The consumer market is currently driving surging demand for tablet PCs, but the situation is about to change as enterprises, including manufacturers and services providers, increasingly adopt the device. As tablets go mainstream in schools and businesses, an intense fight for market share is brewing, and I expect many of the current suppliers will lose out to the handful of companies that have established instant name recognition in the segment.
In coming years, tablet PCs will be showing up in many segments of the economy: the financial services industry is already using it and so are realtors, retailers, restaurants, schools, manufacturers, etc. Tablets are replacing books and laptops in cockpits, in police patrol vehicles, on manufacturing floors, and in students' school bags. The adoption rate is so high, tablet shipment could be as high as for wireless handsets.
Of course, Apple Inc. (Nasdaq: AAPL) already has a significant head-start. In fact, Apple's lead is so enormous that its iPad is beginning to be seen as the generic brand name for the device, much as Aspirin, invented by Bayer, has become the industry nomenclature for the pain killer. When people talk nowadays about tablets, the visual image that comes to many minds -- at least in the consumer market -- is that of the iPad. Rivals are trying hard to combat this, knowing full well that the longer the iPad is associated with the line of product, the harder it will be for their offerings to gain market acceptance.
There's hope for them. Even though Apple currently controls a more than 70 percent market share in the sector, this is expected to decline slowly in coming quarters as products from companies like Motorola Mobility Inc. (NYSE: MMI) and Samsung Electronics Co. Ltd. (Korea: SEC) gain greater acceptance. In the enterprise sector, companies like Dell Inc. , which is actively promoting its product to businesses, will likely penetrate in the manufacturing sector, an area where functionality, pricing, and durability might be more important than the design elegance so critical to winning in the consumer market.
Apple is not absent in the enterprise market, though. In fact, the company is currently one of the strongest players in the market as Timothy Cook, Apple's CEO, pointed out during the company's recent quarterly conference call with analysts. The statistics cited by Cook clearly show how big the tablet market is likely to become in coming years. Shipment of tablets might even exceed the sale of traditional notebook and desktop computers, according to some reports. Here's an excerpt from Cook's statement:
It's been just 18 months since we introduced iPad and the pace at which businesses worldwide are adopting this technology is unprecedented. Today, 92 percent of the Fortune 500 are testing or deploying iPad within their enterprises, up from 86 percent last year. Internationally, 52 percent of the Global 500 are testing or deploying iPad, up from 47 percent last quarter.
Every day, we learn about innovative new ways our enterprise customers are using iPad. The airline industry is a great example of the momentum we're seeing. United Continental Holdings is putting iPads in every cockpit to replace heavy, paper-based flight bags. In Japan, All Nippon Airways is now using iPad in training programs for flight attendants. Sonic Automotive is using iPad for customer check-in at the service department and also to provide analytics to regional managers. Aflac, Biogen and General Mills have developed internal apps that their field sales teams leverage daily, and technicians of Siemens Energy are bringing iPads along when they do maintenance work at the top of their wind turbines.
Bolaji, I mostly agree with you and concur that it's inevitable that tablets will be adopted by business: I've been to a restaurant that used an iPad for its wine list, for example. There are applications where use of tablets make sense.
However, part of the reason I'm not convinced that Apple will be the leading player in the enterprise tablet market is because Apple's overall corporate philosophy doesn't really mesh well with IT departments. Apple is very strict on controlling the experience on their products which is a policy that makes a lot of sense in the consumer market.
But in enterprise applications, IT wants the control: they don't want Apple to dictate what they can or cannot do with the devices. And they don't want to rely on Apple for security and services.
Now that being said -- in certain applications -- this matters a lot less. A law office obviously needs strict controls and high levels of security, whereas that's far less important when you're dealing with something like a restaurant.
And there are of course cost concerns as well: to use restaurants as an example again, a pad of paper is much cheaper than an iPad. And you won't care if a pad of paper is lost or dropped into the garbage.
Anyhow, we'll see how the enterprise market shakes out. Too bad RIM blew their chance at gaining an early lead in this space. And I certainly predict Apple won't be lead player in the business tablet space 5 years from now.
Many corporations have strict policies as to what can be installed and run at employee’s desktop or laptop computers.This causes a major headache for IT departments that are used to applying their controls on IT assets.iPads and other tablets, in which the users seem to download any number of apps without any checks and balances by corporate IT will not go very far in the enterprise.It’s almost as all the rules go out the window when it comes to iPads, iPhones, and Android devices.People want to use their tablets for both business and pleasure, so would that mean now people would have to have multiple tablets in the future, those for business and those for pleasure?
Tablet have enormous advatages and is quite ubiquitous. Most organizations, schools and homes will employ it. But does it have any other bad side effects? Is all situation has been time tested for Tablets? One must evaluate this for long term reliable services.
Unauthorized downloads are already an issue for company desktops and laptops. Perhaps someone will develop a password protected download facility that only allows authorized personnel to perfrom the download function, or come up with a corporate library that can provide authroized downloads without additional restrictions.
I recently read a report stating that when it comes to schools and education, iPads are the preferred tablet choice with no real competition at this point.Apple is clearly aggressive in getting their devices in the hands of students, especially at younger ages.Recently, Apple CEO Tim Cook stated that nearly 1,000 K-12 schools have an iPad deployment program in which these schools intend to provide an iPad for each student.
Tablet PC market have huge potential to grow, and the preliminary signs are even looking stronger as its demand has risen at significantly within the short time.
As tablet PCs become more prevalent, the relative proportion of laptops sold will gradually decline. Thus the potential to take a considerable portion of the enterprise market share is feasible, and to gain market share is also noteworthy. This is not to say that tablets will replace laptops entirely; instead they will add value to the existing technology infrastructure.
iPads' restrictions on third-party software may pose a barrier for their deployment in the enterprise. The "Wow" factor, though, may lead companies to get over this barrier.
Certain companies do use Macs on their networks, and the iPad OS has the Mac OS, which is closely related to Unix, as its core. The restrictive nature of what s/w can be installed on the device makes it particularly effective against exploits. Malware attacks have been reported where app's were installed circumventing Apple's authorization framework however.
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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