Highlights from the Gartner Report
1. The worldwide sales of tablets to end users reached 195.4 million units in 2013, a 68 percent increase on 2012
2. This is fuelled by an improved quality of smaller low-cost tablets from branded vendors and white-box products continued to grow in emerging markets
3. The emerging markets recorded growth of 145 percent in 2013, while mature markets grew 31 percent.
4. Around 121 million Android tablets were sold worldwide in 2013, up from 53 million in 2012.
5. Android surpasses Apple iOS in tablet market. Android now holds 62 percent marketshare.
6. Despite Microsoft now acting more rapidly to evolve Windows 8.1, its ecosystem still failed to capture major consumers’ interest on tablets.
7. To compete, Microsoft needs to create compelling ecosystem proposition for consumers and developers across all mobile devices, as tablets and smartphones become key devices for delivering applications and services to users beyond the PC
Declassifying Inte’s future plans from the CEO’s CES key note address
Intel Chief Executive Officer Brian Krzanich will take the stage at the International Consumer Electronics Show with the message that the chipmaker will do what it takes to remain relevant as consumers switch to mobile devices for computing tasks.
Krzanich, who will make a keynote presentation at the trade show in Las Vegas, is set to feature a first public showing of some of the mobile and wearable technology from Intel’s New Devices division, led by former Apple executive Mike Bell. Krzanich could also emphasise how Intel has accelerated the pace at which it brings new products to market.
The world’s largest chipmaker, which dominates the market for semiconductors that run traditional computers, is seeking to branch out as consumers increasingly use smartphones and tablets that don’t contain Intel processors. With the personal-computer market forecast to decline for a third consecutive year and Intel failing to win significant market share in phones, Krzanich is working to ensure that the company doesn’t miss new opportunities such as wearable devices and other personal technology.
“PCs are slowing so you have to offset that with something else,” said Patrick Wang, an analyst at Evercore Partners in New York.
The Santa Clara, California-based company, which Krzanich took over in May, remains heavily dependent on servers and PCs. Intel has more than 80% of the market for PC processors and more than 95% share in server chips, according to researcher IDC. In November, the company forecast that sales will be about the same as the $52.6 billion it will report for 2013, below the $53.7 billion analysts were projecting.
Since becoming CEO, Krzanich, a former semiconductor factory manager, has taken steps to diversify Intel’s business. He has said Intel will focus on providing what the market wants in chips rather than following the company’s traditional method of designing and producing products aimed at determining the direction of technology. In addition, the company’s plants, which Intel says are the industry’s most advanced, may produce chips for rivals, he said.
“However the market moves, wherever the compute need is, we want our products to do it best,” Krzanich said at a meeting at the company’s headquarters. “We’d become insular. We’d become focused on what was our best product rather than where the market was moving.”
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The 53-year-old also has said he’s speeding up the time it takes from design to production of new chips and concentrating efforts on lower-power products. Intel has a new processor called Quark, which it’s trying to get into everything from household appliances to industrial equipment.
Krzanich’s openness to producing chips for other companies and to listening to what his customers want is a departure from predecessor Paul Otellini, who had said smartphones and tablets wouldn’t replace PC, says Stacy Rasgon, an analyst at Sanford C Bernstein & Co. “They had their head in the sand,” said Rasgon. “Their push now is to make sure they don’t get blindsided again.”
The CEO, who like his five predecessors was an internal appointment, may need to go further to make what Intel produces central again. While wearable devices could become the next billion-unit market, according to Rasgon, Intel isn’t fast enough at rolling out new products.
Wang said Intel’s factories might be its best bet for getting into new markets. The company will spend $11 billion this year on plants and equipment to maintain its lead in transistor technology. Intel said it is more than a year ahead of competitors in the manufacturing of the fundamental component of all semiconductors.
To participate in the market for smartwatches, glasses and the internet of things, where Intel has no track record in designing chips that are better than alternatives, the company should open its factories to rivals such as Qualcomm, which are more likely to win, said Wang. But that’s a step further than Krzanich may be ready to take.
Reported from Economic Times Article under the topic: CEP Chips in with Intel everywhere
4 months back i had blogged about How Mediatek (MTK) would disrupt tablet markets in SouthEast Asian Markets. According to the latest tablet CPU share report from Strategy Analytics, MediaTek is on a roll in the tablet space, now practically tied with Samsung as the second biggest supplier of tablet chipsets.
The global tablet processor market registered 46 percent year-on-year growth to reach USD 759 million in the second quarter. Apple still dominates the market with its A5 and A6X processors and it enjoyed a 34% revenue share in the second quarter. Samsung and MediaTek had about 10% each, although Samsung was in a slim lead. Marvell and Qualcomm also made some progress in Q2, while Intel and Nvidia are expected to gain share in the second half of the year.
MediaTek scored significant design-wins with Acer, Asus and Lenovo. MediaTek’s tactics of releasing stand-alone applications processors for the tablet market coupled with its reference design know-how have propelled its share to double-digits in the tablet applications processor market.
During Q2 2013, Marvell and Qualcomm also made good progress, thanks to their high-profile tablet design-wins. Strategy Analytics believes that Intel with its Bay Trail chip and NVIDIA with its Tegra 4 chip are also poised for tablet applications processor market share growth in the second half of 2013.
Microsoft has been in mobile since Windows CE for PDAs in 1998. Inspite of 15 yrs of presence, the latest reports don’t inspire any much confidence at Microsoft writes down huge losses on its ambitious Surface RT tablets
1. Microsoft’s Surface tablet generated $853million revenues in 8 month period (Launched late October 2012 to End of Q2, 2013). However, Microsoft has written off $900 on the Surface line – thus re-iterating that the whole premium pricing strategy was to no vain.
a. To put the $853 million in perspective, Surface revenue equaled about 5.5% of the Windows Division’s $16 billion in sales in the last three quarters, and just 3.3% of the $25.8 billion that Apple’s iPad generated in the same period.
2. Microsoft cut the price of Surface RT by as much as 30% in July 2013 and given that the number for the $899 Surface Pro have been poorer, there could be another inventory write down of Surface Pro over the next few quarters
3. Surface RT has also seen a huge attrition of OEMs which starts with HP & Toshiba (Committed to Surface RT- but never launched a device), Samsung (Which cited lack of demand for ditching the platform in January 2013), Acer, Lenovo and Asus (Mid July 2013).
a. There may be a few backers in terms of Qualcomm, Nvidia and Dell – But the fact remains – Windows RT is challenged and OEMs are simply not interested in RT.
b. This could be a spanner in the works of Windows RT 8.1 – It already is out of all momentum.
4. Microsoft has the choice of continuing on the Surface RT Tablets – but it is very highly unlikely that they would be able to turn the platform around. Keeping Surface RT alive would be a game of diminishing returns and would bleed Microsoft.
Microsoft may have deep pockets – but that really doesnot justify the undying faith on Windows RT.
The inexorable march of the Tablet category is pretty much in place – even while the 5.7″, 6″,5.3″ form factors are gaining ground and acceptance in India. The Indian tablet market is set to double up from its 2012 numbers.
Q1, 2013 registered 905K tablets sold in India which was a 159% YoY increase from the Q1, 2012 figures. While this number was 21% less than Q4,2012 – that is explained by the seasonality of the purchase. The Indian Tablet markets pick has been faster in second halves owing to lot of factors.
These numbers are reported by CMR. As many as 59 domestic and international OEMs shipped their tablet PCs to India and led to a fragmented market with only 9 vendors beyond 20K tablet sales. However Indian consumers showed no bias towards International brands – as Datawind took the top honours with 15.3% of the market edging out Micromax at 12.3% Apple’s iPad mini enabled a come back to No.3 position with 11.3% market shares.
The leaderboard points to a sort of polarization of India Tablet user segments – one set looks primarily for performance and best-in-class build quality and typically opts for the high-end Apple iPad, while the other segment looks for a wide range of features at an affordable price point and opts for brands like Datawind and Micromax.
To round of this analysis, there are these three trends that would drive the adoption of the tablet segment in consumers as well as enterprises in the days to come
1. While 3G data enabled tablets contribute only 28% of the Total Indian tablet markets, it is expected that this segment will see some serious action and expansion in days to come with the possible launch of low cost 3G SOC solutions by MTK.2. 2013-14 being the election year, one would see a lot of government doles in terms of tablet devices.
3. Also, one of the other trends that i am betting to see a lot more is the customization of tablets for specific industrial segments as we will see tablets featuring more on the Enterprise BYOD space.
4. Solutions such as Vernacular based solutions, Micro finance/Micro Credit/Financial Inclusion, Insurance industry solutions, Healthcare/patient record/ Patient history digitizations apps, Agrarian and Retail Point of Sale Applications will be key to segment growth in the coming days.
Mediatek (MTK) is a Taiwaneese semi conductor maker with revenues worth $3.4bln in 2012. In the semiconductor industry, that number is a modest one, and MTK’s market share is only 1.1% of the global semiconductor sales (Source- iSuppli).
However, MTK has a few disruptions to its credit. Starting 2007 onwards, MTK’s chipsets engendered billions of low cost mobile devices at around half the price of the existing industry standards at that point of time. This provided a significant fillip the telecom industry as it lowered the cost of entry and initial cost of hardware acquisition for a first time buyer. It also was instrumental in replacement sales where in feature categories were available at lower price points thereby getting people to migrate from their existing handsets to a better feature set at a price equal or lower to the existing price of the handsets. It spawned companies such as Micromax, Lava and Karbonn.
In 2012, yet another Taiwanese chipset maker – Allwinner disrupted the tablet market by providing chipsets for WiFi enabled Tablets. This enabled a spate of low end tablets for the first time tablet buyer. Tablet category was till then defined by the likes of Apple and Samsung. Allwinner with Android truely liberated the category of tablets for the first time buyer. What resulted was a major market disruption where in the markets shifted from the majors to low cost- value oriented minors. At the last count, such tablets sold 2.2mln units – out of the 3mln tablet market in India.
In 2013, MTK now endeavours to disrupt the low end tablet space with low cost 3G chipsets – at a differential of $2-3 over the Allwinner WiFi chipsets. That would translate to Rs.150-200 difference in end consumer price for a 3G tablet over the WiFi tablet. One can expect that with the pricing gap squeezed to Rs.150/200, buyers of WiFi tablets could make the jump to the 3G tablets for the inherent advantage – Portability. There – thats the disruption that i am talking about. A Rs.5000-6000 3G tablet. Introduction of low-end 3G tablets and smart devices and the natural price decline curve – will shift demand, supporting uptake among new, less affluent customer segments
What could that do? The way i look at it – there are a few sectors in India that could immediately benefit from low cost 3G tablets – Education, Insurance, Healthcare, G2C payments, UIDAI based transactions and Financial Inclusion, Enterprise and Businesses. Slowly but surely, a lot of drivers are getting together to push the tipping point for tablets and smart devices.
1. Pricing Advantage (Will fuel 60% acquisitions)
2. Affordability in 3G Mobility
3. Business and Bring Your Own Device (BYOD) (Will fuel 4% adoption)
4. Platform maturity and Applications
5. Vernacular matures as a platform
6. Government push on Tablets as a segment to connect the unconnected- Election Year!
While initial estimates point at 6 mln units sales of tablets in India in 2013 – the number might have a groundswell driven by the numerous government programmes – and the MTK advantage would be key to deliver services remotely on these devices.
ABi research reports that the tablet market will grow this year by 38% to 150 million units. But the Microsofts and Blackberrys will contiunue missing the boat! With 3% of the current Tablet markets globally, Microsoft, Blackberry and other unidentified OS implementations don’t show signs of significant growth.
The ABI Research report says that an estimated 150 million tablets will ship in 2013, worth an estimated $64 billion.The total number of tablets will grow by a projected 38% over 2012, and the total revenue will grow a projected 28%. Last year, according to ABI, 60% of tablet used iOS, 37% used Android, and the remaining 3% was made up of “others”.
App publisher Animoca recently calculated the top 12 Android tablets, based on app usage, and it found that five of the top six are 7-inchers- and with iPad Mini touting the 7″+ form factor – Tablet markets in the foreseeable future could look to stabilize at 7″ form factor.
Theoretically, that could bode well for Microsoft, because the company is said to be at work on a 7-inch Surface tablet. Surface tablets haven’t sold well, but perhaps a less-expensive and smaller form factor would help. A possible winner would be a 7-inch Windows tablet that takes advantage of Microsoft’s partnership with Barnes and Noble and taps into B&N’s vast book repository and growing video offerings, as well as into Microsoft’s successful Xbox-based gaming ecosystem.
Still, if ABI Research numbers are right, Microsoft so far hasn’t been able to tap into people’s growing desire for tablets, and won’t in the foreseeable future.
For many of the marketers out there – there is not a great case for Tablets and Smartphones together. Most of them view tablets as a passing fad. This equation is perhaps complicated by the announcement of Phablets as a hybrid form and use factor! However, is Tablet really a fad?
A recent report published by the Adobe Digital Index is an eye opener. For February 2013, Tablets are attributed to be driving more traffic to websites than smartphones. The report is based on 100 billion visits to more than 1,000 websites worldwide over the last year – hence this isnt a fluke that you had blow over. Adobe attributes this shift in web browsing patterns primarily to the device’s form factor, which lends itself to leisurely (and more comfortable) browsing than smaller touch devices.
Listing down a key points on how and why Tablets are not a fad. They are here for good-
1. Frankly, with both WiFi Tablets and Entry-level Smartphones penetrating the $50 price point – the screen size is a big enabler for tablets.
2. As WiFi hotspot roll outs gather momentum – Tablets will push more and more of data.
3. So while Smartphone gathers numbers in the low end – it is the larger screen size devices (3.5″ – 4.0″ – 5″ – 7″- 9.7″) which will posssibly drive higher data consumption.
4. The customer at the economy end of connected devices ($50-$100) tends to use his device as a media machine – again for the $50-70 price – a tablet provides greater value than a 2.8″-3.5″ smartphone given the profusion of pirated content.
5. Tablets are also driving penetration across segments such as education, insurance for the large screen internet access advantage
6. For the Phablet space – this is a sub-category branching out into becoming a category by itself – but its numbers will take some building up – and the pricing still is $200 & above.
7. With tablet growth rates still well above smartphone growth rates, expect this gap to widen
8. Traditionally because of the higher screen size the engagement time on tablets has been higher than the smartphones as well.
Interestingly enough, in mature economies, Tablets have found yet another niche. Tablets are increasingly being used shopping activities.Adobe found that 13.5% of all online sales were transacted via tablets during the recent holiday season. Furthermore, as of January 2012, researchers found that consumers using tablets spent 54 percent more time per online order than their counterparts on smartphones, and 19 percent more than desktop/laptop users.
Thus the key take away from the Adobe report is this – tablets and smartphones are two different animals. Based on consumer use cases, one does not replace the other because mobile device owners are using tablets and smartphones to accomplish different tasks. This has implications on the way e-commerce companies as well as media companies and online content distributors would play up to serve the user. So this really gets into single device – multi use cases scenarios – all of is still building.
Thus i come back to my initial point – Marketers who are apprehensive of the scale and scope of tablets and are unable to fix “proper” answers to tablets, need to understand, there is no single answer… and the answers too are evolving at a fast clip! The risk that they run in trying to perfect the business cases and create understanding is that they could be left out of the markets. Proposition here is possibly not a case of inspiration but of evolution!