In the part 2 of our year-end podcast, we build on our earlier conversation about five major events that rocked Asia in 2015 and make our predictions for 2016: (a) Consolidation of on-demand cab hailing apps, (b) Robots (like Softbank's (OTCPK:SFTBY) Pepper) target businesses before moving on to the consumer market while value flows to data/artificial intelligence, (c) Nintendo (OTCPK:NTDOF) (OTCPK:NTDOY) faces innovator's dilemma, (d) Xiaomi's expansion and (e) Facebook (NASDAQ:FB) faces challenges in Asia.
Here are the interesting show notes and links to the discussion (with time-stamps included):
Prediction 1: Venture capital firms push for consolidation of on-demand cab hailing apps across Asia. [0:54]
- Reality dawns in unicorn world as unit economics come into focus, leading to consolidation and possible down rounds for e-commerce and on-demand taxi hailing apps.
- Overheated markets become commoditized, value shifts to adjacent layer of value chain, e.g. in India, focus shifts from e-commerce to supply chain and logistics. For example, Shotang, a B2B marketplace connecting unorganized retailers to distributors (disclosure: Sameer previously led a seed investment round into this company)
Prediction 2: Robots (like Softbank's Pepper) target businesses before moving on to the consumer market. Data and machine learning focused companies become gatekeepers. [7:39]
- What is SoftBank's go-to market strategy for Pepper? Note: Pepper has debuted in China, Taiwan and Singapore.
- Why are they not adopting the direct consumer approach?
- Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and Baidu (NASDAQ:BIDU) lead in the artificial intelligence but don't count out IBM's (NYSE:IBM) Watson and Microsoft (NASDAQ:MSFT).
- Machine learning algorithms are commoditized but data that feeds those algorithms becomes the most valuable component.
Prediction 3: The Nintendo-DeNA deal will see mixed results unless Nintendo resolves its innovator's dilemma. [13:40]
- Pokeman Go will be a success and spur Nintendo-DeNA to think outside the box.
- Winning Strategy: Enhance free gameplay by using real-world add-ons (in Pokeman Go's case, the Pokeman Go Plus Wearable). Later, competitive events.
- Nintendo's Innovator's Dilemma: Are they too focused on console gaming and not thinking about mobile as its own thing?
- Is Nintendo's future in gaming similar to Disney (NYSE:DIS) in media content? Does owning a portfolio of gaming content IP is the way to go for gaming companies?
Prediction 4: Xiaomi's diversification into home tech and expanding westward. Broader implications for Baidu-Alibaba-Tencent expanding globally. [17:08]
- Chinese companies face a strategy tax when going global. For example, Xiaomi has to maintain two android systems, one for China and the other for the rest of the world. Reference: Episode 68 with Clay Shirky.
- Xiaomi puts recent patent purchases to use and expands to Europe and US aggressively.
- What are the implications on the Baidu-Alibaba (NYSE:BABA)-Tencent (OTCPK:TCEHY) going global? For example, Alibaba's cloud company, AliCloud and Tencent's investment in Glu Mobile (NASDAQ:GLUU).
Prediction 5: Facebook will not be successful in Asia with a WeChat-like strategy, might make a play to acquire LINE or enter China. [19:50]
- The strategy tax for Facebook to enter China.
- Given China has many players from WeChat to Weibo (NASDAQ:WB), should Facebook even bother?
- Facebook's continued controversy with India on free basics. Reference: Episode 77 with Newley Purnell
- Mark Zuckerberg's letter to India on free basics.
- The Indian community backlash and open letter against Mark Zuckerberg.
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