Mario Draghi And The European Central Bank Can’t Ignore This Chart

SAM RO

 SEP. 1, 2014

Deutsche Bank

The European Central Bank will meet on Thursday and announce any changes to its already easy monetary policy.

The meeting follows an ugly series of depressing economic reports. And amid broad evidence of slowing, it’s become very clear that inflation is getting closer to zero.

On Friday, we learned consumer prices in the 18-country eurozone climbed by just 0.3% in August, a slight tick down from 0.4% in July. Prices in Italy actually fell 0.2% year-over-year.

This lack of inflation should provide the ECB with the flexibility ease policy further.

However, the consensus is for the ECB to make no change in its policy, which includes a main refinancing rate of 0.15%, a marginal lending facility rate of 0.4%, and a deposit facility rate of -0.1%.

Deutsche Bank’s Torsten Slok is among the economists who believe ECB President Mario Draghi will act.

“It is difficult to see how the ECB next week is going to ignore the trend we have seen over the past two years in this chart,” wrote Slok in an email that included the chart above. “And note that this trend is not just driven by Ukraine or temporary factors. It is going to take some time to reverse this downtrend in European inflation and as a result US rates are going to look attractive for at least a few more months.”

Indeed, while the forces initially slowing Europe down appear to have come from within, we can’t ignore the fact that Putin’s control over Europe’s gas supply only keeps downside risks elevated.

CHART: Mobile Commerce Sales Are Growing Three Times Faster Than Overall E-Commerce

COOPER SMITH

 AUG. 26, 2014

BI Intelligence

In the U.S., mobile commerce continues to grow much faster than desktop-based e-commerce, according to quarterly e-commerce data analyzed by BI Intelligence.

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• Shopping on smartphones and tablets is exploding: Mobile commerce grew 48% year-over-year to about $8 billion in the second quarter, according to data released by comScore and the U.S. Census Bureau. That’s the fastest increase in mobile commerce since the first quarter of 2012.
• That’s three times faster than e-commerce overall: Total e-commerce grew 15.9% in the second quarter from $60.5 billion in 2013 to $70.1 billion, according to the data. E-commerce is now 5.9% of total U.S. retail sales (not seasonally adjusted), up from 5.3% during the same quarter last year. 
• One in ten e-commerce dollars are now spent on mobile:Mobile commerce now accounts for 11.1% of e-commerce, up from 8.6% during the same quarter last year. 

Smartphones and tablets give consumers the flexibility to shop whenever and wherever they want. For this reason we expect consumers to use these devices to shop more often which will lead to slower growth in desktop-based e-commerce. 

Our e-commerce coverage is full of charts and data that can be easily downloaded and put to use.

CHART OF THE DAY: People Are Looking At Their Twitter Timelines Like Never Before

DAVE SMITH

 JUL. 30, 2014

Twitter reported its earnings Tuesday, exceeding Wall Street’s expectations with $312 million in revenue — up 124% year-over-year — on $0.02 earnings per share. It exceeded predictions of 267 million monthly active users with 271 MAUs, and timeline views are at their highest ever.

According to Twitter’s data charted for us for Business Insider Intelligence, Twitter Timeline views in the most recent quarter were 173 billion — a jump from last quarter’s 157 billion views, and an even bigger jump from the year-ago quarter’s 151 billion views. As you can see, the company has been growing rather quickly over the past few quarters — Twitter CEO Dick Costolo argues the positive changes are related to changes in the company’s products, not necessarily the boost in traffic from this summer’s World Cup in Brazil.

Business Insider Intelligence

This Chart Shows The Massive Pricing Problem Facing Apple’s iPhone 6

JIM EDWARDS

 JUL. 29, 2014

Nearly 90% of people in Brazil have Android phones, and almost none of them has Apple’s iPhones, according to Kantar. That astonishing statistic, and the equally dramatic news that Android has more than 75% of smartphone market share in Argentina, Brazil, and Mexico, gives you an idea of the headwinds facing Apple’s new iPhone 6 when it launches in September:

Kantar

These are modern economies with millions of phone users but they also have huge numbers of poor consumers. Few of them will be able to afford the iPhone 6.

Yet, Apple is about to go to war with an iPhone 6 that will likely cost nearly $700 per unit. It will be competing in markets where a slew of $100 and $200 large-format Androids are about to be launched.

The Kantar numbers suggest that even Microsoft’s Windows phones actually have a greater market share than Apple’s iOS mobile devices in some Latin American countries. eMarketer has slightly different numbers, but even then it’s clear that no matter how you measure it the stats show iOS is an also-ran mobile operating system in many modern but still developing economies. In Spain, for instance, Android’s market share declined from 93% to 87% mostly because it lost share to Windows, not Apple.

This is important because as more and more of the world comes online via mobile, all the growth is going to be in poor countries. Apple doesn’t even have distribution in some of these countries. It only just opened its first store in Brazil last year.

The term “poor” here is being used in the relative, macroeconomic sense as a contrast to the “rich” countries of North America and Western Europe. To put this in perspective, per capita income in the U.S. is about $47,000 annually. In India it’s $3,560, according to the World Bank. That is significant because an iPhone in the U.S. costs $700. iPhones are nearly $1,200 in Brazil and more expensive than the U.S. in every other country where they are sold. In the U.S., you can save your wages for a couple of weeks and buy a new iPhone. In Brazil or India, you’ll have to save more than a month of your wages.

BII

If you’re an Apple user, you can say one good thing about Android: It sure helped bring down the average selling price of an iPhone, if only briefly. Average iPhone prices have gone beneath $550 since Apple began selling the iPhone 4 and iPhone 4S as entry-level models at discount prices in places like India.

Arguably, the iPhone 4 range is Apple’s competitor to cheaper Androids: It’s the iPhone you can get if you want to pay $0 down and walk out of the store with an Apple.

But now there are questions about that strategy, too. Those iPhone 4 models will be going up against the new Android One, Google’s bare-bones Android for India, which will cost $100.

Areppim

Mobile operating system market share for South America.

There are a range of Chinese companies undercutting the bottom of the market with cheap Android copies of Samsung phones. Many of them, particularly Android One, are likely to be much better value for money than an iPhone 4 or — if you’re poor and every penny counts — an iPhone 6. The cheap,modern Androids have big screens and the same apps and features as the older iPhones.

Apple’s strategy is not to care about the bottom of the market. Apple has always wanted to dominate only the most profitable, high-end section of the market where all the profits are.

The strategy appears to be working, for now. Samsung may get hurt most in the short-run — why bother with an expensive Samsung Android when a cheap Xiaomi Android will do? But a cheaper, better Android would be more of a threat to Apple than Samsung is now.

What is the point of a mobile platform that only 20% of the world uses? Most developers want their apps exposed to as many people as possible, not a select few. And why would you want a tiny old 3.5-inch iPhone 4 when you can get a 5-inch Android for the same price?

That is why it would not be a surprise to see the iPhone 5C get offered at a further discount once iPhone 6 launches. Its screen is larger than the iPhone 4 series, and it’s still a pretty good phone. But it probably won’t fall as far as $100 for most buyers — and that is where it will be interesting to see how Apple responds.