The world's top PC manufacturers are trying very hard but failing woefully to gain a strong foothold in the tablet PC market, according to the latest sales and shipment numbers for the two industry segments from IDC.
In a report today, the research and consulting firm identified the top five sellers of tablet PCs in the 2012 fourth quarter as Apple, Samsung, Amazon.com, Asus, and Barnes and Noble, in that order. Earlier in January, IDC listed the top five PC sellers in the same period as HP, Lenovo, Dell, Acer, and Asus, also in that order. Do you notice anything peculiar about the lists? Only Asus made the two lists.
Why are the industry's biggest PC manufacturers failing to gain traction in the tablet PC market and is there a chance for them to turn this situation around soon? I bet the top executives at HP, Dell, Lenovo, and Acer are asking themselves the same question. Tablets are growing fast and while the total units shipped in the segment is still below PC sales (52.5 million tablets vs. 89.8 million PCs) tablets are growing at such a rapid clip the segment would most likely exceed PC shipments within the next couple of years or so.
Tom Mainelli, research director of tablets at IDC, said in the statement above:
We expected a very strong fourth quarter [for tablets], and the market didn't disappoint. New product launches from the category's top vendors, as well as new entrant Microsoft, led to a surge in consumer interest and very robust shipments totals during the holiday season. The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years.
No kidding. The tablet market grew a torrid 75.3 percent in the 2012 final quarter while PC shipment shrank 6.4 percent. Only Lenovo and Asus increased their shipment during the quarter, by 8.2 percent and 5.6 percent, respectively. Contrast that with the situation in the tablet market. Apple Inc. (Nasdaq: AAPL) led again, with a 48.1 percent jump in unit shipment, to 22.9 million units from 15.5 in the comparable 2011 quarter. Samsung Electronics Co. Ltd. (Korea: SEC) was next in total units shipped (7.9 million vs. 2.2 million) but its rate of expansion was a sweltering 263 percent.
It's unlikely Apple will lose that top position anytime soon. All the other players are growing rapidly on a percentage basis but from a much lower base and unlike in the smartphone sector where Samsung has taken the lead from its North American rival, Apple is well entrenched in tablets. Aside from Samsung's offerings, competing products offered by Microsoft Corp. (Nasdaq: MSFT) (Surface) and AsusTek Computer Inc. (Nexus 7) have not gotten the favorable reception the manufacturers expected. IDC believes pricing of competing devices would have to come down if they were to make a dent on Apple's market share.
Ryan Reith, program manager of mobile device trackers at IDC, said in the same report:
There is no question that Microsoft is in this tablet race to compete for the long haul. However, devices based upon its new Windows 8 and Windows RT operating systems failed to gain much ground during their launch quarter, and reaction to the company's Surface with Windows RT tablet was muted at best. We believe that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices. In the long run, consumers may grow to believe that high-end computing tablets with desktop operating systems are worth a higher premium than other tablets, but until then ASPs [average selling prices] on Windows 8 and Windows RT devices need to come down to drive higher volumes.
Looking at the tablet shipment numbers and the players involved, it's understandable why Microsoft got into the market. Its traditional partners in the PC market have been less successful in the tablet market so the company is trying to shatter the illusion that Apple cannot be dislodged from the top of the segment. So far, though, Microsoft has only reinforced the impression PC vendors aren't well positioned to compete in the adjacent, faster-growing market.
This won't stop Microsoft from leading the battle, though. It cannot afford to yield because too much is at stake. Like Intel, the world's biggest PC microprocessor vendor, Microsoft has found itself in the unusual position of playing second fiddle in a market many feels its operating system should be dominating. It's going to be a long, bruising fight.
Tablets versus real computers? There are two different uses for them. Just attempt to create anything, using a real cad program, on a tablet. Bad news there: you really do need at least a PC for that. Likewise, real document creation, spreadsheets, or even PowerPoint presentations. The tablet may work for watching TV or playing music, and surfing the internet, but for real work, it is a toy. Don't get a city bus if you want a motorbike, and vice versa.
There is a place for both of them, indeed.
But if Microsoft creates a tablet, we can expect that to contribute to a resurgence of desktop PC systems. It certainly is possible to take something that was usable and revise it into something totally foreign, which they are good at.
Ariella, Sorry, we are stuck with the smartphone and tablet as individual devices. I don't think it's impossible but the miniaturization (power and size) isn't there yet. The first combination we'll see is the PC-tablet combo. They'll exist as individual devices but they'll also become either/or for users.
@Ariella, We would still need the PC for quite a while because the processing power of tablets isn't still high enough and the storage is also limited. People defending the PC need to understand that we said the same about desktop PCs never falling behind notebooks. It happened. I will eventually give up the PC and so will others.
Eventually, companies like Apple will find a way to meet users' demands as far as the shortcomings of the tablets might be. Apple sells more tablets than it does PCs and it want more of the market share of PC holders. That's where it's future lies.
Susan, When and if I find myself buying another PC, which most likely would be a laptop, I can tell you it won't log as many miles with me as my current PC.
And very soon Tablet and PC will have one more product to share its market - mobile phone like Samsung Note II and others. Eventually they will all mature and settle at equillibrium.
The new government rules and regulations may prove to be a double-edged sword: achieving some positive goals but costing organizations a great amount of money and work and, perhaps, lost sales as well.
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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.
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