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.
What has ocurred to me is that the predictions about the incredible growth of one form or the other are the self-serving propositions of folks attempting to boost their favored direction. Just like I posted a while back, elsewhere: "What else could the CEO possibly say?" If you don't predict unbelieveable growth in your segment of the market, the board will find another CEO who will make those predictions. Reality has very little to do with it. Sort of like the "Hype" that went on in the record business back in the sixties and fifties. Keep repeating the story often enough and eventually some people will believe it.
@WB: interesting point and I would like to elaborate just a little more; "size" - as you have outlined - is a key factor that probably will impact the market in the future; I am also convinced humans will interact with objects instead of handling devices, as of today, by using tablets and so on; what about?
@WK: really interesting perspective, not so easy as you have mentioned, to find out the right scenario; anyway, objects around us are becoming smart, no doubts.
Samsung has its Galaxy S2/3 a mini -tablet (smartphone) features and very portable and lighter than tablet. This's a perfect example of what would happen to tablet and smartphone soon.
In very near future i can see one get displaced this might probably depends on some additional features swap over. But PC remains in market, this might be for a set of people and enterprise sector
@Wale I've seen people holding up full size tablets to take pictures. Now, that looks awkward to me, but I imagine the picture quality could be better than one gets on a phone. But if someone develops a fully functional tablet that could be folded up to the size of a phone and has some convenient phoning feature built in (even though I'm told that everyone in the know today texts and doesn't call), then there can be a combination mobile device that covers all the on-the-go computing needs.
Both devices are serving nearly same purpose to consumers - touch screen/qwerty, emailing and multi-media. The only major difference that still preventing consumers from ditching one for another - phoning, and perhaps size. That could affect either tablet or smartphone in near future.
The various features such as the Google Glass thing may possibly have some use on PCs, that is true. BUt there are a lot of differences between what folks do on a tablet or smartphone and the work that some of us do on a descktop box. Can you imagine a tablet with 10gigabytes of ram??? Or with a mouse good enough for CAD work? And what about even the simpler flow simulators? and the logic circuit simulators? The tasks that would overwhelm any tablet are quite a few. On the other side, of course, are those tasks like restaurant searching and near-field paying a bar tab, that would be just fine for a tablet or smartphone. I don't see how a touch screen, even the best that Apple can offer, would help with a spreadsheet or even a cad application, although it is probably simple enough to make them work togather.
So while the market is split, it does not look like the end of the road for either type of device, and those who keep harping that it is should be asked to explain why they are makig all of that noise. Those predictions have no value and they are unable to benefit anybody, so we would be better off with silence on the subject.
@William K: it is a good point and I would like to elaborate it just a little more; after all, there are many devices around PCs and tablets and although it seems an adveniristic plane, I believe we could consider within the discussion Gooogle glass; maybe some features from them, will substitute in a such way those from tablets...
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.
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