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Battle Lines Drawn Between Vendors of PCs & Tablets

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. {complink 379|Apple Inc.} led again, with a 48.1 percent jump in unit shipment, to 22.9 million units from 15.5 in the comparable 2011 quarter. {complink 4751|Samsung Electronics Co. Ltd.} 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 {complink 3426|Microsoft Corp.} (Surface) and {complink 500|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.

30 comments on “Battle Lines Drawn Between Vendors of PCs & Tablets

  1. Susan Fourtané
    February 2, 2013

    Hi, Anna 

    I keep on saying that PCs don't have a chance anymore. Tablets will take the reign, even taking the position of the laptops. 

    -Susan 

  2. Nemos
    February 2, 2013

    I don't remember, and I am very curious to see if the same dilemma and discussions were taken place when the netbooks came into the market.

     

  3. _hm
    February 2, 2013

    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.

     

  4. bolaji ojo
    February 3, 2013

    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.

  5. Ariella
    February 4, 2013

    @Bolaji If you'll be using a tablet for some PC functions, would a new PC even be necessary? 

  6. Adeniji Kayode
    February 4, 2013

    @ Susan, I agree with you on that but thats is going to be future tablets with more features and functions

  7. bolaji ojo
    February 4, 2013

    @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.

  8. Ariella
    February 4, 2013

    @Bolaji what of the possibility of smartphones and tablet merging, or do you believe people will continue to carry both?

  9. bolaji ojo
    February 4, 2013

    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.

  10. William K.
    February 5, 2013

    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. 

  11. mfbertozzi
    February 7, 2013

    @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…

  12. William K.
    February 7, 2013

    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. 

  13. Wale Bakare
    February 8, 2013

    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.

  14. Ariella
    February 8, 2013

    @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.

  15. Wale Bakare
    February 8, 2013

    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

  16. Wale Bakare
    February 8, 2013

    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.

  17. Ariella
    February 9, 2013

    @Wale, yes, I would think so. I believe their advertising says something like “the next thing is here.”

  18. mfbertozzi
    February 10, 2013

    @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.

  19. mfbertozzi
    February 10, 2013

    @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?

  20. William K.
    February 10, 2013

    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.

  21. t.alex
    February 10, 2013

    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

  22. mfbertozzi
    February 11, 2013

    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.

  23. Susan Fourtané
    February 26, 2013

    William K.,

    Microsoft created the Surface already.

    -Susan 

  24. William K.
    February 26, 2013

    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. 

  25. Susan Fourtané
    February 28, 2013

    William K., 

     “making a product a big success takes more than just making the product,”

    Yes, I know. But don't you think that Microsoft has what it takes to make a product sucessful? 

    -Susan

  26. William K.
    February 28, 2013

    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?

  27. Susan Fourtané
    March 1, 2013

    William K., 

    “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? 

    -Susan  

  28. William K.
    March 2, 2013

    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.

  29. Susan Fourtané
    March 3, 2013

    William K., 

    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. 

    -Susan   

  30. William K.
    March 3, 2013

    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.

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