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.
About the Apple crowds: I think that the Apple products are a much better value than any Microsoft product has ever been.
Consider the number of times that Apple has had to send out patches for buggy products. Not very many, are there. Now consider how many fixes get sent out to fix that other company's products. The numbers speak much louder than I ever could. I believe that it is dishonest to take people's money and not deliver the promised performance. If one is selling junk, then describe it truthfully as junk before selling it.
But don't you think that crowd manipulation is present almost everywhere rather than just in one company?
". . . through marketing efforts and their large collection of resources that Microsoft is able to create a crowd hysteria type of effect and use that effect for their financial benefit. "
I am not taking any sides here. However, I believe that same can be said about many other companies. Anyone trying to sell a product or service is going to apply direct or indirectly some crowd manipulation. That's what marketing is all about, isn't it?
I am not saying that I agree with it either. It's one more characteristic of human behaviour in the times of massive consumerism that we are living.
Masses also line up at an Apple store every time there is a new iPhone. Crowd manipulation is some sort of invisible hypnosis, and not necessarily always used for the benefit of the crowd, as much as it benefits the one moving the strings of the puppets.
What I mean is that through marketing efforts and their large collection of resources that Microsoft is able to create a crowd hysteria type of effect and use that effect for their financial benefit. This is similar to the effects that a very skilled orator could produce back in the era when people would actually pay serious attention to a public speaker. That doesn't happen much these days because many people are unable to focus their attention for any length of time.
But those people at MS have mastered the art of crowd dynamics and manipulation to the point that they have some folks eager to embrace whatever they choose to sell. As proof, look at all of the folks standing in line to buy the next release of each new operating system.Those lines prove the dkills at crowd manipulation.
"Just because a person is "the last man standing" does not mean anything except that they are anything other than a winning fighter."
I can't disagree with that. Certainly it's true. If all the companies in the world would play clean and ethical games everything would be better.
Then we have to wonder if the problem is of one sole company or if it is a generalized business attitude, which corresponds to the attitude of the whole global society.
Indeed, business ethics should be more inforced and promoted.
"And, in our discussion about tablets versus non-hand-held computing, just because they would force "newthink" on everybody does not mean that everybody will embrace "newthink"." Whynin the whole world should I choose to do the same thing that everybody else does, just because they are doing it?"
I am of the first in supporting the idea of not doing something just because everyone else is doing it if what is in question is against your way of thinking, principles, etc..
But, I am not sure if I have clear your concept here. Do you think that they are forcing tablets on consumers?
Microsoft has used skillful manipulation to get a huge market share and they have certainly made lots of money. And while a lot of the things that they have done over the years have increased the MS market share, they still sell products that would bring other companies a lot of criticism.
But what gains Microsoft has made are often at the expense of destroyed competitors. They have the resources to dump product at a loss until the competition can't survive by matching prices. They have done that with software many times in the past.
So I would have to acknowledge that Microsoft has been a business success, but only by means of what I would assert are dishonorable and underhanded business practices. Just because a person is "the last man standing" does not mean anything except that they are anything other than a winning fighter.
And, in our discussion about tablets versus non-hand-held computing, just because they would force "newthink" on everybody does not mean that everybody will embrace "newthink".
Whynin the whole world should I choose to do the same thing that everybody else does, just because they are doing it?
Susan, of course, you are correct. but making a product a big success takes more than just making the product, even if you are Steve Jobs. The push to make a product into a business success is not simple, and it requires constantly telling folks how everybody else loves it. And any CEO who did not constantly remark about the fantastic future, when everybody will have their product, would quite soon be evicted from office per the demands of the stock holders.
So no matter what the product is the predictions will always be that in three years everybody in the whole world will be purchasing them no matter what the price.
Well, it is another great point to discuss. We have assisted several times to the events you have outlined: incredible predictions in terms of revenues and footprint on the market, despite to what was really happened. I am wondering if there is a universal and fair model for making CEOs responsible of results achieved; it seems, that model runs for collecting huge bonus, but doesn't run properly in case of negative impacts or it happened only recently those responsibilities have been applied to.
Microsoft surface and windows 8 actually are good bridging between tablets and PCs. The software and the interface of windows 8 look quite the same on tablet on and on PC. There is high chance hybrid devices will be growing and attracting attention
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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