their generation because they grew up on social media. Using social media enables this core human desire. Social is a way to share your thoughts and an open invitation to talk to other people. The panel refuted the belief that they have a difficult time communicating face to face, pointing to the fact that all ages are glued to their phones. As for work ethic, while its true they don’t prefer a traditional work environment, that does not mean that they’re lazy. This is the generation that adapts and will figure it out.
Takeaway: This generation grew up on social media and while they like talking about themselves, there is self-policing that keep narcissism in check. If you talk too much about yourself, you get tuned out.

Phones

Quote: “I get a new phone when my contract is up”
Message: The panel consists mostly iPhone owners committed to the iPhone. 7 out of 8 have iPhones and of the 7, all said their next phone will be an iPhone. The Android user switched from iPhone 3 years ago because he feels Android is a more flexible platform. The typical upgrade window is when their contract is up, which tends to be every 2-2.5 years.
Takeaway: iPhone continues to dominate the college market, and the iPhone franchise appears to be intact with repeat buyers. The AR features of the iPhone X this fall generally did not appeal to our panelists. The biggest factor in timing of upgrades is their wireless contract.

Snap & GroupMe

Quote: “Snap puts something out and I won’t think it’s cool. Then everyone will start using it and I’ll appreciate it.”
Message: Snap is the preferred social platform for our panelists (4 of 8), followed by Instagram (2 of 8). They like that Snap is a real time story of your day, and it’s better to see faces than text messages. Our panelists send 10-50 snaps per day. Professors take note: Your lecture has competition. We heard a recurring theme that Snap is a great distraction during a boring class. Separately, GroupMe is clearly the leader in the group messaging category.
Takeaway: Snap has the lead and, more importantly, Snap has won the trust of the college demographic.If Snap puts something out, it will likely catch on. We believe the camera is at the center of how Snap must advance the platform with new devices and new features to stay ahead of Facebook’s improved filters. If Snap slows on its vision as a camera company, Facebook will likely catch them.

Dating Apps

Quote: “[Dating apps are] not used in class like I use Snap in a class.”
Message: We were surprised that most of the panel gave Tinder and Bumble the cold shoulder. Tinder appears to have two purposes: 1) a way to meet someone for a short term relationship; 2) the group browsing option for a maximum of four people. They use Tinder as as a weekend joke with friends to “send weird messages to people that we really don’t know.” Our panelists knew of Bumble, but did not use it.
Takeaway: Dating apps are popular as a way to kill time and are a niche market for millennials.

Video

Quote: “Everyone shares Netflix passwords.”
Message: Netflix is the preferred long form video platform with YouTube and Facebook favored for short form video. Amazon Prime, HBO, and “streaming apps” represent a minority of usage. 7 of the 8 panel members said they “know someone” who shares a Netflix password. As expected, TV by appointment is a thing of the past.
Takeaway: There seems to be a hard line between long and short form video. Netflix still owns the long form market, with Facebook video growing quickly in short form, gaining some share from YouTube. This demo gives social platforms the benefit of the doubt, so YouTube must weigh how to combat a growing Facebook and Snap video offering.

VR & AR

Quote: “I want to do more with [VR].”
Message: 4 of 8 have tried VR. They view VR as a novelty, with little repeat usage. 7 of 8 panelists feel that VR and AR are here to stay. Price is less of an issue because there are cheap ways to use VR today. More compelling experiences are needed to drive repeat engagement. They saw gaming space as an interesting opportunity for VR. As for AR, only 1 of the 8 panelists have given it any thought. The concept of what AR will bring is still confusing (even though they use Snapchat filters daily). All eight panelists have the perception that AR in the next iPhone is not compelling enough of a feature to get them to upgrade.
Takeaway: VR and AR have a long way to go, but we will get there. The students see the conceptual value of VR and are struggling with what’s exciting about AR. Despite these concerns, the group has an insatiable appetite for technology. They will continue to experiment with AR even though the experiences and use cases will be limited for the next few years.

A Post-Privacy World

Quote: “We’re fine with people taking a Snap video of us.”
Message: Our panelists are laid back when it comes to privacy. For example, it’s OK if, at a party, a stranger takes a Snapchat video of them, just as long as it’s for Snapchat, and somehow they can tell if the person is posting on Snapchat. In terms of data security, our panelists don’t think twice about online transactions.
Takeaway: We live in a post-privacy world. Everything that happens may be known. College students know it and the rest of us need to come to terms with it. Today everyone walks around with a camera in their pocket. In the near future it will be a wearable camera.