Home » Posts tagged 'Gartner'

Tag Archives: Gartner

The growing Chromebook challenge for Windows laptops: promises from Google I/O are getting realized with new Chromebooks introduced at IFA 2014

1. New Chromebooks (13.3”, 14”)
2. Recently introduced Chromebooks (11.6”)
3. Gartner Says Chromebook Sales Will Reach 5.2 Million Units in 2014

Note that a highly competitive ASUS EeePC revival with the $199/€199 EeeBook X205 at IFA 2014: the Chromebooks alternative based on Windows 8.1 with Bing [this same blog, Sept 6, 2014] is coming in November for the U.S. and European markets. That offering is also just the first of a number of similar kinds expected from global laptop brands using the latest Intel Bay Trail-T Type 3 SoCs (i.e. Z3735G and Z3735F, details are in the above post) specifically designed for significantly lower SoC and PCB costs with specific design for “China Technical Ecosystem”. As of today there are no Chromebooks with Bay Trail-T Type 3 SoCs but those could come as well in November timeframe for even greater Windows laptop competition. The current low-end Chromebooks are mostly using the Intel Bay Trail-M (Intel Mobile Celeron) platform, namely the N2830 SoC (for comparison see the N2830, Z3735F, Z3735G table from Intel).

At the same time it is still unclear what the competition between Chromebooks and the cost reduced Windows laptops will be on the emerging markets. For reasons see the ‘Naked PCs’ lay bare Microsoft’s emerging markets problem article from Reuters (Aug 12, 2014) which has been widely republished (like in Business Insider). In addition Xinhua reported on Aug 24 that a Chinese OS expected to debut in October with the aim to relieve China’s way high dependence on both Windows and Android. With that Chrome OS chances in China could be minimal. We should therefore think of the competition between Chromebooks and the upcoming cost reduced Windows laptops just as a mature market phenomenon. More importantly the latest Gartner analysis considers the Chromebook market a niche market for the next 5 years (see at the end).

Microsoft facing increased competition from MacBooks and Chromebooks, say Taiwan makers [DIGITIMES, July 23, 2014]

Microsoft is facing increased competition from MacBooks and Chromebooks, with the global notebook OS market share for Windows 8 already dropping to below 90%, according to Taiwan-based supply chain makers.

Thanks to iPhones and iPads, demand for Apple’s Mac series products has also been rising in the past few years.

Meanwhile, Google is seeing increased Chromebook demand from the US and the UK’s education procurement and enterprise markets. By the end of 2014, vendors including Acer, Asustek Computer, Dell, Hewlett-Packard (HP), Lenovo, LG Electronics and Toshiba are together expected to launch about 20 Intel-based Chromebooks priced at around US$349, the sources said.

To counter, Microsoft has recently extended its free Windows 8 licensing coverage and is cooperating with HP and Acer to release US$199 notebooks at the end of 2014, the sources noted.

In addition to extending free licensing for Windows 8, Microsoft may also need to revise the shortcomings of Windows 8 and accelerate its pace on the development of Windows 9 in order to stay competitive, the sources added.

Google ​previews new Chromebook features [CNET YouTube channel, June 25, 2014]

http://cnet.co/1ltenUK At Google I/O in San Francisco, the company demos new features for Chromebook laptops running Chrome OS, such as how a phone running the latest version of Android can unlock your Chromebook and log you into Web apps via proximity-sensing abilities.

image
The 3 years of Google’s Chromebook journey as it was represented by Sundar Pichai
(As far as Chromebook’s 1st year is concerned see also my Chromebook / box with Citrix Receiver going against Microsoft [May 12 – July 29, 2011] post of mine.]

I’ve already recognized that “the whole Android-centric story is getting even more interesting when Chrome, Google Drive, Chrome OS and the apps related to that are added” in my Nexus 7: Google wanted it in 4 months for $199/$245, ASUS delivered + Nexus Q (of Google’s own design and manufacturing) added for social streaming from Google Play to speakers and screen in home under Android device control [June 28, 2012] post.

From Native Android apps are coming to Chrome OS [The Verge, June 25, 2014]

Google is working to bring Chrome OS and Android closer together, and that’ll eventually mean having Android apps running right on a Chromebook. “We’re in early days,” Sundar Pichai, Google’s Chrome and Android chief, said on stage today at Google’s I/O developer conference. Pichai didn’t say when the feature would arrive, but he demonstrated it already working using Android apps for Evernote, Flipboard, and Vine. The apps can appear in a tall, phone-sized window, or they can be expanded to run as they would on tablets.

Earlier this month, a project for Google’s Chromium called Athena pointed toward big changes to the touch aspects of Chrome OS. That included a virtual software keyboard, a card-based interface a la Google Now, and a new app launcher interface.

Altogether, it sounds as though touch input is bound to become a far more integral part of Chrome OS. Google didn’t comment on what future Chromebooks will look like from its partners, but it wouldn’t be surprising to see more and more shipping with touchscreens.

Google also said today that Chrome OS will eventually be able to display notifications from a paired Android phone, and that a paired phone will be able to unlock a Chromebook just by coming near it.

1. New Chromebooks (13.3”, 14”)

HP Chromebook 14 inch Tegra K1 Hands On [Steve Paine YouTube channel, Sep 4, 2014]

http://ultraboochromebookworld.com for more. This is the new 14-inch Chromebook from HP with a FullHD screen option. It runs on the Tegra K1 platform. Great keyboard, 1.7KG (1.79 for the HD touchscreen) with 2 or 4GB RAM, 16 or 32GB storage. Starting at $299

From: HP Unveils Five New Innovative and Stylish Consumer Products for Holiday [press release, Sept 4, 2014]


The 14-inch HP Chromebook combines beautiful design, super-fast performance and a wide 14-inch FHD [1920 x 1080] diagonal screen(5) for a superior Chrome experience. Powered by the latest-generation NVIDIA Tegra K1 processor with world-class graphics performance, the HP Chromebook provides smooth multitasking while browsing the web, running productivity apps or streaming music. Tegra K1’s breakthrough power efficiency gives the 14-inch HP Chromebook improved battery life. It also features a silent, slim, fanless design and is optimized for Google Hangouts, supporting Hangouts in HD.(5,7)Available in Twinkle Black or Snow White with a choice of complementary accent color options, including Smoke Silver, Sorbet Orange, Ocean Turquoise or Neon Green, the 14-inch HP Chromebook stands out in a crowd.(6)  

  • The 14-inch HP Chromebook is expected to be available in the United States beginning on Oct. 22 for a starting price of $299.99.

(5) High definition (HD) content is required to view high-definition images.
(6) Color availability may vary by region.
(7) Internet service required and not included.

Toshiba Chromebook 2 [CB30-B 13.3”] with Full HD [1920 x 1080] Screen Hands-On [Steve Paine YouTube channel, Sep 3, 2014] with Intel’s BayTrail-M (Intel Mobile Celeron) platform

http://chromebookworld.com for more on Chromebooks. The Toshiba Chromebook 2 CB30-B comes with an optional FullHD IPS screen. It’s iimpressive. There’s no touch but the price should be under 400 Euro. The Intel Baytrail-M platform drives the system.

Note: In France the Toshiba Chromebook 2 CB30-B is available for €329 as of Sept 7.

Acer Chromebook 13 Hands-On (CB5, Tegra [K1], 2014) [Steve Paine YouTube channel, Sep 5, 2014] Note: available for pre-order in U.S. since Aug 12 (see below), but as of Sept 7 it still has not been released

http://chromebookworld.com for more with the Acer Chromebook 13 running on Tegra (ARM.) Full HD and Touchscreen available.

A new type of Chromebook with extra-long battery life [Google Chrome Blog, Aug 11, 2014]

Chromebooks were designed for your mobile lifestyle. They’re thin and light, resume instantly, and are easy to use.

Starting today, we’re welcoming a new type of Chromebook into the family, beginning with the Acer Chromebook 13. This new device uses the NVIDIA Tegra K1 processor, so you get the speed you’re used to from Chromebooks with a battery life up to 13 hours. What could you do in thirteen hours?

  • Fly from New York to Beijing
  • Watch the entire set of Harry Potter movies
  • Complete an Iron Man triathlon (average finish time is 12hr 13min)
  • Finish a 1-credit college course
  • Watch 390 adorable cat videos (2 min per video)
  • Use your Chromebook 13 to watch, play and get a lot done

The Acer Chromebook 13 is available now (with optional touchscreen and 1080p resolution) at Amazon and other online retailers from $279.

Hands-on: The Tegra K1-powered Acer Chromebook 13 [NVIDIA YouTube channel, Aug 12, 2014]

Read more on the NVIDIA Blog: http://nvda.ly/AcMHL. Take a look at the first ever Chromebook powered by the impossibly advanced Tegra K1 quad-core processor and its 192 GPU cores — the Acer Chromebook 13. With up to 13 hours battery life, full 1080p display and multi-tasking capabilities that leave other Chromebooks in the dust, the Acer Chromebook 13 packs a high-end punch into a slick, modern design.

See more at: Tegra K1 Transforming Chromebooks From The Inside Out [NVIDIA Blog, Aug 11, 2014] 

Acer Chromebook 13 laptop – The Chromebook with 13 hours of battery life (features & highlights) [Acer YouTube channel, Aug 11, 2014]

The Acer Chromebook 13 gives you more. Up to 13 hours of battery life keeps you powered from day to night. A faster wireless connection keeps you one step ahead. Full HD display (optional) and anti-glare technology (optional) deliver smooth graphics and enhance all of your favorite videos and photos. Acer Chromebook 13 – more to enjoy. (Battery life may vary depending on model and configuration.)

Acer Launches Industry’s First Chromebook Powered by NVIDIA Tegra K1 and its First 13.3-inch Model [press release, Aug 12, 2014]

Acer America today announced the Acer Chromebook 13, the industry’s first Chromebook powered by an NVIDIA Tegra K1 mobile processor mobile processor and the company’s first with a 13.3-inch display. The Chromebook 13 enhances Acer’s already dominant position in this category with an impressive 46.7 percent market share in Chromebooks.(1)

Acer’s early lead in the Chromebook space you could understand from my earlier Leading PC vendors of the past: Go enterprise or die! [Nov 7, 2013] post.

The combination of additional real estate on the vibrant 13.3-inch display, industry-leading battery life of up to 13 hours,(2) and a thin and light fanless design makes the Acer Chromebook 13 the ideal choice for customers who want additional screen real estate along with a portable and productivity-boosting design. The Acer Chromebook 13 is available in two options – one with a full HD display with 1920×1080 resolution and another model with a 1366×768 display.(2)

The Acer Chromebook 13 delivers the ultimate in mobility with the Tegra K1 with a 192-core GPU, enabling customers to get more done throughout their work day and after hours, no matter where they take their Chromebook. Customers will experience a first-rate multi-tasking experience when keeping multiple tabs open, playing a video and doing more all at once.

“The Acer Chromebook 13 is an ideal device for families who need a new or additional computer to share for school projects, research, entertainment and fun online,” said Sumit Agnihotry, Acer’s vice president of product marketing. “The display is large and vibrant, so everything from homework to video is incredibly crisp and detailed. Plus, up to 13 hours of battery life means families can use the device all day for work or school and not have to recharge it for nighttime activities like homework and watching movies.”

The Acer Chromebook 13 uses the NVIDIA Tegra K1 4-Plus-1™ quad-core ARM Cortex A15 CPU plus a third-generation battery-saver core to provide up to 13 hours of battery life(2). Tegra K1 uses an NVIDIA Kepler architecture-based GPUwith 192 programmable GPGPU cores to process rich and detailed graphics.

“The Acer Chromebook 13’s long battery life, speedy multitasking and advanced graphics highlight the tremendous experiences that Tegra K1 delivers,” said Kaustubh Sanghani, general manager of the mobile PC business unit at NVIDIA. “Acer’s innovations and Tegra K1 will make the Chromebook 13 a popular device with consumers.”

Two Options Provide Choice of Full HD Display, Extra-Long Battery Life
The Acer Chromebook 13’s large 13.3-inch display comes in two models to give customer the options that fit their needs. The version with a full HD 1920×1080 display shows video in lifelike 1080p resolution and provides up to 11 hours of battery life.(2) In addition, models will be available with a bright and crisp 1366×768 resolution display that provides even longer battery life of up to 13 hours.(2) Both displays will have Acer ComfyView™ anti-glare panels that minimize light reflection that can cause eye fatigue. In addition, the Acer Chromebook 13’s display provides rich colors and excellent contrast, while the large size helps accommodate the spacious keyboard that is both comfortable and maximizes productivity.

Designed with mobility in mind, the Acer Chromebook 13 has an incredibly thin and light design that measures only 0.71 inches thin and weighs only 3.31 pounds. In addition, the Acer Chromebook 13 is fanless, so the system is nearly silent while operating. The Acer Chromebook 13 keeps customers in touch and connected with 802.11ac WiFi, which provides speeds up to three times faster than 802.11n. Plus, the 2×2 MIMO antenna helps ensure reliable throughput.

Starts Quickly; Connects to Popular Devices
The new Acer Chromebook 13 boots up in less than 9 seconds and resumes nearly instantly from sleep mode. This enables customers to more quickly enjoy the more than 30,000 free and paid apps, themes and extensions in the Chrome web store.

Customers will enjoy faster data transfers of photos and video with the Acer Chromebook 13’s two USB 3.0 ports. Plus, streamed video and movies can be shared on a larger display or home TV using the Acer Chromebook 13’s HDMI port. Video chats and Google Talk are all enhanced by the Chromebook’s HD webcam that provides 720p HD audio/video recording as well as the two built-in stereo speakers and microphone.

Fun to Share, Easy to Protect

Chromebooks are simple to use and ideal for sharing by multiple users, such as families, schools or at different shifts at a business. Users can log into their own account to access Gmail, Docs, website bookmarks and other information. Storage on Google Drive(3) protects files, documents, and photos safely in the cloud, and ensures that the most current version of the file or document is always available and safe, even if the Chromebook is lost or stolen. Plus, Acer Chromebook 13 users can view, edit, create and collaborate on-line and off-line with a growing number of programs, such as Microsoft Office documents and Gmail.

Security is a key benefit of the Chrome operating system, as it’s automatically updated to guard against ever-changing online threats. This is especially useful for families and schools who want to protect children.

Pricing and Availability

Several models are available now for pre-sale:

  • The Acer Chromebook 13 CB5-311-T9B0 has the 1920×1080 full HD [1920 x 1080] display, 2GB of memory and a fast 16GB Solid State Drive(4). It is priced at only $299.99 and is available now for pre-sale at BestBuy.com.
  • The Acer Chromebook 13 CB5-311-T1UU has a 1920×1080 full HD [1920 x 1080] display, 4GB of memory and a fast 32GB Solid State Drive(4). It is priced at only $379.99 and is available now for pre-sale at Amazon.com and the Acer Store.
  • The Acer Chromebook 13 CB5-311-T7NN has a 1366×768 display, 2GB of memory and a fast 16GB Solid State Drive(4). It is priced at only $279.99 and is available now for pre-sale at Amazon.com and the Acer Store.

Acer is also offering a configuration via resellers that will be sold to commercial and education customers. That model comes with a 1366×768 display, 4GB of memory, a fast 16GB Solid State Drive(4) and will be priced at $329.99.

Acer systems are backed by professional, high-quality technical support. The company’s online community at community.acer.com provides customers discussion forums, answers to frequently asked questions and the opportunity to share ideas for new and enhanced services and products.

    Prices listed are manufacturer suggested retail prices and may vary by location. Applicable sales tax extra.
    1. Q1 2014 NPD data, U.S. market.
    2. The Acer Chromebook 13 model with the full HD 1920×1080 display provides up to 11.5 hours of battery life. The Acer Chromebook 13 model with the 1366×768 display provides up to 13 hours of battery life. Battery life as measured with Google power_LoadTest (http://www.chromium.org/chromium-os/testing/power-testing). Actual battery life varies by model, configuration (including storage capacity, RAM capacity, processor in use, display type and resolution, etc.), applications, power management settings, operating conditions, and utilized features.
    3. More information on Google Drive on Chrome devices:https://support.google.com/chromebook/answer/2703646?p=driveoffer&rd=1
    4. Accessible capacity varies: (MB = 1 million bytes; GB = 1 billion bytes)

    2. Recently introduced Chromebooks (11.6”)

    Acer Chromebook 11 laptop – The right choice for a smart buyer (features & highlights) [Acer YouTube channel, Aug 21, 2014] with Intel’s BayTrail-M (Intel Mobile Celeron) N2830 platform (availability?)

    As the best value Chromebook – the Acer Chromebook 11 has everything you need. The faster wireless connection on the market keeps you closer than ever, no matter where life takes you. Long-lasting battery life powers past competitors on just a single charge. Acer Chromebook 11 makes life on-the-go easy.

    From Acer’s Chrome Devices Now Expand to Include New Chromebox CXI and Chromebook 11 [press release, Aug 21, 2014]

    Acer Chromebook 11

    The Acer Chromebook 11 enhances life on-the-go with an even faster wireless connectivity and long-lasting battery life that extends productivity from day to night on a single charge. There are two models: the CB3-111 consumer model in an immaculate Moonstone White color, and the C730 commercial/education model in Granite Gray.

    The Acer Chromebook 11 meets the needs of students, families, anyone on a budget, as an affordable secondary device, and for the growing number of customers who enjoy the Google ecosystem for school, work and entertainment.

    Faster Connection and Long-lasting Battery

    Up to 3x faster(1) connection is achieved via the latest 802.11ac wireless communication, which vastly improves coverage in distance and range. The Chromebook 11 features Bluetooth 4.0 technology and one USB 3.0 port that lets users share and send data faster. Up to 8.5 hours(2) of battery life means users can fit in plenty of work and entertainment throughout the day.

    Fast Boot and Connectivity

    The Intel® Celeron® N2830 processor(4), based on the Intel Bay Trail M architecture, and eMMC 16/32 GB solid-state drive helps this system boot fast(5), perform well without slowing over time. The Chromebook 11 comes with an 11.6-inch HD 1366 x 768 display, 16:9 wide aspect ratio, and Acer ComfyView™ LED backlit TFT LCD. Input/output ports include USB 3.0 and USB 2.0 ports for quick and easy data sharing and external storage, SD™ Card reader, combo headphone/speaker jack, and HDMI® port.

    The Chromebook 11 (CB3-111) for consumers is slimmer than its predecessor measuring 299 x 202 x 18.65 mm with a reduced height, and weighs 1.1kg (2.43 lbs.) so it can be taken anywhere for exploring online, staying in touch, running Chrome apps and more.

    The Chromebook 11 (C730) for the commercial/education with improved structural design can withstand a 60% higher drop test than the consumer model, and features a water spill proof keyboard/touchpad with drainage channel designed to tackle the higher possibilities of spills and drops in businesses and schools. This model measures 302.6 x 206.6 x 21.75 mm and weighs 1.4 kg (3.09 lbs.)

    Speed, Security and Synchronicity of Acer Chrome-based Devices

    The New Acer Chromebox CXI and Chromebook 11 pack all the speed, security and auto-synchronization convenience of Chrome OS.

    Powerwash – Easy Factory Reset

    Powerwash enables IT to quickly and easily clear all local user data stored in the Chrome device by resetting it to its original factory state. Using this feature, all data stored on the device such as files, photos, owner permissions, and saved networks, will be deleted for all accounts. After clearing this data, the IT professional is guided through the initial setup again. Resetting the device doesn’t affect the accounts themselves, or any data synced to these accounts.

    Always Up to Date, Easy to Use

    IT professionals will find that it’s simple to control a fleet of Chrome devices via the web-based Google Management Console, which makes it possible to deploy an app from 1 to thousands of Chrome-based devices with a single click of a button. The OS and all downloaded applications are automatically updated every six weeks, saving IT staff’s time and assuring users the freshest software and security features.

    Acer’s Chrome devices come with pre-installed web apps and over 30,000 additional apps, themes and extensions on the Chrome Web Store. Since all applications run within the browser, there is little to no computer management required.

    Acer’s Chrome devices are easy to use. After the user signs into Chrome with a Google account, they’re immediately immersed in the Google ecosystem and signed into Google services. Their bookmarks, history and settings are synced across all of their devices and computers running Chrome. Once logged in, they can surf the Internet with the Chrome browser, read and send emails from Gmail, search the web with Google Search, create documents, spreadsheets, presentations and more with Google Drive, as well as watch videos from YouTube, etc.

    Fun to Share, Easy to Protect

    Chrome devices are simple to use and ideal for sharing by multiple users, such as families, schools or at different shifts at a business. Users can log into their own account to access Gmail, Docs, website bookmarks and other information. Storage on Google Drive 4 protects files, documents, and photos safely in the cloud, and ensures that the most current version of the file or document is always available and safe, even if the Chrome device is lost or stolen. Plus, users of Acer Chrome devices can view, edit, create and collaborate on-line and off-line with a growing number of programs, such as Office documents and Gmail.

    Layers of Tight Security

    Multiple layers of security features including data encryption and verified boot defend the device against online threats, malware and viruses. Every time the Chrome OS boots, it checks the integrity and validity of system files. If it detects any anomaly or unauthorized change, the system will restore from a prior backup. User and system files are stored on separate partitions that keep data secure and make restoration from a backup simple. Individual user’s data is encrypted automatically and protected by the TPM 1.2 chip, which generates and stores secure cryptographic keys, enabling IT professionals to read data from a stolen Chrome device.

    Via individual accounts, data is kept safe when the device is used by multiple users. Storage on Google Drive safeguards files, documents, and photos in the cloud, and ensures that the most current version is always available. IT staff will also appreciate that the Acer Chromebox CXI has a Kensington lock to secure them to a desk or mobile cart.

    (1) Based on a IEEE 802.11ac draft specification. Actual speed will vary based on range, connection rate, site conditions, size of network, and other factors.
    (2) Battery life may vary depending on model and configuration. Based on Google power_LoadTest.
    (3) 330 ml of liquid water spillage resistant keyboard and touchpad design on Acer Chromebook 11 – C730 only.
    (4) Accessible capacity varies: (MB = 1 million bytes; GB = 1 billion bytes).
    (5) Reg: Boots up under 10 seconds. Source: Chromium OS Fast Boot.

    Lenovo N20/N20P [11.6”] Chromebook hands-on [SlashGear YouTube channel, May 5, 2014]  !! The N20p comes with a 300-degree hinge that allows the screen to be turned around for using the notebook in all-touch mode!! with Intel’s “BayTrail-M” [Mobile] Celeron N2930 or N2830 platform, available beginning in July and August, respectively

    The Lenovo N20 Chromebook is expected to go on sale in July, priced at $279. It’ll be followed by the N20p Chromebook in August, priced at $329. They are offering a choice of touch or non-touch 1366 x 768 displays respectively, and up to eight hours of battery life. The N20 is of a more traditional design, but the N20p borrows from the YOGA and others in Lenovo’s line-up, with a 300-degree hinge that allows the screen to be turned around for using the notebook in all-touch mode. Under the hood, there’s Intel’s “Bay Trail” Celeron [N2930 or N2830] processor, paired with up to 4GB of memory and 16GB of storage.So far, Lenovo’s focus with Chrome OS has been on the education market. That’s finally changed to accommodate consumers, however, with the N20 and N20p offering the same three-second boot time and the usual suite of cloud-centric Google apps. More information: http://www.slashgear.com/lenovo-n20n20p-chromebook-hands-on-05327776/

    Lenovo Breaks The Mold By Going Multimode On Its First Consumer Chromebook [press release, May 6, 2014]

    Portfolio offers thin and light designs and breakthrough dual mode, touch experience

    • N20 Chromebook in clamshell design offers familiar laptop feel with choice features
    • N20p Chromebook features an HD 10-point multitouch display and easily converts from Laptop to Stand mode for added flexibility and new ways to use it
    Lenovo(HKSE: 992) (ADR: LNVGY) today announced Lenovo’s first consumer Chromebooks, the N20 Chromebook and N20p Chromebook. These devices offer consumers choices of two ways to enjoy the Chrome experience in a thin and light form factor with a set of comprehensive technologies – all at an unbelievably affordable price starting at $279. While the N20 provides the familiar comfort of a traditional laptop, the N20p Chromebook breaks the mold for Chromebooks with its innovative multimode design featuring Laptop and Stand modes.
    These new additions complement Lenovo’s Chromebook family, which includes the ThinkPad 11e Chromebook and the ThinkPad YOGA 11e Chromebook, built with the needs of education customers in mind.
    Fusing Innovative Hardware
    Designed for maximum portability, both Chromebooks are thin and light at less than 17.9mm and weighing less than 1.4 kg. With an 11.6-in 1366×768 HD screen, users can comfortably see their work and type by using the full-sized keyboard with its oversized trackpad and attractive cool-touch palmrest.
    While the N20 Chromebook features a traditional laptop design, the multimode N20p Chromebook’s keyboard flexes 300° backward to convert from Laptop mode to Stand mode. Stand mode gives users a new way for watching videos up close and interacting with the 10-finger touchscreen for playing games and browsing.
    With up to eight hours of battery life1 and powered by an Intel® Celeron processor with integrated graphics, users can quickly and seamlessly boot the Chromebook and immediately begin their task, whether it’s watching videos, video chatting using the high definition web cam, listening to music, surfing the web and more without bringing their power cord along. They can also stay constantly connected with its WiFi and Bluetooth 4.0. The Chromebooks also come with up to 16 GB internal and up to 100 GB of free cloud storage from Google Drive for storing digital content.
    The Chrome Experience 
    Combining the Chrome experience with Lenovo’s innovative multimode Chromebook design offers an unmatched value for consumers. With the Chrome operating system, the Chromebooks boot within seconds. Chrome offers fast, automatic updates and tens of thousands of apps available via the Chrome Web Store.
    Users can work on their N20 Chromebook and N20p Chromebook offline writing email on Gmail and creating documents with Google Docs. To facilitate working with other people and devices, the Chromebooks allow for opening, editing and sharing Microsoft Word and Excel files. Users can even share their Chromebook with someone else through a guest’s personal Google account or by enabling Guest Mode, and they can enable monitoring of children’s web browsing with supervised user profiles. With the Chromebooks, users can print anywhere via Google Cloud Print, and they can employ remote desktop access to access software on their machine.
    Quote
    “Our first consumer Chromebooks perfectly complement people’s changing mobile digital lifestyles,” said Dilip Bhatia, vice president, worldwide marketing and design, PC Group, Lenovo. “Equipped with thousands of apps, the N20 and N20p Chromebooks are also fast, secure and incredibly simple for anyone to use and manage. With touch and two unique modes on the N20p Chromebook, users are getting a great technology experience at a handsome price.” 

    Pricing and Availability2
    Pricing for models of the N20 Chromebook and N20p Chromebook start at $279 and $329, respectively. They will be available beginning in July and August, respectively, via Lenovo retailers and www.lenovo.com.

    ASUS C200 [11.6”] Chromebook Review. Detailed. HQ. [Steve Paine YouTube channel, Aug  4, 2014] with Intel’s BayTrail-M (Intel Mobile Celeron) [N2830] platform, was first available in U.S. since May 6, 2014 (Amazon) and as of Sept 7. its MRP is $249 while you can buy it on Amazon for $230 

    2-weeks of testing. Here’s the review video for the ASUS C200 Chromebook. The details can be found in my review at Notebookcheck.net. Please ask questions in the comments, and subscribe! Full review here: http://www.notebookcheck.net/Asus-C200MA-KX003-Chromebook-Review.121927.0.html

    See also: Introducing the New ASUS Chromebooks C200 and C300 [press release, May 6, 2014] where it was stated that:

    … The ASUS Chromebook C200 and C300 will begin shipping in the US at the end of June 2014 with a starting price at $249.99. …

    New Chromebooks: in more shapes, sizes and colors [Google Chrome Blog, May 6, 2014]

    Spring has finally arrived in the U.S. And with the new growth the season brings, we’re happy to expand our Chromebook family. Together with Intel, today we’re announcing a new lineup of Chromebooks with Intel inside from leading manufacturers Acer, Asus, Dell, HP, Lenovo, LG and Toshiba—spanning an entire range of shapes, sizes, colors and configurations.

    Lenovo’s N20p Chromebook and Thinkpad YOGA 11e Chromebook offer options for touchscreen and hinge designs that enable tablet or tented-angle usage, so they’re just as easy to use at your desk or coffee table, on your lap or at school.

    ASUS is following the success of their Chromebox (now the most popular desktop on Amazon.com) by introducing two new laptops: The ASUS C200 Chromebook (11-inch) and ASUS C300 Chromebook (13-inch).

    New versions of the Dell Chromebook 11 and the Acer C720 Chromebook will be powered by Intel’s Core i3 processor, which packs the additional performance to help you get things done faster. These new Chromebooks, along with a new 13-inch Toshiba model, a Chromebox from HP, and the LG Chromebase (the first all-in-one computer running Chrome OS), will be available in retail over the next few months.

    3. Gartner Says Chromebook Sales Will Reach 5.2 Million Units in 2014 [press release, Aug 11, 2014]

    Chromebook Sales Expected to Nearly Triple by 2017

    In 2014, Sales to Consumers Will Account for Over Half of All Chromebook Sales

    Sales of Chromebooks* will reach 5.2 million units in 2014, a 79 percent increase from 2013, according to Gartner, Inc. By 2017, sales of Chromebooks are set to nearly triple to reach 14.4 million units.
    “Competition in the Chromebook market is intensifying as more vendors launch Chromebooks, with eight models in the market in 2014,” said Isabelle Durand, principal analyst at Gartner. “Now that the PC market is no longer growing strongly, vendors are searching for new business opportunities. They launched Chromebooks to revive interest in sub-$300 portable PCs once the netbook bubble had burst.”
    Demand for Chromebooks is mainly driven by the education sector in the U.S. Gartner estimates that the education sector accounted for nearly 85 percent of Chromebook sales in 2013. In addition, of the 2.9 million Chromebooks sold during 2013, 82 percent were sold in North America, making it the major market for Chromebooks globally.
    While Chromebooks are primarily used by the education sector, they will also have a place in businesses for specific workers, such as staff in banking, financial services, estate agents and hotel receptionists. “So far, businesses have looked at Chromebooks, but not bought many,” said Ms. Durand. “By adopting Chromebooks and cloud computing, businesses can benefit; they can shift their focus from managing devices to managing something much more important — their data.”
    These devices also encourage more collaboration and sharing of content. As more users work collaboratively in the cloud, collaborative working practices are likely to become more common which may further increase the appeal of Chromebooks and similar devices.
    In 2011, Samsung and Acer, very consumer-focused vendors, were the first vendors to invest in Chromebooks, and were the two dominant leaders in the market in 2013 (see Figure 1) “While there is less presence in the business market, and a limited product portfolio for midsize businesses, Chromebooks could open doors to the business market,” said Ms. Durand.
    Acer’s early lead in the Chromebook space you could understand from my earlier Leading PC vendors of the past: Go enterprise or die! [Nov 7, 2013] post. Meanwhile Samsung earliest lead was documented in the very end of my Nexus 7: Google wanted it in 4 months for $199/$245, ASUS delivered + Nexus Q (of Google’s own design and manufacturing) added for social streaming from Google Play to speakers and screen in home under Android device control [June 28, 2012] post.

    Figure 1. Chromebook Vendors’ Shares of Unit Sales to End Users, Worldwide, 2013

    image
    Source: Gartner (July 2014)
    By selling 1.7 million units in 2013, Samsung led the Chromebook market globally. It was especially dominant in the education market, having the most popular devices in primary and secondary schools. Acer, which had a 21.4 percent market share in 2013, designs Chromebooks with a consistent focus on delivering the best value for money. It uses Intel, rather than ARM-based, CPUs because its target consumers are price-sensitive.
    HP was the No. 3 vendor, with a 6.8 percent share of Chromebook shipments, and Lenovo (which did not enter the market until last year) accounted for 6.7 percent of shipments in 2013. HP was the only vendor to launch a Chromebook with a 14-inch screen. HP positions itself as a provider of solutions and services for businesses, and its large installed customer base in the business and education markets should provide it with a strong competitive advantage in the Chromebook market going forward. Lenovo’s Chromebooks are very rugged, compared with the competition, and therefore ideal for primary and secondary school pupils. However, Lenovo needs to manage its devices portfolio in such a way as to avoid selling so many Chromebooks that it undermines sales of its other ThinkPads — which provide better margins.
    Chromebooks will remain a niche market during the next five years. To reach a wider audience, vendors need to offer better features that address cloud-based usage patterns: faster connectivity, faster memory access, faster and larger solid-state drives, and strong user support in the education, business and consumer segments. “Making a competitive Chromebook is not just a matter of hardware and price; what is most important is to show how the device’s cloud-based architecture provides genuine advantages to users,” said Ms. Durand.
    More detailed analysis is available in the report “Competitive Landscape: Chromebooks, Worldwide.” The report is available on Gartner’s website at http://www.gartner.com/document/2811820.
    Advertisements

    Wintel rebirth amid the stock market turning negative about the Wintel future

    Despite of the Intel video of a year ago getting totally new meaning this week:

    with:

    the stock market has just turned negative about the future of both companies:

    image
    source: http://seekingalpha.com/symbol/INTC

    image
    source: http://seekingalpha.com/symbol/MSFT?s=msft

    An explanation for that:

    Why I Sold All Of My Intel Shares This Week [a “casual investor” by nickname Quoth the Raven on ‘Seeking Alpha’, April 3, 2014]

    Summary

    • Intel was upgraded by a Piper Jaffray analyst, who cited a slowing PC market decline.
    • The PC market, sans Mac, has been on a decline that hasn’t ended, despite people like myself predicting it would have bottomed by now.
    • I sold my Intel shares for the time being and am grazing greener pastures.

    By now, we all know some of the questionable points about Intel’s (INTC) business. In the past, I’ve written about the company being a little slow on the uptake when it came to mobile and tablet sales. Most recently I’ve questioned the company’s vision for jumping into cloud computing with a major investment and abandoning their in-house Hadoop project, ultimately leading to a major waste of money and resources.

    First things first; I sold out of my Intel long position the other day, not necessarily discounting the company to be a long-term hold again at some point in the future. I needed the capital for other purposes, evaluated the many positions in my portfolio, and found the most unease about Intel – so, I sold – for now.

    And, sure enough, right after I sold, Seeking Alpha came out and reported that Piper Jaffray came out and upgraded the stock:

    • As part of a change of coverage for chip stocks, Piper is upgrading Intel to Overweight, and downgrading Broadcom (BRCM) to Neutral.
    • The firm thinks Intel will benefit from stabilizing PC sales, and is worried about Broadcom’s mobile customer concentration (presumably with Apple and Samsung).
    • IDC still expects PC shipments to fall another 6% in 2014. But Y/Y decline rates have been narrowing in recent quarters.
    • OTR Global recently reported Broadcom’s 3G baseband chip sales to Samsung have fallen sharply. Samsung has also taken steps to increase its use of in-house Wi-Fi and Bluetooth chips, though that hasn’t stopped Broadcom from continuing to secure combo chip design wins.
    • Apple bought Bluetooth chipmaker Passif Semi last year (possibly for iWatch R&D), but hasn’t yet done anything to suggest it’s working on Wi-Fi chips.

    When I dug a little deeper into the reasoning behind the upgrade, one thing perked my ears up. Piper is coming out and assuming that the PC market is going to continue to slow and then eventually bottom. I thought this very same thing six months ago. Since then, I’ve continued to watch the PC market decline – albeit slower now – but it has yet to hit a bottom.

    Again, Intel’s biggest friend here has been Mac, which has been able to buck the overall trend of the PC market and continue to sell well. Intel leveraging its relationship with Apple (AAPL) at this point remains a key factor in their success.

    As the main constituency of Intel products travel through the sales of PCs, this continues to remain a point of unease for Intel. Additionally, Piper is seemingly betting on a flawless execution and growth of Intel’s Quark chipset which certainly is possible, but remains to be seen at this point.

    Gartner’s numbers, shown below, continue to show a decrease in PCs for 2015, and an increase in both tablets and mobilewhere Intel still does not have a steady foothold.

    (click to enlarge – source)

    image

    Further, the headlines surrounding the market that even I predicted would have stabilized by now, continue to look ugly. cnet reported:

    PC sales will continue to nosedive this year as more consumers scoop up mobile devices, says a new report from Gartner.

    Global shipments of personal computers will total 276.7 million in 2014, Gartner forecast on Thursday, a 6.6 percent drop from last year. On the flip side, tablet shipments will jump by 38.6 percent thanks in part to greater demand in regions outside North America.

    But the number of people replacing their aging PCs with tablets is actually expected to decline.

    But what about globally, you ask? I asked the very same thing – same uneasy headlines, different countries. We continue to see reports, like this one out of Taiwan, claiming that PC sales are poised to decline:

    Total PC sales in Taiwan are poised to decline for the fourth consecutive year, as consumers continue to favor mobile devices that are less expensive than, but as productive as, their pricier counterparts, International Data Corp [IDC] forecast yesterday.

    National PC sales are expected to fall by 5.1 percent to 2.55 million units this year, following a 15.6 percent fall last year, the market research firm said in a report.

    Desktop computers are projected to account for 60 percent of total PC sales this year, with notebook computers making up the remaining 40 percent, the report said.

    Last year, desktop and notebook sales in Taiwan reached 1.68 million and 1.01 million units respectively, it added.

    But when are we going to hit the coveted bottom that we continue to talk about? It is coming, possibly, but it sure isn’t here yet. And, as long as these sales continue to decline, Intel remains at a vulnerable point as a company. Especially with the questionable vision they have shown of late.

    Again, this data [dated March 5] from IDC is once again suggesting that PC sales are going to decline more than we expected this year:

    Shipments of new personal computers, most of them equipped with Microsoft Windows (MSFT), will decline more in 2014 than thought a few months ago, researcher IDC said Tuesday.

    IDC said that PC shipments will drop by 6% from the year before to approximately 296 million, a smaller number than it forecast three months ago, when it said global shipments would decline 4% in 2014.

    Last year, shipments contracted by 10% compared to 2012, dropping to about 315 million new PCs.

    IDC revises its numbers quarterly, said Rajani Singh, an analyst with IDC, who pointed out that as the market changes, the company modifies its forecasts, sometimes up, sometimes down.

    Even though I thought their new incentive-based pay program was a good idea, there were many that disagreed with me and thought it was bad for business. You could say the same, again, about the company’s recent foray into cloud computing. People ask, “Is it too little, too late?” Why does it seem like Intel is just throwing everything against the wall to see what sticks?

    (click to enlarge)

    image

    Do I think Intel is an absolutely horrible stock to be in for the long-term? Of course I don’t. It pays a dividend, has a good balance sheet, and is going to be around for many years to come. Do I think Intel is ripe for a short to mid-term trade? Absolutely not. I think there’s still work that needs to be done at this point before we see Intel push up towards $30/share and, thusly, I made my decision to sell my Intel shares for the time being and enter an Intel holding pattern.

    Best of luck to all investors.

    Mobile Cloud Computing: proven questions and statements about the current and future state-of-the-market

    • Is Android Becoming the New Windows?
    • Tablets to Outsell PCs Worldwide by 2015
    • Android Blows Past iOS in Global Tablet Market
    • Android To Retain Big Lead In Maturing Smartphone Market
    • The Price Gap Between iOS and Android Is Widening
    • In Just 2 Years, Google And Facebook Have Come To Control 75% Of All Mobile Advertising
    Note: In addition keep in mind at least the fact that Bloomberg (Businessweek) legitimizes Allwinner and Rockchip as challengers to Intel and Qualcomm via the tablet space, as well as Spreadtrum in the smartphone space [‘Experiencing the Cloud’, March 18, 2014]. More facts of such kind:
    Alibaba gets Tango for its push into the U.S. and the whole Western world [‘Experiencing the Cloud’, March 20, 2014]
    Chinese smartphone brands to conquer the global market? [‘Experiencing the Cloud’, March 18, 2014]
    MediaTek is repositioning itself with the new MT6732 and MT6752 SoCs for the “super-mid market” just being born, plus new wearable technologies for wPANs and IoT are added for the new premium MT6595 SoC [‘Experiencing the Cloud’, March 4, 2014]
    To watch Alisher Usmanov (Алишер Усманов) [‘Experiencing the Cloud’, March 22, 2014]
    Device businesses should have a China-based independent headquarter at least for Asia/Pacific if they want to succeed [‘Experiencing the Cloud’, Jan 28, 2014]
    2014 will be the last year of making sufficient changes for Microsoft’s smartphone and tablet strategies, and those changes should be radical if the company wants to succeed with its devices and services strategy [‘Experiencing the Cloud’, Jan 17, 2014]
    The tablet market in Q1-Q3’13: It was mainly shaped by white-box vendors while Samsung was quite successfully attacking both Apple and the white-box vendors with triple digit growth both worldwide and in Mainland China [‘Experiencing the Cloud’, Nov 14, 2013]
    Leading PC vendors of the past: Go enterprise or die! [‘Experiencing the Cloud’, Nov 7, 2013]
    The question mark over Wintel’s future will hang in the air for two more years [‘Experiencing the Cloud’, Sept 15, 2013]
    • Is Android Becoming the New Windows?
    • Tablets to Outsell PCs Worldwide by 2015
    • Android Blows Past iOS in Global Tablet Market
    • Android To Retain Big Lead In Maturing Smartphone Market
    • The Price Gap Between iOS and Android Is Widening
    • In Just 2 Years, Google And Facebook Have Come To Control 75% Of All Mobile Advertising

    All supported by facts and well researched forecasts by IDC, Gartner and eMarketer.

    image
    Source: Is Android Becoming the New Windows? [Statista, Jan 9, 2014]

    image
    Source: Tablets to Outsell PCs Worldwide by 2015 [Statista, Mach 1, 2014]

    image
    Source: Android Blows Past iOS in Global Tablet Market [Statista, Mach 3, 2014]

    image
    Source: Android To Retain Big Lead In Maturing Smartphone Market [Statista, Mach 4, 2014]

    image
    Source: The Price Gap Between iOS and Android Is Widening [Statista, Feb 14, 2014]

    image
    Source: In Just 2 Years, Google And Facebook Have Come To Control 75% Of All Mobile Advertising [Business Insider India, March 21, 2014]

    In the last two years, Facebook and Google have gone from a position of merely being two big, fast-growing players in mobile advertising to dominating it completely. Combined, they have cornered 75.2% of the entire mobile market in 2013, according to new data by eMarketer.

    In 2014, Google alone is expected to be roughly as big as all other companies combined, as this chart of mobile ad revenues from Statista shows.

    “new data by eMarketer”:
    Driven by Facebook and Google, Mobile Ad Market Soars 105% in 2013 [eMarketer, March 19, 2014]

    Mobile ad spending on pace to reach $31.45 billion this year

    Last year, global mobile ad spending increased 105.0% to total $17.96 billion, according to new figures from eMarketer. In 2014, mobile is on pace to rise another 75.1% to $31.45 billion, accounting for nearly one-quarter of total digital ad spending worldwide.

    Facebook and Google accounted for a majority of mobile ad market growth worldwide last year. Combined, the two companies saw net mobile ad revenues increase by $6.92 billion, claiming 75.2% of the additional $9.2 billion that went toward mobile in 2013. The two companies are consolidating their places at the top of the market, accounting for more than two-thirds of mobile ad spending last year—a figure that will increase slightly this year, according to eMarketer.

    image

    Facebook in particular is gaining significant market share. In 2012, the social network accounted for just 5.4% of the global advertising market. In 2013, that share increased to 17.5%, and eMarketer predicts it will rise again this year to 21.7%. Google still owns a plurality of the mobile advertising market worldwide, taking a portion of nearly 50% in 2013, but the rapid growth of Facebook will cause the search giant’s share to drop to 46.8% in 2014, eMarketer estimates.

    image

    The rapid pace at which mobile has taken over the company’s ad revenue share indicates Facebook’s mobile future. In 2012, only 11% of Facebook’s net ad revenues worldwide came from mobile, and last year, that figure jumped to 45.1%. In 2014, eMarketer estimates that mobile will account for 63.4% of Facebook’s net digital ad revenues. Mobile accounted for 23.1% of Google’s net ad revenues worldwide in 2013, and eMarketer estimates this share will increase to 33.8% this year.

    Chinese smartphone brands to conquer the global market?

    The smartphone market in China became saturated between Q3’12 and Q4’13 as per the below chart from Analysys International (EnfoDesk):

    image

    Note that this chart corresponds to Chinese writing traditions, i.e. in Q2’11 16.81 million smartphones and 51.01 million feature phones were sold, while in Q4’13 97.63 million smartphones and 9.2 million feature phones. Source: 易观分析:2013年第4季度中国手机销量增速放缓,智能手机市场呈现饱和态势 (Analysys analysis: China mobile phone sales growth slowed in the fourth quarter of 2013, the smart phone market is saturated) [EnfoDesk, March 11, 2014]

    Chinese Handset Vendors Will Account for Over 50% of Mobile Handset Sales in 2015 [ABI Research press release, March 10, 2014]

    ABI Research reports that Chinese handset vendors will account for over 50% of mobile handsets in 2015. Chinese vendors already accounted for 38% of mobile handset shipments in 2013 and the ongoing shift in growth to low cost handsets, especially smartphones, will increase their market share.

    Greater China has long dominated the mobile handset manufacturing supply chain, but now its OEMs are beginning to dominate sales at the expense of the traditional handset OEMs, including even Samsung.

    Many of the Chinese OEMs have focused almost exclusively on the huge Chinese market, with little activity beyond its borders, but this is set to change. Huawei (6th in worldwide market share for 2013) and ZTE (5th) have already made an impact on the world stage, but other Chinese handset OEMs like Lenovo—the Motorola acquisition is a clear statement of intent—and Xiaomi are set to join them.

    Chinese vendors already take up five of the top ten places in terms of worldwide market share, despite three of them only really shipping into China. The Chinese vendors highlight the changing shape of the mobile handset market, as the Chinese manufacturing ecosystem, specifically reference designs, enable the next wave of smartphone growth in low cost emerging markets and amongst price conscious consumers everywhere,” said Nick Spencer, senior practice director, mobile devices.

    “South East Asia has already experienced this trend, but ABI Research expects to see the impact of these Chinese vendors increasing in all emerging markets and even advanced markets, especially on prepay,” added Spencer.

    image

    The New Phone Giants: Indian And Chinese Manufacturers’ Fast Rise To Threaten Apple And Samsung [Business Insider India, March 15, 2014]

    The top Indian and Chinese smartphone manufacturers are classically disruptive. They produce products that are “good enough,” at a fraction of the cost of comparable models from premium brands. These ultra low-cost devices are the key to nudging consumers in massively untapped markets like India and Indonesia onto smartphones.

    And these companies are starting to aim higher – producing 4G LTE smartphones that have the same processing power as Samsung and Apple premium devices.

    They’re also far more innovative than they’re given credit for in terms of their strategy, supply chain management, and hardware.

    In a new report from BI Intelligence, we explain why global consumer Internet and mobile companies will increasingly need to work with companies like Xiaomi and Micromax – not to mention Lenovo, Huawei, ZTE, Coolpad, Karbonn, and others – if they don’t want to miss out on mobile’s next growth phase in emerging markets

    • Major local manufacturers now account for two-fifths of China’s smartphone market, and one-fourth of India’s. Xiaomi already sells four of the top 10 best-selling Android devices in China, and operates one of the top five app stores.
    • Combined, the top five manufacturers in China and the top two in India – the “Local 7” in the chart above – are now shipping about 65 million smartphones every quarter, more than Apple, and coming close to drawing even with Samsung.
    • These local manufacturers wield influence in various ways. They run their own successful app stores, mobile operating systems, and mobile services. They also hold the keys to which apps are preloaded on their phones. When BlackBerry wanted to take its BBM messaging service for Android into India, it signed a deal with Micromax.
    • The local manufacturers are not provincial outfits producing knock-offs, as some might be inclined to assume. But their main competitive tool, for now, remains price. Local manufacturers in China and India match the features of more expensive devices and manage to produce comparable hardware at a fraction of the price. A Micromax handset comparable to Apple’s iPhone 5C costs less than one-fourth as much.
    • Xiaomi has used a four-point strategy in its three-year rise to produce four of the most popular phone models in China. We discuss all four aspects, including tight inventory management and crowdsourcing product development feedback.
    • These manufacturers will continue to expand overseas, in search of new growth opportunities. Micromax is in Nepal, Bangladesh, and Sri Lanka. Xiaomi has its eyes on Malaysia and Brazil. Huawei is already in the U.S. For example, it sells a 4G LTE handset on MetroPCS.

    Smartphone Prices Race to the Bottom as Emerging Markets Outside of China Come into the Spotlight for Future Growth, According to IDC [press release, Feb 24, 2014]

    Singapore and London, February 24, 2014 – Emerging markets have become the center of attention when talking about present and future smartphone growth. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, in 2013 the worldwide smartphone market surpassed 1 billion units shipped, up from 752 million in 2012. This boom has been mainly powered by the China market, which has tripled in size over the last three years. China accounted for one out of every three smartphones shipped around the world in 2013, equaling 351 million units.

    Recently the surge in growth has started to slow as smartphones already account for over 80% of China’s total phone sales. The next half billion new smartphone customers will increasingly come mainly from poorer emerging markets, notably India and in Africa.

    “The China boom is now slowing,” said Melissa Chau, Senior Research Manager for mobile devices at IDC Asia/Pacific. “China is becoming like more mature markets in North America and Western Europe, where smartphone sales growth is slackening off.”

    Emerging markets in Asia/Pacific outside of China, together with the Middle East and Africa, Central and Eastern Europe, and Latin America, account for four fifths of the global feature phone market, according to IDC data. “This is a very big market opportunity,” said Simon Baker, Program Manager for mobile phones at IDC CEMA. “Some 660 million feature phones were shipped last year, which could add two thirds to the size of the current global smartphone market.”

    India will be key to future smartphone growth as it represents more than a quarter of the global feature phone market. “Growth in the India market doesn’t rely on high-end devices like the iPhone, but in low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than US$120,” said Kiranjeet Kaur, Senior Market Analyst for mobile phones at IDC Asia/Pacific.

    “Converting feature phone sales to smartphone sales implies a relentless push towards low cost,” added Baker. IDC research shows nearly half the mobile handsets sold across the world have retail prices of less than US$100 without sales tax. Two thirds of those have prices of less than US$50.

    “The opportunity gets larger the lower the price falls,” continued Baker. “If you take retail prices without sales tax, in 2013 nearly three quarters of the US$100-125 price tier was already accounted for by smartphones. Within US$75-100 the proportion was down to just over half, and between $50-75 it was not much more than a third.”

    Many smartphone vendors have begun gearing up for this next wave of cost pressure. Samsung is increasingly switching production to Vietnam, where manufacturing costs currently undercut mainland China. Even Hon Hai, one of the largest contract manufacturers for handsets in China, has announced plans for a plant in Indonesia to furnish a lower production cost base.

    In addition to the table below, an interactive graphic showing worldwide sub-$100 feature phone shipments by region is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

    Worldwide Sub-$100 Feature Phone Shipments by Region, 2013

    Region

    Shipments (M Units)

    India

    212.3

    Middle East & Africa

    150.0

    Asia/Pacific (excluding Japan, China, and India)

    140.7

    Latin America

    76.4

    PRC

    68.1

    Central & Eastern Europe

    43.6

    Western Europe

    39.8

    North America

    13.9

    Total

    744.9

    Source: IDC Worldwide Mobile Phone Tracker, February 24, 2014

    image

    image

    Analysys International: Xiaomi Ranked Among Top Five in Q4, 2013 [March 11, 2014]

    The statistics from EnfoDesk, the Survey of China Mobile Terminals Market in Q4, 2013, newly released by Analysys International, shows that the market share of Samsung, Lenovo, Huawei, Coolpad and Xiaomi ranked the top five of China smartphone in Q4, 2013. The market share of Samsung shrink slightly over the previous quarter, but it still accounted for 15.07 percent of smartphone market and maintain the leading position.

    The release of Apple‘s new product has brought efficiency in Q4, and its market share slightly rebounded. Owning to the release of MI3 (Xiaomi), the market share of Xiaomi up 3.85 percentage points compared to the previous quarter. MI3 still should be bought from booking and the booking is relatively frequent. Meanwhile, the purchase restriction of MI2(Xiaomi) and Red MI(Xiaomi) has been relaxed, coupled with the strategic cooperation between Xiaomi and mobile operators, making it easier to buy custom models as well as contributing to the  enlargement of Xiaomi’s market share. It can be expected that Xiaomi will put more energy into the complement of its retail capabilities and continue to increase their market share.

    From: UMENG Insight Report – China Mobile Internet 2013 Overview [UMENG, March 12, 2014]

    – The number of active smart devices in China exceeded 700 Million by the end of 2013.
    – The five fastest growing mobile apps categories (excluding games) are : news, health & fitness, social networking, business, and navigation. These areas will bring new opportunities for developers in 2014.
    – Socializing your apps is the key to success for developers. Currently among the top 1,000 apps (apps and games) in the Chinese market, 55% of them provide links to Chinese social networking services (e.g. Sina Weibo, Wechat, QQ, Renren) The amount of app content sharing to social network platforms per mobile Internet user per day has tripled in the last 6 months.
    – Social network sharing in game has become incredibly popular on all social networking platforms, 48% of in app sharing traffic to social networks are from games.
    – High-end devices (pricing above 500US$) have a significant market share in China, contributing 27% of total devices. These users have dynamic needs on mobile apps . The users of below 150US$ phones prefer casual games for their entertainment requirements.
    – The year of 2013 became known as the first year Chinese developers took IP seriously with many developers licensing IP from rights holders. By the end of 2013, among the Top 100 games, 20% license 3rd party IP.
    – Over the course of 2013 the percentage of iOS jailbroken devices in the Chinese Mainland fell by 17% to 13% of all devices. Domestic users are becoming more hesitant to jailbreak their devices.

    700 Million active smart devices in China

    • By the end of 2013, the number of active smart devices in China had exceeded 700,000,000, including smart phones and tablets.       
    • In the 4th quarter 59% of new devices were bought by smartphone users upgrading their existing hardware. The remaining new devices where bought by users buying their first smartphone. As smartphone use becomes more commonplace in China new sales are increasingly driven by existing users upgrading, rather than from users purchasing their first smartphone.               

    image

    The market for budget Android phones is strong in China with 57% of devices under 330 USD price range. However over a quarter of users are using high-end smart phones costing over 500USD, 80% of these are iPhones.

    image

    Fragmented Android device market

    • In the 4th quarter of 2013, Samsung and XiaoMi (a local brand) prove to be the most popular Android brands as between them they manufacture all of the top 10 active Android devices.
    • However the Android market is still highly fragmented with hundreds of different handsets on the market. Samsung who manufacture many devices in all price ranges control 24% of the device market, while the domestic manufactures are battling it out with the international brands to extend their market share.

    image

    • In 2013, changes to device connectivity saw a large growth in WiFi connectivity, from 38% at the beginning of  the year to 52% at year end. Mobile Internet infrastructure has become better in China. However Chinese users are still price sensitive to mobile data tariff.       

    image

    • Glossary:   
      Active Device: active device refers to device which has activated at least one app covered by Umeng platform in the stipulated time frame. All  the “devices” in the report refers to “active devices”, not the actual shipment.

    • Data Source:   
      Analysis data in the report is based on over 210,000 Android and iOS apps from the Umeng platform. All data was collected from January to December 2013.

    From: More than 247 million mobile handsets shipped in India during CY 2013, a Y-o-Y growth of 11.6%; over 70 million mobile handsets shipped in 4Q 2013 alone [CyberMedia Research press release, Feb 26, 2014]

    According to CMR’s India Monthly Mobile Handsets Market Review, CY 2013, February 2014 release, India recorded 247.2 million mobile handset shipments for CY (January-December) 2013. During the same period, 41.1 million smartphones were shipped in the country.

    image

    India Smartphones Market

    The India smartphones market during 2H 2013 saw a rise in shipments by 60.3% over 1H 2013, taking the overall contribution of smartphones to 16.6% for the full year. Further, 65.8% of the total smartphones shipped in the country were 3G smartphones during CY 2013.

    image

    Commenting on these results, Tarun Pathak, Lead Analyst, Devices, CMR Telecoms Practicesaid, “CY 2013 was primarily the year of smartphones for the India market, particularly for local handset vendors. A first for the India market was a marginal decline in featurephone shipments on a year-on-year basis. This trend is likely to continue with more vendors focusing on entry level smartphone offerings aimed at the consumer segment.”

    “Nearly 70 vendors operated in the highly competitive India smartphones market in CY 2013, with ‘Tier One’ brands like Apple, Samsung, Nokia, Sony, HTC, LG and Blackberry capturing close to 53% of the total smartphones market, followed by India brands capturing close to 43% of total smartphone shipments. The remaining market of roughly 4% smartphone shipments was captured by China OEM brands, where we expect a few more players to enter the India market directly, instead of continuing as ODM partners to Indian brands”, Tarun added.

    Rapid Growth In Smartphones Offset The Slump Witnessed In Feature Phone Sales In 4Q13, Says IDC [press release, Feb 26, 2014]

    India was one of the fastest growing countries worldwide in terms of smartphone adoption in 2013. According to the International Data Corporation (IDC) in 2013 the smartphone market surpassed 44 million units shipped, up from 16.2 million in 2012.  This surge has been mainly powered by home grown vendors which have shown a tremendous and consistent growth over the past 4 quarters of 2013.

    The overall phone market stood at close to 257 million units in CY 2013 – an 18% increase from 218 million units in CY2012.

    CY2013 also witnessed a remarkable migration of the user base from feature phones to smartphones primarily due to the narrowing price gaps between these product categories.

    image

    Q413 Perspective:

    The India smartphone market grew by 181% year over year (YoY) in the fourth quarter of 2013 (4Q13).  According to International Data Corporation’s (IDC) APEJ Quarterly Mobile Phone Tracker, vendors shipped a total of 15.06 million smartphones in 4Q13 compared to 5.35 million units in the same period of 2012. 4Q13 grew by almost 18% Quarter-on-Quarter.

    The shipment contribution of 5.0inch-6.99inch screen size smartphones (phablets) in 4Q2013 was noted to be around 20% in the overall market. The category grew by 6% in 4Q13 in terms of sheer volume over 3Q13.

    The overall mobile phone market (Feature Phones and Smartphones) stood at 67.83 million units, a 16% growth YoY and a meager 2% growth quarter over quarter (QoQ).The share of feature phones slid further to make 78% of the total market in 4Q13, with the market showing a decline of 2% in 4Q13 over 3Q13.

    image

    The fourth quarter of 2013 witnessed a spike in the smartphone shipments by smaller homegrown vendors like LAVA, Intex which have shown tremendous growth in the past couple of quarters.

    “The growth in the smartphone market is being propelled by the launch of low-end, cost competitive devices by international and local vendors which are further narrowing the price gaps that exist between feature phones and smartphones”, said Manasi Yadav, Senior Market Analyst with IDC India.

    “The international vendors have understood the importance of creating a diverse portfolio of devices at varied price points and are striving to launch cost competitive devices that cater to every segment in the target audience ” comments Kiran Kumar, Research Manager with IDC India.

    Top Five Smartphone Vendor Highlights

    Samsung: Samsung maintained its leadership spot with about 38% in terms of market share. Its smartphone shipments grew by close to 37% from 3Q 2013 to 4Q2013. The fourth quarter saw quite a few new launches across price points by Samsung – however the low-end Galaxy portfolio in smartphones contribute to 50% in terms of shipment volumes

    Micromax: Micromax held on to its second spot with about 16% in terms of market share in 4Q2013. Some of the top selling models were the entry level smartphones like A35 Bolt and A67. The Canvas range of devices has also done well in terms of volume contribution owing to the marketing campaigns launched around them.

    Karbonn: The market share for Karbonn in 4Q2013 was close to 10%, some of the top selling models for this brand were A1+ and A51.

    Sony: Sony managed to make a comeback in the top-5 smartphone vendor list in 4Q13 and garnered a market share of 5%. The top selling models included Xperia M Dual and Xperia C handsets, which are targeted at mid-tier price range.

    Lava : Lava managed to hold onto the number 5 spot in the top-5 smartphone vendor list. The continued traction around the XOLO and IRIS range of devices helped the vendor garner a market share of 4.7% in 4Q13. Some of the top selling models include the newly launched XOLO A500 S and the existing models like IRIS 402 and IRIS 349.

    image

    IDC India Forecast:

    IDC anticipates the growth in Smartphone segment to outpace the overall handset market growth for the foreseeable future. The end-user shift towards mid-to-high screen size products will be amplified by the declining prices and availability of feature-rich localized product offerings. Vendors who are able to differentiate their offerings at affordable prices will maintain a competitive edge and secure a strong position in the mobile phone market in CY 2014.

    From: Gartner Says Annual Smartphone Sales Surpassed Sales of Feature Phones for the First Time in 2013 [press release, Feb 13, 2014]

    Worldwide Smartphone Sales to End Users by Vendor in 2013 (Thousands of Units)

    Company
    2013
    Units
    2013 Market Share (%)
    2012
    Units
    2012 Market Share (%)
    Samsung
    299,794.9
    31.0
    205,767.1
    30.3
    Apple
    150,785.9
    15.6
    130,133.2
    19.1
    Huawei
    46,609.4
    4.8
    27,168.7
    4.0
    LG Electronics
    46,431.8
    4.8
    25,814.1
    3.8
    Lenovo
    43,904.5
    4.5
    21,698.5
    3.2
    Others
    380,249.3
    39.3
    269,526.6
    39.6
    Total
    967,775.8
    100.0
    680,108.2
    100.0
    Source: Gartner (February 2014)
    Worldwide Smartphone Sales to End Users by Vendor in 4Q13 (Thousands of Units)

    Company
    4Q13
    Units
    4Q13 Market Share (%)
    4Q12
    Units
    4Q12 Market Share (%)
    Samsung
    83,317.2
    29.5
    64,496.3
    31.1
    Apple
    50,224.4
    17.8
    43,457.4
    20.9
    Huawei
    16,057.1
    5.7
    8,666.4
    4.2
    Lenovo
    12,892.2
    4.6
    7,904.2
    3.8
    LG Electronics
    12,822.9
    4.5
    8,038.8
    3.9
    Others
    106,937.9
    37.9
    75,099.3
    36.2
    Total
    282,251.7
    100.0
    207,662.4
    100.0
    Source: Gartner (February 2014)
    Top Smartphone Vendor Analysis
    Samsung: While Samsung’s smartphone share was up in 2013 it slightly fell by 1.6 percentage points in the fourth quarter of 2013. This was mainly due to a saturated high-end smartphone market in developed regions. It remains critical for Samsung to continue to build on its technology leadership at the high end. Samsung will also need to build a clearer value proposition around its midrange smartphones, defining simpler user interfaces, pushing the right features as well as seizing the opportunity of bringing innovations to stand out beyond price in this growing segment.
    Apple: Strong sales of the iPhone 5s and continued strong demand for the 4s in emerging markets helped Apple see record sales of 50.2 million smartphones in the fourth quarter of 2013.
    “However, Apple’s share in smartphone declined both in the fourth quarter of 2013 and in 2013, but growth in sales helped to raise share in the overall mobile phone market,” said Mr. Gupta. “With Apple adding NTT DOCOMO in Japan for the first time in September 2013 and signing a deal with China Mobile during the quarter, we are already seeing an increased growth in the Japanese market and we should see the impact of the last deal in the first quarter of 2014.”
    Huawei: Huawei smartphone sales grew 85.3 percent in the fourth quarter of 2013 to maintain the No. 3 spot year over year. Huawei has moved quickly to align its organization to focus on the global market. Huawei’s overseas expansion delivered strong results in the fourth quarter of 2013, with growth in the Middle East and Africa, Asia/Pacific, Latin America and Europe.
    Lenovo: Lenovo saw smartphone sales in 2013 increase by 102.3 percent and by 63.1 percent in the fourth quarter of 2013. Lenovo’s Motorola acquisition from Google will give Lenovo an opportunity to expand within the Americas.
    “The acquisition will also provide Lenovo with patent protection and allow it to expand rapidly across the global market,” said Mr. Gupta. “We believe this deal is not just about entering into the U.S., but more about stepping out of China.” 
    Gartner expects smartphones to continue to drive overall sales in 2014 and an increasing number of manufacturers will realign their portfolios to focus on the low-cost smartphone sector. Sales of high-end smartphones will slow as increasing sales of low- and mid-price smartphones in high-growth emerging markets will shift the product mix to lower-end devices. This will lead to a decline in average selling price and a slowdown in revenue growth.
    In the smartphone OS market, Android’s share grew 12 percentage points to reach 78.4 percent in 2013 (see below). The Android platform will continue to benefit from this, with sales of Android phones in 2014 approaching the billion mark.
    Worldwide Smartphone Sales to End Users by Operating System in 2013 (Thousands of Units)

    Operating System
    2013 Units
    2013 Market Share (%)
    2012 Units
    2012 Market Share (%)
    Android
    758,719.9
    78.4
    451,621.0
    66.4
    iOS
    150,785.9
    15.6
    130,133.2
    19.1
    Microsoft
    30,842.9
    3.2
    16,940.7
    2.5
    BlackBerry
    18,605.9
    1.9
    34,210.3
    5.0
    Other OS
    8,821.2
    0.9
    47,203.0
    6.9
    Total
    967,775.8
    100.0
    680,108.2
    100.0
    Source: Gartner (February 2014)

    Device businesses should have a China-based independent headquarter at least for Asia/Pacific if they want to succeed

    Back in August I found that China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web [Aug 5, 2013]. That statement was strengthened even more recently with MediaTek MT6592-based True Octa-core superphones are on the market to beat Qualcomm Snapdragon 800-based ones UPDATE: from $147+ in Q1 and $132+ in Q2 [Dec 22, 2013; Jan 27, 2014].

    Latest Nokia vs Apple vs Android:
    image

    With a trend analysis of the importance of the Asia/Pacific market in general, and the Chinese market in particular one comes to an even more striking conclusion: except Samsung (as it is just nearby) all dominant players in the mobile device market of today, and especially tomorrow, have to operate from China based headquarters. Otherwise they are unable to take the relevant decisions (unlike what was possible for PC era, just from U.S. based headquarters). This is especially applied to the merged Nokia-Microsoft Device Business!

    image

    Sources:
    Analysys International: China Mobile Phone Sales Hit 100 Million in Q3, 2013 [Nov 8, 2013]
    – Gartner sources: like the latest Gartner Says Smartphone Sales Accounted for 55 Percent of Overall Mobile Phone Sales in Third Quarter of 2013 [Nov 14, 2013]
    IDC Finds Worldwide Smartphone Shipments on Pace to Grow Nearly 40% in 2013 While Average Selling Prices Decline More Than 12% [Nov 26, 2013]
    – For IDC look at Smartphones Expected to Grow 32.7% in 2013 Fueled By Declining Prices and Strong Emerging Market Demand, According to IDC [June 4, 2013] as well (for Worldwide Smartphone Shipments by Market Maturity i.e. emerging and developed). Here is the historical chart embedded there:
     imageDeveloped Markets include: USA, Canada, Western Europe, Japan, Australia, and New Zealand.

    With the latest news release of Jan 27 (Android ends the year on top but Apple scores in key markets) from Kantar Worldpanel Comtech one can compile an almost 2 years long representation of the smartphone trends in the key markets via a set of following charts:

    The latest comments on that (from the news release) by Kantar Worldpanel Comtech:

    Android ended 2013 as the top OS across Europe with 68.6% share, while Apple held second place with 18.5%. Windows Phone continues to show high year-on-year growth, but its share of the European market has essentially remained flat at 10.3% for the past three months.

    Android finished 2013 strongly, showing year-on-year share growth across 12 major global markets including Europe, USA, Latin America, China and Japan. Apple has lost share in most countries compared with this time last year, but importantly it has held strong shares in key markets including 43.9% in USA, 29.9% in Great Britain and 19.0% in China.

    Windows Phone has now held double digit share across Europe for three consecutive months. Unfortunately for Nokia the European smartphone market is only growing at 3% year on year so success in this market has not been enough to turn around its fortunes – reflected in its recent disappointing results. Its performance also deteriorated toward the end of 2013 in the important growth markets of China, USA and Latin America.

    It’s no surprise that everyone is concentrating on high growth China, but currently local brands are proving clear winners. In December, Xiaomi overtook both Apple and Samsung to become the top selling smartphone in China – a truly remarkable achievement for a brand which was only started in 2010 and sells its device almost exclusively online. The combination of high spec devices, low prices and an ability to create unprecedented buzz through online and social platforms has proved an irresistible proposition for the Chinese.

    Additional information for the period was provided by earlier Kantar Worldpanel Comtech news releases:

    Android leads OS U.S. sales, as LG and Nokia see resurgence [Jan 7, 2014]

    In the 3 months ending November 2013, Android maintained its lead of smartphone sales on the U.S., capturing 50.3% of the smartphone market. iOS follows with 43.1% of smartphone sales, an increase month on month, however, down 9.9% versus the same period a year ago, according to data on the U.S. market released today by Kantar Worldpanel ComTech.
    Windows Phone, the third largest OS in the U.S, sold nearly 5% of smartphones in the 3 months ending November 2013, up 2.1% points from the previous year.
    As with the previous period, Verizon maintained its lead as the top smartphone carrier, with just under a third of sales (31.7%). AT&T, in second, had 28.3% of smartphone sales in the 3 months ending November 2013. T-Mobile, overtaking Sprint as the third largest carrier had 13.3% of sales, and was the only major carrier to see growth year on year (up 6.3%).
    The data is derived from Kantar Worldpanel ComTech USA’s consumer panel, which is the largest continuous consumer research mobile phone panel of its kind in the world, conducting more than 240,000 interviews per year in the U.S. alone. ComTech tracks mobile phone behavior and the customer journey, including purchasing of phones, mobile phone bills/airtime, and source of purchase and phone usage. This data is exclusively focused on the sales within this 3 month period rather than market share figures. Sales shares exemplify more forward focused trends and should represent the market share for these brands in future.
    Kantar Worldpanel ComTech Global Strategic Insight Director, Dominic Sunnebo states, “The iPhone 5S and 5C were the two bestselling smartphones in the U.S for the 3 months ending November 2013. However, increased rivalry from Android brands and a resurgence of LG and Nokia, has made year-on-year share gains for Apple difficult. This is especially true on T-Mobile.”
    On T-Mobile, the ‘UNcarrier’ strategy, launched earlier in 2013, has been successful because it has attracted first-time smartphone buyers, looking to upgrade to their first smartphone. Among T-Mobile smartphone buyers in November 2013, 55% of those that purchased an LG and Nokia smartphone were first-time smartphone buyers, compared to just 39% of Apple customers.
    Sunnebo continues, “First-time smartphone buyers remain a key demographic for carriers and brand alike. The lower end iPhone 5C represents an opportunity for Apple to attract these customers. Thus far the majority of 5C customers have come from other smartphone platforms, though if historical trends hold, the lower end model (historically the older iPhone model following the release of a new iPhone), should be able to attract this demographic with its lower price and comparable specs.”

    Apple launch momentum continues [Jan 7, 2014]

    The latest smartphone sales data from Kantar Worldpanel ComTech, for the three months to November 2013, shows Apple’s share of smartphone sales continuing to grow month on month following the release of the iPhone 5S and 5C models. However, its share of most major markets remains lower than the same time last year as it increasingly faces challenges from its rivals.

    While there’s no doubt that sales of the iPhone 5S and 5C have been strong, resurgent performances from LG, Sony and Nokia have made making year on year share gains increasingly challenging for Apple. Windows Phone, for example, is now the third largest OS across Europe with 10.0% – more than double its share compared with last year.

    Apple now accounts for 69.1% of the Japanese market, 43.1% in the United States, 35.0% in Australia and 30.6% in Great Britain.

    Strong sales of the iPhone 5S and 5C can be linked to high levels of customer satisfaction with both models, despite fears that the lower-end 5C could damage Apple’s appeal.

    Some people worried that Apple was risking its historically high consumer satisfaction levels by releasing a lower cost, plastic iPhone. However, the latest data for the US shows that the iPhone 5C has an average owner recommendation score of 9.0/10 versus 9.1/10 for the iPhone 5S. Both devices attract different customers but crucially each group of owners remains very happy with their choice and are recommending it to others.

    Android gains 3% market share each quarter in China [Nov 28, 2013]

    Kantar Worldpanel ComTech is the first continuous panel to gather representative mobile phone data in China. The panel has been created to provide insight including mobile phone ownership, sales, usage, churn, loyalty and pricing in Chinese telecoms market.

    The key points of Q3 report:

    • Android’s steady growth in China is mainly coming from cheaper local brands, consumers are seeking for the ultimate value for money device.
    • There were many speculations about the iPhone 5s and 5c prior their official launch. It actually made negative impact to iPhone Q3 sales, as people were holding out for the new models, and reduced Apple’s sales by almost 50% compared to the previous quarter.
    • Almost a quarter of smartphone sales were made via online channels in 2013Q3. Even though online channels usually offer better price, the ability to test the phone is also a key purchase decision factor for Chinese customers, making it important for manufactures and leading retail chains to develop effective O2O strategies
    • As most Android devices offer similar user experience, consumers are more focusing on cost effective devices.

    image

    ¥ 1000 – ¥ 2000: US$ 165 – US$ 331
    ¥ 2000 – ¥ 3000: US$ 331 – US$ 496
    ¥ 3000- ¥ 4000: US$ 496 – US$ 661

    With Kantar Worldpanel Comtech vendor market shares be very careful as the latest Analysys International: Apple’s Share Declining in China Smartphone Market in Q3, 2013 is providing quite a different picture:

    The statistics from EnfoDesk, the Survey of China Mobile Terminals Market in Q3, 2013, newly released by Analysys International, shows that the sales of China mobile phone (excluding parallel imports and the cottage) hit 102.66 million, up 54.5 percent year on year with a sequential growth rate being 13.6 percent by 2013Q3. Samsung, Lenovo and Coolpad still ranked top three with market share being 18.1 percent, 11.4 percent and 9.0 percent.
    image
    China smartphone sales hit 93.08 million in Q3,2013, rose as high as 89.3 percent with the sequential growth rate being 20.7 percent. Smartphone continued to rise 90.7 percent of the total market share. Compared to 2013Q2, Apple’s share was in the largest decline, down by 1.1 percentage points.
    EnfoDesk Analysys International holds that Apple’s declining of mobile phone sales is mainly due to the small influence of iPhone 5S/5C although it was released in mid-September. The sales of iPhone new products are expected to boost Apple’s overall share in Q4. However, this momentum will not last long, and Apple’s share will ultimately continue to decline.
    image
    Research definition:
    Mobile phone sales refers to the number of mobile phone that sell to the users through various channels. Part of the mobile phone sales data in this report does not include smuggled and parallel goods, see specific data in the report.

    Nokia and Windows global momentum continues [Nov 4, 2013]

    The latest smartphone sales data from Kantar Worldpanel ComTech, for the three months to September 2013, shows Windows Phone now makes up one in 10 smartphone sales across the five major European markets*, has overtaken iOS in Italy, and is gaining momentum in emerging markets. Android remains the dominant operating system across Europe with 71.9%, an increase of 4.2 percentage points compared with the same period last year.

    Windows Phone, driven almost entirely by Nokia sales, continues to make rapid progress in Europe and has also shown signs of growth in emerging markets such as Latin America.

    With the smartphone market in developed countries so congested, it is emerging economies that now present manufacturers with the best opportunity for growth.

    Nokia dominated in Latin America for many years, and while its popularity declined with the fortunes of Symbian it now has an opportunity to regain the top-spot. The majority of consumers in Latin America still own a Nokia featurephone and upgrading to an entry level Lumia is a logical next step. Price is the main barrier in developing markets and the budget Lumia 520 opens the door to smartphone ownership for many.

    Local brands growing in China

    China is increasingly dominated by Android which accounts for 81.1% of the market, up 14.6 percentage points from last year. Domestic manufacturers made up 44% of smartphone sales in the latest period, compared to just 30% the previous year. Huawei, Xiaomi, Lenovo and Coolpad handsets are particularly popular outside of China’s largest cities and represent a more value-for-money option than global brands.

    Chinese consumers are prepared to make a huge investment in their smartphone, with some spending up to 70% of their monthly salary on a new device. With such a high investment, Chinese consumers want to get the best value for money and are increasingly opting for a high-spec local brand over a low-spec global equivalent. The message for global manufacturers is clear – Chinese consumers demand value, and overpriced entry-levels models no longer cut it against increasingly impressive local competition.

    Kantar Worldpanel ComTech: Urban China Smartphone Sales Data to Q313

    image

    Windows Phone nears double digit share across Europe [Sept 30, 2013]

    The latest smartphone sales data from Kantar Worldpanel ComTech, for the three months to August 2013, shows Windows Phone has posted its highest ever sales share of 9.2% across the five major European markets* and is now within one percentage point of iOS in Germany. Android remains the top operating system across Europe with a 70.1% market share, but its dominant position is increasingly threatened as growth trails behind both Windows and iOS.

    Windows Phone has hit double digit sales share figures in France and Great Britain with 10.8% and 12% respectively – the first time it has recorded double digits in two major markets.

    After years of increasing market share, Android has now reached a point where significant growth in developed markets is becoming harder to find. Android’s growth has been spearheaded by Samsung, but the manufacturer is now seeing its share of sales across the major European economies dip year on year as a sustained comeback from Sony, Nokia and LG begins to broaden the competitive landscape.

    Windows Phone’s latest wave of growth is being driven by Nokia’s expansion into the low and mid range market with the Lumia 520 and 620 handsets. These models are hitting the sweet spot with 16 to 24 year-olds and 35 to 49 year-olds, two key groups that look for a balance of price and functionality in their smartphone.

    image

    A key milestone for Android in China  [May 31, 2013]

    Kantar Worldpanel ComTech, the global market leader in longitudinal Telecom research panels, reports at the end of Q1 2013, Urban China Smartphone penetration reached 42%, an increase of 1.2% compared to Q4 2012. According to Kantar Worldpanel ComTech’s latest research in China, most of Smartphone growth comes from new Smartphone adopters, with almost half of Featurephone owners who changed their device in last quarter upgrading to a Smartphone. Craig Yu, Consumer Insight Director at Kantar Worldpanel ComTech, comments:”Featurephones are losing their price advantage as Android Smartphones are rapidly becoming more affordable and delivering better value. We expect to see accelerated Smartphone adoption in China in the coming months.”

    image

    During the first quarter of 2013, Android continued its steady growth in China, marking a key milestone in reaching 50% share of Smartphone Installed Base. At the end of March 2013, Android widened its lead of Smartphone operating systems with a 51.4% market share, an increase of 2.8% compared to the previous quarter. Second and third place was taken by Symbian and iOS, whose market share is 23% and 19.9% respectively. Symbian has declined 2% in the last quarter, whilst iOS remained resilient. Following the same trend, Symbian looks likely to lose its second place to be the third in the next 2 quarters.

    Kantar Worldpanel ComTech also tracks the performance of various mobile device brands, according to its latest report, many Chinese local brands have been working closely with carriers and demonstrated strong growth in the Smartphone market for the first three months of 2013. ZTE, Lenovo and Xiaomi all have experienced share increases.

    image

    The combined market share of above four local brands are at 20%, a 17.6% growth in the past 6 months. Huawei, ZTE, Lenovo, Coolpad & Xiaomi combined make up 1 in 5 of all Smartphones in active use in China-this proportion will continue to grow as Nokia’s existing dominance is challenged.

    Yu continues:”Local manufacturer brands have been able to drive strong growth through bundling their handsets with carriers tariff offers, seeking out new sales channels & combining innovative product design with value to capture many first time Smartphone buyers and those residing in City tiers 2/3/4.

    However, Samsung remains the fastest growing Smartphone brand in China, ended Q1 2013 with 15.2% share of Installed Base (1.5%pts). Craig Yu continues:”Samsung has recently launched the Galaxy S4, selling over 10 million units globally in less than one month-we predict the launch of Galaxy S4 mini in the not too distant future will greatly increase its product reach in urban China.”

    Apple achieves its highest ever Smartphone share in US [Dec 12, 2012]

    The latest smartphone sales data from Kantar Worldpanel ComTech shows Apple has achieved its highest ever share in the US (53.3%) in the latest 12 weeks*, with the iPhone 5 helping to boost sales. In Europe, however, Android retains the highest share with 61% of the market, up from 51.8% a year ago.

    * 12 w/e 25th November 2012

    Apple has reached a major milestone in the US by passing the 50% share mark for the first time, with further gains expected to be made during December.

    Meanwhile in Europe, Samsung continues to hold the number one smartphone manufacturer spot across the big five countries, with 44.3% share in the latest 12 weeks. Apple takes second place with 25.3% share while HTC, Sony and Nokia shares remain close in the chase for third position.

    Although Windows sales in the US remain subdued, Nokia is managing to claw back some of its share in Great Britain through keenly priced Lumia 800 and 610 prepay deals. The next period will prove crucial in revealing initial consumer reactions to the Nokia 920 and HTC Windows 8X devices.

    Nokia continues to find it tough to attract younger consumers in Great Britain. Over the past six months, just 28% of Nokia Lumia 800 sales have come from under 35’s, compared with 42% of all smartphone sales. With the Nokia Lumia 920 being one of the few handsets available on EE 4G, new tariffs may help to change this by attracting early adopters in the coming months.

    Smartphone percentage penetration in Great Britain hit 60% in the latest period, with 83% of all mobile phone sales over the past 12 weeks being smartphones.

    iPhone 5 release slows Android gains [Oct 30, 2012]

    Recent smartphone sales data from Kantar Worldpanel ComTech shows Android continuing to gain share across Europe in latest 12 weeks of sales* increasing its share to 67.1% share, up from 50.9% a year ago. However, its rate of growth has slowed as week one of iPhone 5 sales show iOS gaining in the US and Great Britain.

    My insert (see Q4’12):
    image

    * 12 w/e 30th September 2012

    (Apple iPhone 5 released on 21st September in US, GB, Germany & France. Italy & Spain on 28th September. Not yet released in China & Brazil).

    Apple has increased its share from 18.1% to 28.0% in the past year across Britain, while in the US its share increased by 14.2 percentage points.

    While this latest data set only includes one week of iPhone 5 sales, we can see that in markets with a large number of existing Apple customers, sales have already seen a significant boost. We expect this momentum to be fully realised in the next set of results.

    Tomorrow the UK joins the likes of the US, Germany and much of Scandinavia with the rollout of EE’s superfast 4G network.

    Chinese consumers are rarely loyal to their brands [June 29, 2013]

    Bain & Company, a global business consulting firm, and Kantar Worldpanel, a global leader in consumer panel insights, released the 2012 China FMCG Shopper report in Beijing. In most of 26 of the top consumer goods categories sold in China across packaged foods, beverages, personal care and homecare, covering more than 80 percent of the country’s fast-moving consumer goods (FMCG) market, shoppers who purchase more frequently in a category tend to buy more brands rather than more of the same brands.

    Kantar Worldpanel equips shoppers from 40,000 households throughout urban China with barcode scanners to record their purchases from all channels. The findings dispel several misunderstood notions about how Chinese consumers respond to product brands. Although over 60 percent of Chinese shoppers have said that brands were their top consideration when purchasing (in previous Bain research), in reality, they rarely act on that consideration at the moment of purchase. Instead, they are in a near-constant state of trial, without leading to eventual preference and loyalty.

    Amazon Web Services not only achieved the clear and far dominant leader status in the Cloud Infrastructure as a Service (Cloud IaaS) market, but “the balance of new projects are going to AWS, not the other providers” – according to Gartner

    According to the latest analysis by Gartner, Amazon Web Services (AWS) is:

    1. overwhelmingly the dominant vendor” of the Cloud Infrastructure as a Service (Cloud IaaS) market
    2. a clear leader, with more than five times the compute capacity in use than the aggregate total of the other fourteen providers included in the so called Magic Quadrant (MQ)
    3. appreciated for “innovative, exceptionally agile and very responsive to the market and the richest IaaS product portfolio” which puts AWS into a quite far ahead position even against CSC, the only other in the Leaders quadrant currently

    In addition Amazon Web Services has come up in July with a price cut that reaches 80% on its EC2 cloud computing platform.

    Note that Gartner’s ranking is a complex evaluation, based on various point of views deemed to be most important from vendor-supplier point of view (see in the 3d party explanation of Gartner’s Magic Quadrant included in the Details part). It is not based on any kind of banchmarking, not even those run buy customers according to their specific application requirements. Therefore it is a well know fact that from pure cloud engineering point of view, especially in terms of focussed benchmarks Amazon EC2 is far from being a leader. The latest example of that:
    image

    About the Test
    UnixBench runs a set of individual benchmark tests, aggregates the scores, and creates a final, indexed score to gauge the performance of UNIX-like systems,which include Linux and its distributions (Ubuntu, CentOS, and Red Hat). From the Unixbench homepage:
    The purpose of UnixBench is to provide a basic indicator of the performance of a Unix-like system; hence, multiple tests are used to test various aspects of the system’s performance. These test results are then compared to the scores from a baseline system to produce an index value, which is generally easier to handle than the raw scores. The entire set of index values is then combined to make an overall index for the system.
    The UnixBench suite used for these tests ran tests that include: Dhrystone 2, Double-precision Whetstone, numerous File Copy tests, Pipe Throughput, ProcessCreation, Shell Scripts, System Call Overhead, and Pipe-based Context Switching.

    image

    Price-Performance Value: The CloudSpecs Score
    The CloudSpecs score calculates the relationship between the cost of a virtual server per hour and the performance average seen from each provider. The scores are relational to each other; e.g., if Provider A scores 50 and Provider B scores 100, then Provider B delivers 2x the performance value in terms of cost. The highest value provider will always receive a score of 100, and every additional provider is pegged in relation to that score. The calculation is:
    • (Provider Average Performance Score) / (Provider Cost per Hour) = VALUE
    • The largest VALUE is then taken as the denominator to peg other VALUES.
    • [(Provider’s VALUE) / (Largest VALUE)] * 100 = CloudSpecs Score (CS Score)
    Source: IaaS Price Performance Analysis: Top 14 Cloud Providers – A study of performance among the Top 14 public cloud infrastructure providers [Cloud Spectator and the Cloud Advisory Council, Oct 15, 2013] where—in addition of Unixbench—even more focussed benchmark results are reported as well from the Phoronix Test Suite (i.e. one of benchmark suites in PTS):
    For ‘”CPU Performance” the 7-Zip File Compression benchmark which runs p7zip’s integrated benchmark feature to calculate the number of instructions a CPUcan handle per second (measured in millions of instructions per second, or MIPS) when compressing a file
    For “Disk Performance” the Dbench benchmark which can be used to stress a filesystem or a server to see which workload it becomes saturated and can also be used for prediction analysis to determine “How many concurrent clients/applications performing this workload can my server handle before response starts to lag?” It is an open source benchmark that contains only file-system calls for testing the disk performance. For the purpose of comparing disk performance, write results are recorded.
    For “RAM Performance” the RAMspeed/SMP which is a memory performance benchmark for multi-processor machines running UNIX-like operating systems, which include Linux and its distributions(Ubuntu, CentOS, and Red Hat). Within the RAMspeed/SMP suite, the Phoronix Test Suite conducts benchmarks using a set of Copy, Scale, Add, and Triad testsfrom the *mem benchmarks (INTmem, FLOATmem, MMXmem, and SSEmem) in BatchRun mode to enable high-precision memory performance measurementthrough multiple passes with averages calculated per pass and per run.
    For “Internal Network” the Iperf benchmark which is a tool used to measure bandwidth performance. For the purpose of this benchmark, Cloud Spectator set up 2 virtual machines within thesame availability zone/data center to measure internal network throughput.
    Amazon EC2 performed “equally bad” in these particular bechnmarks. Check the published report.

    THE DETAILS BEHIND 

    The 2013 Cloud IaaS Magic Quadrant [by Lydia Leong on Gartner blog, Aug 21, 2013]

    Gartner’s Magic Quadrant for Cloud Infrastructure as a Service, 2013, has just been released (see the client-only interactive version, or the free reprint). Gartner clients can also consult the related charts, which summarize the offerings, features, and data center locations.

    the best image obtained from the web:

    image

    We’re now updating this Magic Quadrant on a nine-month basis, and quite a bit has changed since the 2012 update (see the client-only 2012, or the free 2012 reprint).

    In particular, market momentum has strongly favored Amazon Web Services. Many organizations have now had projects on AWS for several years, even if they hadn’t considered themselves to have “done anything serious” on AWS. Thus, as those organizations get serious about cloud computing, AWS is their incumbent provider — there are relatively few truly greenfield opportunities in cloud IaaS now. Many Gartner clients now actually have multiple incumbent providers (the most common combination is AWS and Terremark), but nearly all such customers tell us that the balance of new projects are going to AWS, not the other providers.

    Little by little, AWS has systematically addressed the barriers to “mainstream”, enterprise adoption. While it’s still far from everything that it could be, and it has some specific and significant weaknesses, that steady improvement over the last couple of years has brought it to the “good enough” point. While we saw much stronger momentum for AWS than other providers in 2012, 2013 has really been a tipping point. We still hear plenty of interest in competitors, but AWS is overwhelmingly the dominant vendor.

    At the same time, many vendors have developed relatively solid core offerings. That means that the number of differentiators in the market has decreased, as many features become common “table stakes” features that everyone has. It means that most offerings from major vendors are now fairly decent, but only a few are really stand out for their capabilities.

    That leads to an unusual Magic Quadrant, in which the relative strength of AWS in both Vision and Execution essentially forces the whole quadrant graphic to rescale. (To build an MQ, analysts score providers relative to each other, on all of the formal evaluation criteria, and the MQ tool automatically plots the graphic; there is no manual adjustment of placements.) That leaves you with centralized compression of all of the other vendors, with AWS hanging out in the upper right-hand corner.

    Note that a Magic Quadrant is an evaluation of a vendor in the market; the actually offering itself is only a portion of the overall score. I’ll be publishing a Critical Capabilities research note in the near future that evaluates one specific public cloud IaaS offering from each of these vendors, against its suitability for a set of specific use cases. My colleagues Kyle Hilgendorf and Chris Gaun have also been publishing extremely detailed technical evaluations of individual offerings — AWS, Rackspace, and Azure, so far.

    A Magic Quadrant is a tremendous amount of work — for the vendors as well as for the analyst team (and our extended community of peers within Gartner, who review and comment on our findings). Thanks to everyone involved. I know this year’s placements came as disappointments to many vendors, despite the tremendous hard work that they put into their offerings and business in this past year, but I think the new MQ iteration reflects the cold reality of a market that is highly competitive and is becoming even more so.

    A 3d party explanation of the GARTNER IaaS MAGIC QUADRANT 2013 [cloud☁mania, Aug 29, 2013]

    Gartner just released the 2013 update of his traditionally Magic Quadrant for Cloud Infrastructure-as-a-Service. Here are some consideration about the evaluation methodology and MQ players.

    In the context of this Magic Quadrant, IaaS is defined by Gartner as “a standardized, highly automated offering, where compute resources, complemented by storage and networking capabilities, are owned by a service provider and offered to the customer on demand. The resources are scalable and elastic in near-real-time, and metered by use. Self-service interfaces are exposed directly to the customer, including a Web-based UI and API optionally. The resources may be single-tenant or multitenant, and hosted by the service provider or on-premises in the customer’s datacentre.”

    To be included in Magic Quadrant IaaS providers should target enterprise and midmarket customers, offering high-quality services, with excellent availability, good performance, high security and good customer support. For each IaaS provider included in MQ Gartner is offering deep description related to services offer like: datacentre locations, computing issues, storage & network features, special notes, and recommended users. Also deep comments about Strengths & Caution in Cloud adoption are offered for each IaaS provider, despite the MQ positioning.

    Gartner Magic Quadrant for IaaS is a more than eloquent picture of actual status of IaaS major players. IaaS market momentum is strongly dominated by Amazon Web Services both Vision and Execution essentially directions. According Garner analysts, AWS is a clear leader, with more than five times the compute capacity in use than the aggregate total of the other fourteen providers included in MQ. AWS is appreciated for “innovative, exceptionally agile and very responsive to the market and the richest IaaS product portfolio”.

    The Leaders Quadrant is positioning CSC as second player, a traditional IT outsourcer with a broad range of datacentre outsourcing capabilities. CSC is appreciated for his commitment to embrace the highly standardized cloud model, and his solid platform attractive to traditional IT operations organizations that still want to retain control, but need to offer greater agility to the business

    The Challengers Quadrant is including Verizon Terremark – the market share leader in VMware-virtualized public cloud IaaS, Dimension Data – a large SI and VAR entering in the cloud IaaS market through the 2011 acquisition of OpSource, and Savvis – a CenturyLink company with a long track record of leadership in the hosting market.

    Big surprise for Visionaries Quadrant is the comfortable positioning of Microsoft with his Windows Azure platformPreviously strictly PaaS, Azure is becoming IaaS also in April 2013 when Microsoft launched Windows Azure Infrastructure Services which include Virtual Machines and Virtual Networks.  Microsoft place in Visionary Quadrant is motivated by Gartner by the global vision of infrastructure and platform services “that are not only leading stand-alone offerings, but also seamlessly extend and interoperate with on-premises Microsoft infrastructure (rooted in Hyper-V, Windows Server, Active Directory and System Center) and applications, as well as Microsoft’s SaaS offerings.” 

    Between the IaaS providers from the Niche Players Quadrant, we have to note the presence of heawy playes triade:IBM, HP, and Fujitsu. Gartner appreciate IBM for his wide range of cloud-related products and services, IaaS MQ analyse including only cloud offering from SmartCloud Enterprise (SCE) and cloud-enabled infrastructure service IBM SmartCloud Enterprise+. In the same way, from HP’s range of cloud-related products and services Gartner is considered only HP Public Cloud and some cloud-enabled infrastructure services, such HP Enterprise Services Virtual Private Cloud. Fujitsu is one of the few non-American cloud providers, being appreciated by Gartner for the large cloud IaaS offerings, including the Fujitsu Cloud IaaS Trusted Public S5 (formerly the Fujitsu Global Cloud Platform), multiple regional offerings based on a global reference architecture (Fujitsu Cloud IaaS Private Hosted, formerly known as Fujitsu Local Cloud Platform), and multiple private cloud offerings, especially in Asia-Pacific area and Europe.

    Speaking about non-America regions we should observe that significant European-based providers like CloudSigma, Colt, Gigas, Orange Business Services, OVH and Skyscape Cloud Services was not included in this Magic Quadrant. The same for Asia/Pacific region with major players like Datapipe, NTT and Tata Communications.

    Gartner considered also two offerings that are currently in beta stage, and therefore could not be included in this evaluation, but could be considered as prospective players of next MQ edition: Google Compute Engine (GCE)a model similar to Amazon EC2′s, and VMware vCloud Hybrid Service (vCHS) – a full-featured offering with more functionality than vCloud Datacenter Service.

    Additional Gartner blog posts related to that:

    Cloud IaaS market share and the developer-centric world [by Lydia Leong on Gartner blog, Sept 4, 2013]

    Bernard Golden recently wrote a CIO.com blog post in response to my announcement of Gartner’s 2013 Magic Quadrant for Cloud IaaS. He raised a number of good questions that I thought it would be useful to address. This is part 1 of my response. (See part 2 for more.)
    (Broadly, as a matter of Gartner policy, analysts do not debate Magic Quadrant results in public, and so I will note here that I’m talking about the market, and not the MQ itself.)
    Bernard: “Why is there such a distance between AWS’s offering and everyone else’s?”
    In the Magic Quadrant, we rate not only the offering itself in its current state, but also a whole host of other criteria — the roadmap, the vendor’s track record, marketing, sales, etc. (You can go check out the MQ document itself for those details.) You should read the AWS dot positioning as not just indicating a good offering, but also that AWS has generally built itself into a market juggernaut. (Of course, AWS is still far from perfect, and depending on your needs, other providers might be a better fit.)
    But Bernard’s question can be rephrased as, “Why does AWS have so much greater market share than everyone else?”
    Two years ago, I wrote two blog posts that are particularly relevant here:
    These posts were followed up wih two research notes (links are Gartner clients only):
    I have been beating the “please don’t have contempt for developers” drum for a while now. (I phrase it as “contempt” because it was often very clear that developers were seen as lesser, not real buyers doing real things — merely ignoring developers would have been one thing, but contempt is another.) But it’s taken until this past year before most of the “enterprise class” vendors acknowledged the legitimacy of the power that developers now hold.
    Many service providers held tight to the view espoused by their traditional IT operations clientele: AWS was too dangerous, it didn’t have sufficient infrastructure availability, it didn’t perform sufficiently well or with sufficient consistency, it didn’t have enough security, it didn’t have enough manageability, it didn’t have enough governance, it wasn’t based on VMware — and it didn’t look very much like an enterprise’s data center architecture. The viewpoint was that IT operations would continue to control purchases, implementations would be relatively small-scale and would be built on traditional enterprise technologies, and that AWS would never get to the point that they’d satisfy traditional IT operations folks.
    What they didn’t count on was the fact that developers, and the business management that they ultimately serve, were going to forge on ahead without them. Or that AWS would steadily improve its service and the way it did business, in order to meet the needs of the traditional enterprise. (My colleagues in GTP — the Gartner division that was Burton Group — do a yearly evaluation of AWS’s suitability for the enterprise, and each year, AWS gets steadily, materially better. Clients: see the latest.)
    Today, AWS’s sheer market share speaks for itself. And it is definitely not just single developers with a VM or two, start-ups, or non-mission-critical stuff. Through the incredible amount of inquiry we take at Gartner, we know how cloud IaaS buyers think, source, succeed, and sometimes suffer. And every day at Gartner, we talk to multiple AWS customers (or prospects considering their options, though many have already bought something on the click-through agreement). Most are traditional enterprises of the G2000 variety (including some of the largest companies in the world), but over the last year, AWS has finally cracked the mid-market by working with systems integrator partners. The projected spend levels are clearly increasing dramatically, the use cases are extremely broad, the workloads increasingly have sensitive data and regulatory compliance concerns, and customers are increasingly thinking of AWS as a strategic vendor.
    (Now, as my colleagues who cover the traditional data center like to point out, the spend levels are still trivial compared to what these customers are spending on the rest of their data center IT, but I think what’s critical here is the shift in thinking about where they’ll put their money in the future, and their desire to pick a strategic vendor despite how relatively early-stage the market is.)
    But put another way — it is not just that AWS advanced its offering, but it convinced the market that this is what they wanted to buy (or at least that it was a better option than the other offerings), despite the sometimes strange offering constructs. They essentially created demand in a new type of buyer — and they effectively defined the category. And because they’re almost always first to market with a feature — or the first to make the market broadly aware of that capability — they force nearly all of their competitors into playing catch-up and me-too.
    That doesn’t mean that the IT operations buyer isn’t important, or that there aren’t an array of needs that AWS does not address well. But the vast majority of the dollars spent on cloud IaaS are much more heavily influenced by developer desires than by IT operations concerns — and that means that market share currently favors the providers who appeal to development organizations. That’s an ongoing secular trend — business leaders are currently heavily growth-focused, and therefore demanding lots of applications delivered as quickly as possible, and are willing to spend money and take greater risks in order to obtain greater agility.
    This also doesn’t mean that the non-developer-centric service providers aren’t important. Most of them have woken up to the new sourcing pattern, and are trying to respond. But many of them are also older, established organizations, and they can only move so quickly. They also have the comfort of their existing revenue streams, which allow them the luxury of not needing to move so quickly. Many have been able to treat cloud IaaS as an extension of their managed services business. But they’re now facing the threat of systems integrators like Cognizant and Capgemini entering this space, combining application development and application management with managed services on a strategic cloud IaaS provider’s platform — at the moment, normally AWS. Nothing is safe from the broader market shift towards cloud computing.
    As always, every individual customer’s situation is different from another’s, and the right thing to do (or the safe, mainstream thing to do) evolves through the years. Gartner is appropriately cautionary when it discusses such things with clients. This is a good time to mention that Magic Quadrant placement is NEVER a good reason to include or exclude a vendor from a short list. You need to choose the vendor that’s right for your use case, and that might be a Niche Player, or even a vendor that’s not on the MQ at all — and even though AWS has the highest overallplacement, they might be completely unsuited to your use case.

    Where are the challengers to AWS? [by Lydia Leong on Gartner blog, Sept 4, 2013]

    This is part of 2 of my response to Bernard Golden’s recent CIO.com blog post in response to my announcement of Gartner’s 2013 Magic Quadrant for Cloud IaaS. (Part 1 was posted yesterday.)

    Bernard: “What skill or insight has allowed AWS to create an offering so superior to others in the market?”

    AWS takes a comprehensive view of “what does the customer need”, looks at what customers (whether current customers or future target customers) are struggling with, and tries to address those things. AWS not only takes customer feedback seriously, but it also iterates at shocking speed. And it has been willing to invest massively in engineering. AWS’s engineering organization and the structure of the services themselves allows multiple, parallel teams to work on different aspects of AWS with minimal dependencies on the other teams. AWS had a head start, and with every passing year their engineering lead has grown larger. (Even though they have a significant burden of technical debt from having been first, they’ve also solved problems that competitors haven’t had to yet, due to their sheer scale.)

    Many competitors haven’t had the willingness to invest the resources to compete, especially if they think of this business as one that’s primarily about getting a VM fast and that’s all. They’ve failed to understand that this is a software business, where feature velocity matters. You can sometimes manage to put together brilliant, hyper-productive small teams, but this is usually going to get you something that’s wonderful in the scope of what they’ve been able to build, but simply missing the additional capabilities that better-resourced competitors can manage (especially if a competitor can muster both resources and hyper-productivity). There are some awesome smaller companies in this space, though.

    Bernard: “Plainly stated, why hasn’t a credible competitor emerged to challenge AWS?”

    I think there’s a critical shift happening in the market right now. Three very dangerous competitors are just now entering the marketMicrosoft, Google, and VMware. I think the real war for market share is just beginning.

    For instance, consider the following, off the cuff, thoughts on those vendors. These are by no means anything more than quick thoughts and not a complete or balanced analysis. I have a forthcoming research note called “Rise of the Cloud IaaS Mega-Vendors” that focuses on this shift in the competitive landscape, and which will profile these four vendors in particular, so stay tuned for more. So, that said:

    Microsoft has brand, deep customer relationships, deep technology entrenchment, and a useful story about how all of those pieces are going to fit together, along with a huge army of engineers, and a ton of money and the willingness to spend wherever it gains them a competitive advantage; its weakness is Microsoft’s broader issues as well as the Microsoft-centricity of its story (which is also its strength, of course). Microsoft is likely to expand the market, attracting new customers and use cases to IaaS — including blended PaaS models.

    Google has brand, an outstanding engineering team, and unrivaled expertise at operating at scale; its weakness is Google’s usual challenges with traditional businesses (whatever you can say about AWS’s historical struggle with the enterprise, you can say about Google many times over, and it will probably take them at least as long as AWS did to work through that). Google’s share gain will mostly come at the expense of AWS’s base of HPC customers and young start-ups, but it will worm its way into the enterprise via interactive agencies that use its cloud platform; it should have a strong blended PaaS model.

    VMware has brand, a strong relationship with IT operations folks, technology it can build on, and a hybrid cloud story to tell; whether or not its enterprise-class technology can scale to global-class clouds remains to be seen, though, along with whether or not it can get its traditional customer base to drive sufficient volume of cloud IaaS. It might expand the market, but it’s likely that much of its share gain will come at the expense of VMware-based “enterprise-class” service providers.

    Obviously, it will take these providers some time to build share, and there are other market players who will be involved, including the other providers that are in the market today (and for all of you wondering “what about OpenStack”, I would classify that under the fates of the individual providers who use it). However, if I were to place my bets, it would be on those four at the top of market share, five years from now. They know that this is a software business. They know that innovative capabilities are vitally necessary. And they know that this has turned into a market fixated on developer productivity and business benefits. At least for now, that view is dominating the actual spending in this market.

    You can certainly argue that another market outcome should have happened, that users shouldhave chosen differently, or even that users are making poor decisions now that they’ll regret later. That’s an interesting intellectual debate, but at this point, Sisyphus’s rock is rolling rapidly downhill, so anyone who wants to push it back up is going to have an awfully difficult time not getting crushed.

    Verizon Cloud is technically innovative, but is it enough? [by Lydia Leong on Gartner blog, Oct 4, 2013]

    Verizon Terremark has announced the launch of its new Verizon Cloud service built using its own technology stack.

    Verizon already owns a cloud IaaS offering — in fact, it owns several. Terremark was an early AWS competitor with the Terremark Enterprise Cloud, a VMware-based offering that got strong enterprise traction during the early years of this market (and remains the second-most-common cloud provider amongst Gartner’s clients, with many companies using both AWS and Terremark), as well as a vCloud Express offering. Verizon entered the game later with Verizon Compute as a Service (now called Enterprise Cloud Managed Edition), also VMware-based. Since Verizon’s acquisition of Terremark, the company has continued to operate all the existing platforms, and intends to continue to do so for some time to come.

    However, Verizon has had the ambition to be a bigger player in cloud; like many other carriers, it believes that network services are a commodity and a carrier needs to have stickier, value-added, higher-up-the-stack services in order to succeed in the future. However, Verizon also understood that it would have to build technology, not depend on other people’s technology, if it wanted to be a truly competitive global-class cloud player versus Amazon (and Microsoft, Google, etc.).

    With that in mind, in 2011, Verizon went and made a manquisitionacquiring CloudSwitch not so much for its product (essentially hypervisor-within-a-hypervisor that allows workloads to be ported across cloud infrastructures using different technologies), as for its team. It gave them a directive to go build a cloud infrastructure platform with a global-class architecture that could run enterprise-class workloads, at global-class scale and at fully competitive price points.

    Back in 2011, I conceived what I called the on-demand infrastructure fabric (see my blog post No World of Two Clouds, or, for Gartner clients, the research note, Market Trends: Public and Private Cloud Infrastructure Converge into On-Demand Infrastructure Fabrics) — essentially, a global-class infrastructure fabric with self-service selectable levels of availability, performance, and isolation. Verizon is the first company to have really built what I envisioned (though their project predates my note, and my vision was developed independently of any knowledge of what they were doing).

    The Verizon Cloud architecture is actually very interesting, and, as far as I know, unique amongst cloud IaaS providers. It is almost purely a software-defined data center. Components are designed at a very low level — a custom hypervisor, SDN augmented with the use of NPUs, virtualized distributed storage. Verizon has generally tried to avoid using components for which they do not have source code. There are very few hardware components — there’s x86 servers, Arista switches, and commodity Flash storage (the platform is all-SSD). The network is flat, and high bandwidth is an expectation (Verizon is a carrier, after all). Oh, and there’s object-based storage, too (which I won’t discuss here).

    The Verizon Cloud has a geographically distributed control plane designed for continuous availability, and it, along with the components, are supposed to be updatable without downtime (i.e., maintenance should not impact anything). It’s intended to provide fine-grained performance controls for the compute, network, and storage resource elements. It is also built to allow the user to select fault domains, allowing strong control of resource placement (such as “these two VMs cannot sit on the same compute hardware”); within a fault domain, workloads can be rebalanced in case of hardware failure, thus offering the kind of high availability that’s often touted in VMware-based clouds (including Terremark’s previous offerings). It is also intended to allow dynamic isolation of compute, storage, and networking components, allowing the creation of private clouds within a shared pool of hardware capacity.

    The Verizon Cloud is intended to be as neutral as possible — the theory is that all VM hypervisors can run natively on Verizon’s hypervisor, many APIs can be supported (including its own API, the existing Terremark API, and the AWS, CloudStack, and OpenStack APIs), and there’ll be support for the various VM image formats. Initially, the supported hypervisor is a modified Xen. In other words, Verizon wants to take your workloads, wherever you’re running them now, and in whatever form you can export them.

    It’s an enormously ambitious undertaking. It is, assuming it all works as promised, a technical triumph — it’s the kind of engineering you expect out of an organization like AWS or Google, or a software company like Microsoft or VMware, not a staid, slow-moving carrier (the mere fact that Verizon managed to launch this is a minor miracle unto itself). It is actually, in a way, what OpenStack might have aspired to be; the delta between this and the OpenStack architecture is, to me, full of sad might-have-beens of what OpenStack had the potential to be, but is not and is unlikely to become. (Then again, service providers have the advantage of engineering to a precisely-controlled environment. OpenStack, and for that matter, VMware, need to run on whatever junk the customer decides to use, instantly making the problem more complex.)

    Unfortunately, the question at this stage is: Will anybody care?

    Yes, I think this is an important development in the market, and the fact that Verizon is already a credible cloud player in the enterprise, with an entrenched base in the Terremark Enterprise Cloud, will help it. But in a world where developers control most IaaS purchasing, the bare-bones nature of the new Verizon offering means that it falls short of fulfilling the developer desire for greater productivity. In order to find a broader audience, Verizon will need to commit to developing all the richness of value-added capabilities that the market leaders will need — which likely means going after the PaaS market with the same degree of ambition, innovation, and investment, but certainly means committing to rapidly introducing complementing capabilities and bringing a rich ecosystem in the form of a software marketplace and other partnerships. Verizon needs to take advantage of its shiny new IaaS building blocks to rapidly introduce additional capabilities — much like Microsoft is now rapidly introducing new capabilities into Azure.

    With that, assuming that this platform performs as designed, and Verizon can continue to treat Terremark’s cloud folks like they belong to a fast-moving start-up and not an ossified pipe provider, Verizon may have a shot at being one of the leaders in this market. Without that, the Verizon Cloud is likely to be relegated to a niche, just like every other provider whose capabilities stop at the level of offering infrastructure resources.


    From: Amazon.com Announces Third Quarter Sales up 24% to $17.09 Billion [press release, Oct 24, 2013]

    • Amazon Web Services (AWS) introduced more than 15 new features and enhancements to its fully managed relational and NoSQL database services. Amazon Relational Database Service (RDS) now supports Oracle Statspack performance diagnostics and has expanded MySQL support, including capabilities for zero downtime data migration. Enhancements to Amazon DynamoDB include new cross-region support, a local test tool, and location-based query capabilities.
    • AWS continued to bolster its management services, making it easier to provision and manage more AWS resources with AWS CloudFormation and AWS OpsWorks, which both added support for Amazon Virtual Private Cloud (VPC). AWS also enhanced the AWS Console mobile app and introduced a new Command Line Interface.
    • AWS continued to gain momentum in the public sector and now has more than 2,400 education institutions and 600 government agencies as customers, including recent new projects with customers such as the U.S. Federal Drug Administration.

    THE JULY PRICE CUT

    From Amazon.com Announces Second Quarter Sales up 22% to $15.70 Billion [press release, July 25, 2013]

    • AWS announced it had lowered prices by up to 80% on Amazon EC2 Dedicated Instances, instances that run on single-tenant hardware dedicated to a single customer account. In addition, AWS lowered prices on Amazon RDS instances with On-Demand price reductions of up to 28% and Reserved Instance (RI) price reductions of up to 27%.
    • Amazon Web Services (AWS) became the first major cloud provider to achieve FedRAMP Compliance which recognizes the ability of AWS to meet extensive security requirements and compliance mandates for running sensitive US government applications and protecting data. FedRAMP certification simplifies and speeds the ability for government agencies to evaluate and adopt AWS for a wide range of applications and workloads.
    • AWS announced the launch of the AWS Certification Program, which recognizes IT professionals that possess the skills and technical knowledge necessary for building and maintaining applications and services on the AWS Cloud. AWS Certifications help organizations identify candidates and consultants who are proficient at architecting and developing for the cloud.
    • AWS further enhanced its security and identity management capabilities across several services – introducing resource-level permissions for Amazon Elastic Compute Cloud (EC2) and Amazon Relational Database Service (RDS), adding identity federation to AWS Identity and Access Management (IAM), extending Amazon Simple Storage Service (S3) Server Side Encryption support to Amazon Elastic Map Reduce (EMR), and adding custom SSL certificate support for CloudFront. These enhancements give customers more granular security controls over their AWS deployments, applications and sensitive data.

    Some directly related and general/major previous press releases from that overall list:

    Android to overtake the overall PC market?

    I came to this after the recent posts of mine (between July 20 and August 17, 2013):

    as well as after the accumulated contents of my separated website on the whole issue of ‘USD99 Allwinner’ devoted to a multifaceted disruption to not only the traditional PC market but even to the current tablet market as the analyst companies are viewing that.

    Those analyst companies are already hinting indirectly to the possibility of Android (sooner or later) overtaking the overall PC market via the following headlines which I derived from their recent press release contents:

    • IDC: ‘Tablets will surpass portable PC volumes already this year’
    • Gartner: ‘Traditional PC shipments to decline as tablets are becoming the primary consumption device’
    • Digitimes Research: ‘Overtaking iPad will happen in 2H13’
    • Canalys says ‘Yes’
    • EnfoDesk (Analysys International) from China says ‘For sure, as it is already happening against the iPad in China even at a nascent stage of the local tablet market’

    You can read those release in the detailed sections given below.

    Before that first note: Everything is rooted in the established fact that: TrendForce: iPad Marked Historically Low Market Share 35% of Global Q2 Tablet Shipment [press release, July 25, 2013] (although the exact number differs between the different market research organisations, as you will see in the detailed sections below)

    image

    According to the survey by WitsView, the display research division of the global market intelligence provider TrendForce, the global shipment of the 7” tablets with WSVGA resolution and above attained 41.1 million units, dropping 12.4% from the previous quarter. The seasonal factor, the generation shuffles for some mainstream products, and the inventory adjustments amid the weakening sales were all key reasons for declining shipments.

    WitsView’s research director Eric Chiou says that Apple, as one single brand that controls the most volumetric tablet shipment, saw its 9.7” iPad entering the end of life cycle in Q2, and iPad mini’s relatively selling prices caused slow sales and the impacts from the inventory adjustments, leading to a dropping shipment of 14.6 million units compared with 19.5 million units in Q1. On top of the quarterly drop as high as 25%, its market share has dropped to 35.5%, the new historical low.

    Samsung’s ambition of boosting the tablet shipment was also shown on the Q2 shipment. Despite its slightly decreased shipment of 8.8 million units from the previous quarter, the Korean maker’s market share, supported by the newly launched 8” model, grew from 20.2% to 21.5%, still a remarkable result. As for the two leading PC brands, Asus and Acer, their business cores both were placed on the under-$130 7” products, and the price-cutting strategy helped them become the two of a few brands counter to the declining trend, seeing excellent QoQ growth of 60% and 36%, respectively.

    “The two long-term winners of the entry-level tablet segment, Amazon and Google, showed unideal shipment results, holding shipment volumes of only 1.1 million and 0.9 million units, respectively,” Chiou indicates. Amazon’s 2013 new models are all concentrated after September and the brand is in an empty-product period, while Google’s fighter model Nexus 7 had the 1st generation approach the end of life cycle in Q2 and saw a significantly dropping shipment. The single-quarter shipment will bounce back to more than 2 million units in Q3 as the 2nd generation product is projected to ship smoothly.

    The white-box tablet couldn’t avoid the decline in Q2. The price increases and the short supply for the key component RAM led to double strikes of cost increase and insufficient supply to white-box tablets that had smaller production scales, in addition to brands’ strongly promoted entry-level tablets that squeezed their room for survival. Under both the internal and external impacts, the white-box tablet saw a shipment volume of only 9.7 million units, declining 7% QoQ

    Based on WitsView’s analysis, on top of Amazon’s yearly new 7” model and the 2nd generation of Nexus 7, several highly-anticipated models will be revealed in Q3, including Apple’s heavyweight Generation 5 iPad and the new Android 10.1” tablet intensively designed by PC brands. With the stimulation of improved spec and tempting prices, the Q3 shipment is projected to reach an amount of 49.6 million units, challenging a QoQ growth of 21%. The tablet shipment for the entire 2013 is estimated at 196.5 million units, including 153.2 million units of brand tablets and 43.3 million units of white-box tablets.

    The second well established fact affecting the future is that Surface RT was a huge market failure first recognized indirectly via the FORM 10-K submission of the Microsoft on July 18, 2013.

    … The general availability of Surface RT and Windows 8 started on October 26, 2012. The general availability of Surface Pro started on February 9, 2013. …

    ITEM 6. SELECTED FINANCIAL DATA

    includes a charge for Surface RT inventory adjustments recorded in the fourth quarter of fiscal year 2013, which decreased operating income by $900 million, net income by $596 million, and diluted earnings per share by $0.07. …

    RESULTS OF OPERATIONS

    • Cost of revenue increased $2.7 billion or 16%, reflecting increased product costs associated with Surface and Windows 8, including an approximately $900 million charge for Surface RT inventory adjustments, higher headcount-related expenses, payments made to Nokia related to joint strategic initiatives, royalties on Xbox LIVE content, and retail stores expenses, offset in part by decreased costs associated with lower sales of Xbox 360 consoles and decreased traffic acquisition costs.
    • Sales and marketing expenses increased $1.4 billion or 10%, reflecting advertising of Windows 8 and Surface.

    Windows Division

    Fiscal year 2013 compared with fiscal year 2012

    Windows Division revenue increased $839 million. Surface revenue was $853 million. …

    Cost of revenue increased $1.8 billion, reflecting a $1.6 billion increase in product costs associated with Surface and Windows 8, including a charge for Surface RT inventory adjustments of approximately $900 million. Sales and marketing expenses increased $1.0 billion or 34%, reflecting an $898 million increase in advertising costs associated primarily with Windows 8 and Surface.

    The possibility of such failure was already recognized in my other posts:


    IDC: ‘Tablets will surpass portable PC volumes already this year’

    IDC Forecasts Worldwide Tablet Shipments to Surpass Portable PC Shipments in 2013, Total PC Shipments in 2015 [press release, May 28, 2013]

    image

    According to a new forecast from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker, tablet shipments are expected to grow 58.7% year over year in 2013 reaching 229.3 million units, up from 144.5 million units last year. IDC now predicts tablet shipments will exceed those of portable PCs this year, as the slumping PC market is expected to see negative growth for the second consecutive year. In addition, IDC expects tablet shipments to outpace the entire PC market (portables and desktops combined) by 2015. (A press release summarizing IDC’s latest PC market forecast can be found here.)

    “What started as a sign of tough economic times has quickly shifted to a change in the global computing paradigm with mobile being the primary benefactor,” said Ryan Reith, Program Manager for IDC’s Mobility Trackers. “Tablets surpassing portables in 2013, and total PCs in 2015, marks a significant change in consumer attitudes about compute devices and the applications and ecosystems that power them. IDC continues to believe that PCs will have an important role in this new era of computing, especially among business users. But for many consumers, a tablet is a simple and elegant solution for core use cases that were previously addressed by the PC.”

    While Apple has been at the forefront of the tablet revolution, the current market expansion has been increasingly fueled by low-cost Android devices. In 2013, the worldwide average selling price (ASP) for tablets is expected to decline -10.8% to $381. In comparison, the ASP of a PC in 2013 is nearly double that at $635. IDC expects tablet prices to decline further, which will allow vendors to deliver a viable computing experience into the hands of many more people at price points the PC industry has strived to meet for years.

    “Apple’s success in the education market has proven that tablets can be used as more than just a content consumption or gaming device,” said Jitesh Ubrani, Research Analyst for the Worldwide Quarterly Tablet Tracker. “These devices are learning companions, and as tablet prices continue to drop, the dream of having a PC for every child gets replaced with the reality that we can actually provide a tablet for every child.”

    In addition to lower prices, another major shift in the tablet market has occurred around screen sizes. Apple’s first generation iPad, which included a 9.7-inch display, was perceived by many as the sweet spot for tablets. That is, until 7-inch Android-based tablets began to gain traction in the market. Apple responded with the iPad mini in the fourth quarter of 2012, and in the space of two quarters the sub-8-inch category exploded to overtake the larger-sized segment in terms of total shipments.

    Worldwide Tablet Market Share by Screen Size Band, 2011 – 2017

    Screen Size

    2011

    2013

    2017

    < 8″

    27%

    55%

    57%

    8″ – 11″

    73%

    43%

    37%

    11″+

    0%

    2%

    6%

    Total

    100%

    100%

    100%

    Source: IDC Worldwide Tablet Tracker, May 28, 2013.

    * Forecast Data

    Table Notes:

    • Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
    • IDC considers all LCD-based slate devices with screens between 7 and 16 inches as tablets, regardless of whether or not they include a removable keyboard (such as the Surface RT). Convertible devices with non-removable keyboards (such as Lenovo’s Yoga) are not counted as Tablets.

    Tablet Shipments Slow in the Second Quarter As Vendors Look To Capitalize on a Strong Second Half of 2013, According to IDC [press release, Aug 5, 2013]

    image

    As expected, worldwide tablet shipment growth slowed in the second quarter of 2013 (2Q13), according to preliminary data from the International Data Corporation (IDC)Worldwide Quarterly Tablet Tracker. Worldwide tablet shipments finally experienced a sequential decline as total volumes fell -9.7% from 1Q13. However, the 45.1 million units shipped in the second quarter was up 59.6% from the same quarter in 2012, when tablet vendors shipped 28.3 million devices.

    Lacking a new product launch in March to help spur shipments, Apple’s iPad saw a lower-than-predicted shipment total of 14.6 million units for the quarter, down from 19.5 million in 1Q13. In years past, Apple has launched a new tablet heading into the second quarter, which resulted in strong quarter-over-quarter growth. Now, Apple is expected to launch new tablet products in the second half of the year, a move that better positions it to compete during the holiday season. Meanwhile, the other two vendors in the top 3 also saw a decline in their unit shipments during the quarter. Second-place Samsung shipped 8.1 million units, down from 8.6 million in the first quarter of 2013, although up significantly from the 2.1 million units shipped in 2Q12. And third-place ASUS shipped a total of 2.0 million units in 2Q13, down from 2.6 million in 1Q13.

    “A new iPad launch always piques consumer interest in the tablet category and traditionally that has helped both Apple and its competitors,” said Tom Mainelli, Research Director, Tablets at IDC. “With no new iPads, the market slowed for many vendors, and that’s likely to continue into the third quarter. However, by the fourth quarter we expect new products from Apple, Amazon, and others to drive impressive growth in the market.”

    Not all vendors experienced a slowdown during the quarter. PC stalwarts Lenovo and Acer both re-entered the top five this quarter. Lenovo continued to make headway into the world of mobility and for the first time had shipments surpass the million unit mark in a quarter, shipping a total of 1.5 million devices. This was up 313.9% from a year ago and enough to capture 3.3% market share. Rounding out the top 5 was Acer, which shipped 1.4 million tablets in 2Q13 for 247.9% year-over-year growth and an increase of 35.4% over the first quarter of 2013.

    “The tablet market is still evolving and vendors can rise and fall quickly as a result,” said Ryan Reith, Program Manager for IDC’s Mobility Tracker programs. “Apple aside, the remaining vendors are still very much figuring out which platform strategy will be successful over the long run. To date, Android has been far more successful than the Windows 8 platform. However, Microsoft-fueled products are starting to make notable progress into the market.”

    Top Five Tablet Vendors, Shipments, and Market Share, Second Quarter 2013 (Shipments in millions)

    Vendor
    2Q13 Unit Ship-ments
    2Q13 Market Share
    2Q12 Unit Ship-ments
    2Q12 Market Share
    Year-over-Year Growth
    1. Apple
    14.6
    32.4%
    17.0
    60.3%
    -14.1%
    2.Samsung
    8.1
    18.0%
    2.1
    7.6%
    277.0%
    3. ASUS
    2.0
    4.5%
    0.9
    3.3%
    120.3%
    4. Lenovo
    1.5
    3.3%
    0.4
    1.3%
    313.9%
    5. Acer
    1.4
    3.1%
    0.4
    1.4%
    247.9%
    Others
    17.5
    38.8%
    7.4
    26.2%
    136.6%
    Total
    45.1
    100.0%
    28.3
    100.0%
    59.6%

    Source: IDC Worldwide Tablet Tracker, August 5, 2013.

    See additional Table Notes following the last table.

    Top Tablet Operating Systems, Shipments, and Market Share, Second Quarter 2013 (Shipments in Millions)

    Vendor
    2Q13 Unit Ship-ments
    2Q13 Market Share
    2Q12 Unit Ship-ments
    2Q12 Market Share
    Year-over-Year Growth
    1. Android
    28.2
    62.6%
    10.7
    38.0%
    162.9%
    2. iOS
    14.6
    32.5%
    17.0
    60.3%
    -14.1%
    3.Windows
    1.8
    4.0%
    0.3
    1.0%
    527.0%
    4. Windows RT
    0.2
    0.5%
    N/A
    N/A
    N/A
    5.BlackBerry OS
    0.1
    0.3%
    0.2
    0.7%
    -32.8%
    Others
    0.1
    0.2%
    N/A
    N/A
    N/A
    Total
    45.1
    100.0%
    28.3
    100.0%
    59.6%

    Source: IDC Worldwide Tablet Tracker, August 5, 2013

    Table Notes:

    • All data are preliminary and subject to change. Vendor shipments are branded shipments and exclude OEM sales for all vendors.
    • Some IDC estimates prior to financial earnings reports.
    • Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
    • IDC considers all LCD-based slate devices with screens between 7 and 16 inches as tablets, regardless of whether or not they include a removable keyboard (such as the Surface RT). Convertible devices with non-removable keyboards (such as Lenovo’s Yoga) are not counted as Tablets.


    Gartner: ‘Traditional PC shipments to decline as tablets are becoming the primary consumption device’

    Gartner Says Worldwide PC, Tablet and Mobile Phone Shipments to Grow 5.9 Percent in 2013 as Anytime-Anywhere-Computing Drives Buyer Behavior [press release, June 24, 2013]

    Traditional PC Shipments to Decline 10.6 Percent in 2013, While Tablet Shipments Increase 67.9 Percent

    Worldwide devices (the combined shipments of PCs, tablets and mobile phones) are projected to reach 2.35 billion units in 2013, a 5.9 percent increase from 2012, according to Gartner, Inc. The market is being driven by sales in tablets, smartphones, and to a lesser extent, ultramobiles, as PC shipments are on the decline.

    Worldwide traditional PC (desk-based and notebook) shipments are forecast to total 305 million units in 2013, a 10.6 percent decline from 2012 , while the PC market including ultramobiles is forecast to decline 7.3 percent in 2013 (see Table 1). Tablet shipments are expected to grow 67.9 percent, with shipments reaching 202 million units, while the mobile phone market will grow 4.3 percent, with volume of more than 1.8 billion units. The sharp decline in PC sales recorded in the first quarter was the result in a change in preferences in consumers’ wants and needs, but also an adjustment in the channel to make room for new products hitting the market in the second half of 2013.

    “Consumers want anytime-anywhere computing that allows them to consume and create content with ease, but also share and access that content from a different portfolio of products. Mobility is paramount in both mature and emerging markets,” said Carolina Milanesi, research vice president at Gartner.

    Table 1
    Worldwide Devices Shipments by Segment (Thousands of Units)

    Device Type

    2012

    2013

    2014

    PC (Desk-Based and Notebook)

    341,273

    305,178

    289,239

    Ultramobile

    9,787

    20,301

    39,824

    Tablet

    120,203

    201,825

    276,178

    Mobile Phone

    1,746,177

    1,821,193

    1901,188

    Total

    2,217,440

    2,348,497

    2,506,429

    Source: Gartner (June 2013)

    Demand for ultramobiles (which includes Chromebooks, thin and light clamshell designs, and slate and hybrid devices running Windows 8) will come from upgrades of both notebooks and premium tablets, such as the Apple iPad or Galaxy Tab10.1. Analysts said ultramobile devices are gaining in attractiveness and drawing demand away from other devices. This will be even more evident in the fourth quarter of 2013 when the combination of new design based on Intel processors Bay Trail and Haswell running on Windows 8.1 will hit the market. Although these devices will only marginally help overall sales volumes initially, they are expected to help vendors increase average selling prices (ASPs) and margins.

    The tablet and smartphone markets are facing some challenges as these devices gain longer life cycles. There has also been a shift as many consumers go from premium tablets to basic tablets. The share of basic tablets is expected to increase faster than anticipated, as sales of the iPad Mini already represented 60 percent of overall iOS tablet sales in the first quarter of 2013.

    “The increased availability of lower priced basic tablets, plus the value add shifting to software rather than hardware will result in the lifetimes of premium tablets extending as they remain active in the household for longer. We will also see consumer preferences split between basic tablets and ultramobile devices,” said Ranjit Atwal, research director at Gartner. “With mobile phones, volume expectations for 2013 have been brought down as the life cycles lengthen as consumers wait for new models and lower prices to hit the market in the Fall and holiday season. The challenge in the smartphone market is also that, as penetration moves more and more to the mass market, price points are lowering and in most cases so do margins.”

    “Although the numbers seem to paint a clear picture of who the winner will be when it comes to operating systems (OS) in the device market (see Table 2), the reality is that today ecosystem owners are challenged in having the same relevance in all segments,” said Ms. Milanesi. “Apple is currently the more homogeneous presence across all device segments, while 90 percent of Android sales are currently in the mobile phone market and 85 percent of Microsoft sales are in the PC market.”

    Table 2
    Worldwide Devices Shipments by Operating System (Thousands of Units)

    Operating System

    2012

    2013

    2014

    Android

    505,509

    866,781

    1,061,270

    Windows

    346,464

    339,545

    378,142

    iOS/MacOS

    212,878

    296,356

    354,849

    RIM

    34,584

    25,224

    22,291

    Others

    1,118,004

    820,592

    689,877

    Total

    2,217,440

    2,348,497

    2,506,429

    Source: Gartner (June 2013)

    Additionally, with enterprises’ growing acceptance of bring your own device (BYOD), there is an increase in consumer-owned devices in the computing world. Gartner forecasts that computing devices bought by consumers will grow from 65 percent in 2013 to 72 percent in 2017. This signifies the growing importance of designing for the consumer inside the enterprise.

    Gartner’s detailed market forecast data is available in the report, “Forecast: Devices by Operating System and User Type, Worldwide, 2010-2017, 2Q13 Update.” The report is on Gartner’s website athttp://www.gartner.com/resId=2524916.

    Gartner Says Worldwide PC Shipments in the Second Quarter of 2013 Declined 10.9 Percent [press release, July 10, 2013]

    PC Industry Continues to Shrink as the Installed Base Restructures to Accommodate Tablets as the Primary Consumption Device

    Worldwide PC shipments dropped to 76 million units in the second quarter of 2013, a 10.9 percent decrease from the same period last year, according to preliminary results by Gartner, Inc. This marks the fifth consecutive quarter of declining shipments, which is the longest duration of decline in the PC market’s history.

    All regions showed a decline compared to a year ago. The fall in the Asia/Pacific PC market continued, showing five consecutive quarters of the shipment decline, while the EMEA PC market registered two consecutive quarters of double-digit decline.

    “We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption in mature and developed markets,” said Mikako Kitagawa, principal analyst at Gartner. “In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market.”

    HP and Lenovo’s neck-and-neck competition continued. This time, Lenovo was back in the top position by only a small difference in share (see Table 1). Lenovo showed mixed regional results, as it experienced strong growth in the Americas and EMEA, while showing a major decline in Asia/Pacific. Weakness in China was most likely the contributor of Lenovo’s shipment decline in the region as the majority of Lenovo’s volume came from China.

    While HP was slightly behind Lenovo, HP is a market leader in key regions including the U.S., EMEA and Latin America. Asia/Pacific has been a weakness the last three years for HP, but preliminary second quarter results suggest an improvement of their performance in the region.

    Table 1
    Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q13 (Units)

    Company
    2Q13 Ship-ments
    2Q13 Market Share (%)
    2Q12 Ship-ments
    2Q12 Market Share (%)
    2Q12-2Q13 Growth (%)
    Lenovo
    12,677,265
    16.7
    12,755,068
    14.9
    -0.6
    HP
    12,402,887
    16.3
    13,028,822
    15.3
    -4.8
    Dell
    8,984,634
    11.8
    9,349,171
    11.0
    -3.9
    Acer Group
    6,305,000
    8.3
    9,743,663
    11.4
    -35.3
    ASUS
    4,590,071
    6.0
    5,772,043
    6.8
    -20.5
    Others
    31,041,130
    40.8
    34,675,824
    40.6
    -10.5
    Total
    76,000,986
    100.0
    85,324,591
    100.0
    -10.9

    Note: Data includes desk-based PCs and mobile PCs, including mini-notebooks but not media tablets such as the iPad.

    Source: Gartner (July 2013)

    Dell’s shipments declined compared to a year ago, but its 2Q13 results showed a smaller decline than the past several quarters. Dell showed good growth in the U.S. and Japan, but struggled to increase shipments in Asia/Pacific and EMEA. Both Acer and ASUS showed steep declines compared to the second quarter last year. The decline was partly affected by their strategies to exit the mini-notebook market.

    “While Windows 8 has been blamed by some as the reason for the PC market’s decline, we believe this is unfounded as it does not explain the sustained decline in PC shipments, nor does it explain Apple’s market performance,” Ms. Kitagawa said.

    In the U.S. market, PC shipments totaled 15 million units in the second quarter of 2013, a 1.4 percent decline from the second quarter of 2012 (see Table 2). This decline was less than the past seven quarters, and the market grew 8.5 percent sequentially.

    “Our preliminary results indicate that this reduced market decline was attributed to solid growth in the professional market,” Ms. Kitagawa said. “Three of the major professional PC suppliers, HP, Dell and Lenovo, all registered better than U.S. average growth rate. The end of Windows XP support potentially drove the remaining PC refresh in the U.S. professional market.” 

    Table 2
    Preliminary U.S. PC Vendor Unit Shipment Estimates for 2Q13 (Units)

    Company
    2Q13 Ship-ments
    2Q13 Market Share (%)
    2Q12 Ship-ments
    2Q12 Market Share (%)
    2Q12-2Q13 Growth (%)
    HP
    3,957,761
    26.4
    3,976,041
    26.2
    -0.5
    Dell
    3,681,725
    24.6
    3,458,736
    22.8
    6.4
    Apple
    1,740,500
    11.6
    1,818,959
    12.0
    -4.3
    Lenovo
    1,515,562
    10.1
    1,266,109
    8.3
    19.7
    Toshiba
    848,984
    5.7
    1,006,900
    6.6
    -15.7
    Others
    3,230,717
    21.6
    3,659,220
    24.1
    -11.7
    Total
    14,975,249
    100.0
    15,185,965
    100.0
    -1.4

    Note: Data includes desk-based PCs and mobile PCs, including mini-notebooks but not media tablets such as the iPad.

    Source: Gartner (July 2013)

    PC shipments in Europe, Middle East and Africa (EMEA) were weakened in the second quarter of 2013, with a 16.8 per cent decline over the same period last year, marking the fifth consecutive quarter of decreasing shipments.

    “The sharp decline in the second quarter of 2013 was partly due to the shift in usage patterns away from notebooks to tablets, and partly because the PC market was exposed to inventory reductions in the channel due to the start of the transition to new Haswell-based products,” said Isabelle Durand, principal research analyst at Gartner. “Touch-based notebooks still account for less than 10 per cent of the total consumer notebook shipments in the last quarter.”

    “Shipment levels remained weak in Western Europe in the second quarter of 2013 as PC replacement rates continued to be extremely low, while the challenging economic environment is muting spending in consumer markets,” said Ms Durand. “Shipments in Eastern Europe also remained low as this is typically a quiet quarter for business buyers in the region, and consumers are predominantly looking for Android-based tablets. In the Middle East and Africa, tablet and smartphone adoption also continued to draw demand away from PCs in the second quarter of 2013.”

    Despite the steep shipment decline, HP retained the top position in EMEA due to better results in the professional PC market. Lenovo was the only top five vendor to exhibit shipment growth, recording a fourth consecutive quarter of growth and taking second place in the EMEA PC vendor rankings in the second quarter of 2013.

    Acer exhibited the worst performance of the second quarter with a shipment decline of 38.5 percent year-on-year. Most of Acer’s decline resulted from its portfolio shifting away from netbooks to Android tablets. ASUS also experienced a PC shipment decline in the second quarter 2013. The drop of its netbooks continued to impact its overall notebook results.

    Table 3

    Preliminary EMEA PC Vendor Unit Shipment Estimates for 2Q13 (Units)

    Company
    2Q13 Ship-ments
    2Q13 Market Share (%)
    2Q12 Ship-ments
    2Q12 Market Share (%)
    2Q12-2Q13 Growth (%)
    HP
    3,779,160
    17.8
    4,683,376
    18.3
    -19.3
    Lenovo
    2,641,622
    12.4
    2,180,362
    8.5
    21.2
    Acer Group
    2,456,255
    11.5
    3,995,518
    15.6
    -38.5
    Dell
    1,979,895
    9.3
    2,173,552
    8.5
    -8.9
    ASUS
    1,743,345
    8.2
    2,670,268
    10.4
    -34.7
    Others
    8,675,143
    40.8
    9,864,285
    38.6
    -12.1
    Total
    21,275,420
    100.0
    25,567,361
    100.0
    -16.8

    Notes: Data includes desk-based PCs and mobile PCs, including x86 tablets equipped with Windows 8. All data is estimated, based on a preliminary study. Final estimates will be subject to change. The statistics are based on the shipments selling into channels.

    Source: Gartner (July 2013)

    In Asia/Pacific, PC shipments surpassed 26.8 million units in the second quarter of 2013, an 11.5 percent decline from the first quarter of 2012. All country markets across the region showed weakness, but India performed slightly better due to a state PC tender fulfillment. China’s PC shipment remained weak as the consumer market was hampered with lack of new demand generation programs, such as subsidized PC program in the rural cities.

    These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. Additional research can be found on Gartner’s Computing Hardware section on Gartner’s website at http://www.gartner.com/it/products/research/asset_129157_2395.jsp.


    Digitimes Research: ‘Overtaking iPad will happen in 2H13’

    Digitimes Research: iPad sees its first on-year shipment drop in 2Q13 [July 29, 2013]

    image

    Global tablet shipments reached 29.32 million units in the second quarter of 2013, down 8.2% sequentially, but still up 46.6% compared to the same period a year ago. As overall market demand is declining, both iPad and non-iPad product shipments have been impacted. Because of the iPad mini’s significant shipment drop, Apple’s tablet shipments in the second quarter were only 14.6 million units, down 25.1% sequentially and 2.7% on year, according to Digitimes Research’s latest figures.

    As for non-iPad tablet shipments, non-Apple brand vendors’ new products and the second-generation Nexus 7 have both contributed to the volume, helping it to grow 18.5% on quarter and reach 14.72 million units. However, since Samsung Electronics and Lenovo have both increased their in-house production rates, Taiwan’s share of global tablet shipments dropped below 70% in the second quarter with shipments of only 20.38 million units, Digitimes Research figures showed.

    In terms of brand vendors’ ranking, Apple and Samsung Electronics were the top-two players, followed by Asustek Computer third, Lenovo fourth and Acer sixth. As for processor rankings, MediaTek was the third-largest supplier in the second quarter thanks to its strategy of pushing mainly in the entry-level segment, only behind Apple and Texas Instruments (TI). Nvidia was the fourth largest with Samsung and Intel following closely behind.

    Digitimes Research: Tablet shipments to grow 17.7% on year in 2H13 [Aug 6, 2013]

    image

    Tablet shipments in the second half are expected to reach 82.07 million units, up 17.7% on year; however, several changes will also occur during the period: hardware brand vendors will dominate the small-size tablet segment; non-iPad tablet shipments will surpass those of iPad; closed Android platforms will be impacted by the official Android platform; and Qualcomm and MediaTek will replace Texas Instruments (TI) and Nvidia in the non-Apple camp, according to Digitimes Research’s latest figures.

    Small-size devices are expected to become mainstream products of the tablet market, accounting for 70% of total shipments in the second half. Non-iPad tablet shipments are also expected to surpass those of iPad and reach 45.07 million units. With the non-iPad camp’s strong shipments, over 50% of global tablets will adopt the Android operating system in the second half, Digitimes Research estimates.

    Android’s large market share will also strongly impact closed Android platforms such as Amazon’s operating system for its tablets due to lack of key application support.

    The Retina display-featured iPad mini may not appear before the end of 2013 due to the panel’s weak yield rate and the possibility that the device may undermine sales of the new high-end iPad. As a result, Apple’s shipments in the second half may drop to 37 million units with an on-year growth of 3%.

    As for Windows-based tablets, although Microsoft is offering more price cuts for its Small Screen Touch (SST) program, the deal is unlikely to help push vendors to release Windows-based devices and the platform will only account for 3.8% of second-half tablet shipments.

    Qualcomm became the processor supplier of the second-generation Nexus 7 and the third-generation Kindle Fire, replacing Nvidia and TI. Qualcomm will ship close to 10 million processors in the second half of 2013, becoming the largest CPU supplier of the non-Apple camp. MediaTek, thanks to its hardware brand clients’ small-size tablet orders, will become the second largest supplier, followed by Samsung Electronics and Intel, both of whom will ship over seven million units.

    Taiwan makers’s tablet shipments will reach 59.45 million units in the second half, but as Samsung and Lenovo are increasing their in-house production rates, Taiwan makers’ share of global tablet shipments will drop to around 70%. As ODMs are aggressively competing for orders, Apple, Amazon and Asustek Computer will no longer place most of their orders with only Foxconn Electronics (Hon Hai Precision Industry) and Quanta Computer and will spread out their orders more evenly, Digitimes Research believes.


    Canalys says ‘Yes’

    Small tablets drive big share gains for Android [Canalys press release, Aug 1, 2013]
    – Android overtakes iOS with 53% market share in tablets

    Over 34 million tablets shipped in Q2 2013, a 43% year-on-year increase. Tablets now account for 31% of worldwide PC shipments. But Apple’s performance faltered. Its tablet shipments declined 14% on Q2 2012 and its market share dropped to 43%. The chasing pack of Samsung, Amazon, Lenovo and Acer each grew annually by over 200%, driven by increasing demand for small-screen tablets. Canalys estimates that 68% of tablets shipped in Q2 had a screen size smaller than 9″. ‘Consumers have been evaluating tablets and the results are now in,’ said Tim Coulling, Canalys Senior Analyst. ‘With touch-screens contributing to a high proportion of the build cost of a tablet, small-screen products can be priced very aggressively.’

    image

    Apple’s decline in shipments and share has been partly attributed to its aging portfolio. But Canalys believes that new product launches will have less impact on its shipments in future. ‘When Apple does decide to refresh its iPad range it will not experience the buzz of previous launches,’ said Canalys Analyst James Wang. ‘Tablets are now mainstream products and hardware innovation is increasingly difficult. With branded Android tablets available for less than $150, the PC market has never been so good for consumers, who are voting with their wallets.’ The move to smaller tablets has sparked a price war that has real consequences for the entire supply chain. These products generate little absolute margin for channel partners, vendors or component manufacturers. Content, applications and accessories (especially cases and keyboards) are now even more important to boost margins – areas where Apple remains a leader.

    In addition to disappearing margins, inventory management is emerging as a major challenge. If a vendor overcommits at the product planning stage, unsold inventory can play havoc with a company’s balance sheet, even with other hit products in a portfolio. The market for full-sized tablets has stalled and even Apple has found it harder to sell its larger iPads in recent quarters. ‘Microsoft’s inventory issues with the Surface have been well publicized,’ said Coulling. ‘Heavily discounted Surface RTs will fly off the shelves. Expect prices to continue to fall though, as the starting price of $350 is still too expensive to spark an HP TouchPad-style buying frenzy.’

    Despite its 53% share, Android still lags far behind iOS in the availability of fully-optimized tablet apps, and tablet app downloads from the Apple App Store dwarf those from Google Play. But Android is expected to continue to close the ecosystem lead iOS has in tablets and increase share in coming quarters. ‘Developers can and will quickly switch their priorities as different opportunities evolve and improve,’ said Canalys Senior Analyst Tim Shepherd. ‘We expect to see a substantial increase in the quantity, as well as the quality, of apps built or optimized for Android tablets over the next 12 months, as Google brings more attention to them through improvements to the Play store, and as the addressable base of devices continues to soar.’

    While it is true that Apple is losing its stranglehold on the tablet market in terms of volume, it will remain its most profitable vendor for years to come. Apple has already faced a similar battle in the smart phone market, and it now looks increasingly likely that it is readying a product that can address lower price tiers and high-growth markets in that space. If this is indeed the case, Apple could replicate a similar portfolio play in the tablet market. It will be in no rush – after all, the launch of the iPad mini was designed to address this segment. But its hand could be forced if competitors’ prices continue to plummet. The margin models in the smart phone and tablet markets are very different. It will still make good margin on a cheaper iPhone but will struggle to do so with a cheaper tablet, and would instead need to rely increasingly on accessory sales and, likely, subsidy from apps and content purchases.

    PC market flat in Q2 2013, despite tablet growth [Canalys press release, Aug 6, 2013]
    – Android takes 17% of PC market in Q2 as PC vendors turn to Google for tablets

    The worldwide PC market experienced a quarter without growth, as a 42.9% increase in tablet shipments was offset by declines in desktop and notebook shipments, which fell 7.4% and 13.9% respectively. Despite tablet growth slowing in Q2, Canalys still believes that tablets will outsell notebooks by Q4 of this year.

    image

    PC shipments in EMEA fell by 3% year-on-year in Q2, the first decline after two successive quarters of double-digit growth. Western Europe and Central and Eastern Europe continue to be challenging for vendors, with annual declines of 10% and 3% respectively. PC shipments in the Asia Pacific region declined 0.5% year-on-year to just over 40 million units. The region was badly affected by slow shipments in the People’s Republic of China, which accounted for almost 45% of the region’s shipments and declined by approximately 6%. Demand for smart phones and tablets is increasing around the world. Faced by an industry in transition, channel partners are exercising caution when planning and placing orders.

    Apple remained the top PC vendor in Q2, with a 4.5 million unit lead over second-placed Lenovo. But Apple’s share fell more than two percentage points to 17.1% from 19.4% in Q2 last year due an annual decrease in iPad shipments. Desktop and notebook shipments only accounted for around 20% of its total PC shipments. With tablet vendors attacking Apple on price it must bring fresh innovation to future generations of its iPad range if it is to maintain the lead it has built in the PC market.

    Lenovo had a strong quarter, gaining share in its core notebook and desktop categories, as well as tablets. Its performance in Q2 was helped by strong annual growth in EMEA (34%), the US (28%) and Latin America (93%). Lenovo’s tablet business also performed well – it shipped around 1.5 million units. ‘It is striking how successful it has been in globalizing its PC business and breaking the 1 million unit barrier is an important milestone for its tablet shipments,’ noted Canalys Analyst James Wang. ‘Lenovo is on an upward curve with its tablets, expanding in mainland China and Latin America, where there is little competition from the likes of Google or Amazon.’

    HP has overtaken Samsung to regain third place. HP has recently changed its tablet strategy and launched its first Android tablet in Q2, the Slate 7. ‘HP has a broad enterprise portfolio, channel relationships and global reach that others still cannot match,’ said Canalys Research Analyst Pin-Chen Tang. ‘To increase its market share it should look to leverage its strengths in the enterprise to advance Android in business.’

    iOS and Android have profited from the shift to tablets, as they have proved to be the only type of PC with any momentum. Android’s share of the total PC market increased to 17% in Q2 2013 from 6% a year ago. With the likes of HP, Lenovo and Samsung looking to use Android to compete with iOS in the tablet space, the platform is well placed to continue increasing its share. Google is targeting the consumer market and has its sights set on beating Apple in the smart phone and tablet space. Android remains weak in management and security, which is preventing commercial uptake. Google, or its partners, must address this shortfall quickly if it is to penetrate the enterprise

    There has been rapid innovation in the Windows category, as vendors such as HP, Lenovo, Toshiba and Acer have built PCs using a variety of new form factors. These products are struggling to take off as the difference in price between Android and Windows-based tablets remains high. ‘Component pricing has been an issue, particularly with multi-touch screens, though scale economies make this less of an issue as demand increases. The price of Windows itself is a contributing factor and one that Microsoft must address as a matter of urgency. Its PC OEM partners are in an increasingly difficult position and consolidation in the PC market is inevitable within the next 12 months,’ said Tim Coulling, Canalys Senior Analyst.

    Half a billion PCs to ship in 2013 as tablet sales rocket [Canalys press release, June 11, 2013] – Tablet shipments to grow by 59% this year to reach 182.5 million units

    Canalys’ latest forecasts for the PC market (desktops, notebooks and tablets) predict that 493.1 million units will ship in 2013, representing 7% year-on-year growth. The key driver behind this growth will be tablets, which will account for 37% of the market, up from a quarter in 2012. Looking ahead to 2017, Canalys expects that 713.8 million PCs will ship worldwide (a CAGR of 9.7%), with 64% being tablets and 25% notebooks.

    Worldwide demand for tablets has gone from strength to strength, while that for desktops and notebooks has waned. In the first quarter of 2013, the desktop market fell 10.3% and the notebook market declined 13.1%. The size of the tablet market, however, more than doubled in Q1 2013, with a 106.1% increase in shipments to 41.9 million units. Shipments show no sign of slowing and Canalys forecasts that in 2013 tablet shipments will reach 182.5 million units, with global tablet shipments surpassing those of notebooks in the final quarter of the year.

    The reception to Windows 8 has not reinvigorated demand for Microsoft-based PCs but there is a glimmer of hope for OEMs with Microsoft’s plan to release Windows 8.1 as a free upgrade. ‘Microsoft will continue to innovate. New versions will come and its OS release cycle will gain speed. But it must address some of the criticisms that have been directed at the OS’s user interface or it risks losing even more ground to iOS and Android in the PC space,’ said Tim Coulling, Senior Analyst at Canalys.

    image

    A plethora of PC vendors have now come to market with cheaper Android devices, notably Acer, Asus and HP, but these vendors are joining a crowded market. ‘Shipment numbers can be high but absolute margins on these products are expected to be small. Low-priced tablets will not be lucrative but it is necessary to compete or a vendor will simply lose relevance and scale. In fact, accessories, particularly cases, as well as the new generation of high-tech ‘appcessories’ will likely provide higher margins than the products themselves,’ said Pin-Chen Tang, Research Analyst. ‘This new influx of Android devices will provide a boost to the platform and Canalys therefore expects Android to take a 45% share this year, behind Apple at 49% [this prediction failed already for Q2 results as was reported on Aug 1 by Canalys: ‘Android overtakes iOS with 53% market share in tablets‘]. The iPad mini is expected to continue selling well, becoming more significant in terms of the product mix and spawning a further increase in consumer demand for smaller tablets.’

    The great hope for Windows 8 was that it would unleash new PC form factors, combining the best of both PCs and tablets. But James Wang, an Analyst at Canalys, noted, ‘These convertible products have disappointed so far. Convertibles are too heavy in tablet form and too expensive when compared with clamshell products. Canalys therefore expects that, for at least the next 18 months, consumers will buy separate products, rather than compromise on a Windows 8 convertible or hybrid PC. Even for Android products, alternative form factors are not expected to grow rapidly due to the category being sandwiched between low-cost slates and more familiar Windows-based clamshell notebooks.’ Out of the 388.1 million mobile PCs (notebooks and tablets) that Canalys forecasts will ship in 2013, it estimates that less than 2% will be hybrids or convertibles.

    Another ray of light for PC vendors is that PC sales to businesses are, and will continue to be, far stronger than those to consumers. This trend favors the likes of HP and Lenovo, though competition will increase as others shift resources toward the commercial channels to maximize their opportunity.

    Canalys definitions

    Appcessories: Products that connect to applications on smart devices (smart phones, tablets and notebook PCs).

    Clamshell: A notebook with keyboard/second screen fixed with a one-directional hinge only enabling movement up to 180⁰.

    Convertible: A notebook with keyboard/second screen that can be converted to a tablet form factor.

    Slate: A tablet that is not designed by its manufacturer to be fixed to a keyboard accessory with a hinge.

    Hybrid: A tablet that is designed by its manufacturer to be fixed to a keyboard accessory with a hinge.

    About Canalys

    Canalys is an independent analyst firm that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. Our customer-driven analysis and consulting services empower businesses to make informed decisions and generate sales. We stake our reputation on the quality of our data, our innovative use of technology, and our high level of customer service.


    EnfoDesk (Analysys International) from China says ‘For sure, as it is already happening against the iPad in China even at a nascent stage of the local tablet market’

    Industry data: 2013Q2 Chinese Tablet PC market sales of 3.58 million, the rapid expansion of domestic [products], apple [products] decline significantly [enfodesk.com, Aug 14, 2013] as translated by Google and Bing, with manual edits:

    According to Analysys think tank EnfoDesk latest monitoring data shows that in the second quarter of 2013 tablet PC sales in China reached 3,576,000 units, up 5.2% Q/Q growth.

    image

    According to Analysis think tank EnfoDesk in the last quarter of 2013 sales growth on the tablet PC market in China slowed down to only 5.2% Q/Q growth rate, mainly due to weak sales of Apple’s tablet computers, as its sales fell for the first time. And Samsung had eye-catching performance this quarter, after N5110 Galaxy Note 8 has been released, and sought after by the market, so the Samsung Tablet PC overall sales increased dramatically, pulling the overall market growth. Worth mentioning this quarter is that domestic brand tablet PCs, such as Teclast (台电) [see Teclast’s Tmall site in Chinese, or Pandawill’ Teclast global online site in English] and ONDA (昂达) [see ONDA’s global site in English] have gained more market share with their low prices, ultra high yield of price/performance, and best selling online channels.

    Throughout the three major tablet platforms, iOS declined significantly, it will be difficult to stop its market share erosion trends; Windows was tepid, the release of Microsoft Surface and continuous price cuts did not enhance the Windows market activity; Android cut right through the market, by virtue of many manufacturers to compete, high performance models being abundant, covering all price points of consumer groups, and with product prices constantly being refreshed, quickly seized the tablet PC market. If Apple can not launch innovative tablet PC products in the near future, [the event of] Android surpassing iOS market share is around the corner.

    Compare this to the situation in 2012:

    Apple occupied 71.6% of consumer tablets sold in the China market during the fourth quarter of 2012, according to China-based Analysys International.

    For business-use tablets alone, Eben had the largest market share at 41.9%, followed by Samsung Electronics with 21.0%, Asustek Computer with 6.6% and Lenovo with 4.5%, Analysys indicated.

    Vendor

    Market share

    Apple

    71.6%

    Lenovo

    10.2%

    Eben

    4.0%

    Samsung

    3.9%

    Acer

    2.3%

    Asustek

    1.5%

    Teclast

    1.0%

    Source: Analysys, compiled by Digitimes, April 2013

    According to the Quarterly Survey of China’s Tablet PC Market 2012Q3, 2.60 million sets tablet PC have been sold in Chinese market in Q3, 2012. Apple occupied 71.4% market share with a slight drop, Lenovo ranked second, reaching 10.52% and Ereneben ranked third with its market share being 3.61% and Samsung ranked fourth, taking up 3.53% market share.

    image

    EnfoDesk, Analysys International finds that 4 factors require our attention concerning China’s tablet PC manufacturers’ market layout in Q3, 2012:

    1. Compared with last quarter, Apple’s market share dropped from 72.66% to 71.42%. New iPad marketing promotions were made mainly in Q2. In Q3, iPad 2and The New iPad were in normal sales.
    2. The sales volume of Lenovo tablet PC rose considerably with its market share being 10.52%. Such a growth is resulted from the issue of its new products S2107 and S2109 and promotions when new semester begins for students.
    3. Ereneben issued its new product T5 in Q3, which drives the overall sales volume, and the price of T4 came down slightly in some provinces, thus increasing the sales volume of Ereneben.
    4. Samsung tablet PC enjoyed relatively stable sales in Chinese market. The company doubled their efforts in the marketing of tablet PC Note series (7 inches or above versions). Its branding effects gradually brought about and increased its sales in the Chinese market.

    Besides, the research on e-business tablet PC market conducted by EnfoDesk, Analysys International shows that Ereneben ranked first with market share being 41.07%. Samsung offered Galaxy Note 10.1 e-tablet PC to consolidate its positioning in e-business tablet PC market. Its market share was 19.66% of total e-tablet PC market. Lenovo’s Thinkpad was in normal sales, only occupied 3.89% market share.

    image

    Analysys International: iPad took up 73% of Tablet PC Market 2012Q2 [Analysis International, published in English on May 16, 2013]

    According to the Quarterly Survey of Tablet Market in China 2012Q2, released by EnfoDesk, Analysys International, market share of Apple rose to 72.66% with a sequential growth rate rising by 20.06%. Top 2 was Lenovo that witness a drop of its market share (Its market share was 8.38%). Eben ranked third with its market share being 3.63% and the market share of Samsung came down to 3.59% with its sequential growth rate dropping by 7.69%.

    image

    image

    EnfoDesk Analysys International believes that three aspects should be noticed concerning the market layout of tablet PC market in Q2, 2012.

    First, the market share of Apple has risen from 65.21% in Q1 to 72.66% in Q2. New iPad came into the market in March; however, since no substantial improvement has been made on the new products, consumers would rather wait to buy in Q2. The price reduction of iPad 2 promoted the sales volume of Apple products, allowing its market share to grow.

    Second, compared with Q1, market share of Lenovo shrank. On one hand, it was a dull season; on the other hand, it was caused by its internal policy. In September, Lenovo will launch its promotion of new products when new term begins in September (during the peak season) and the company would rather clean up stocks of its other products in Q2.

    Finally, iOS tablet PC suffers less seasonal factors than Android tablet PC. Currently, Android tablet PC market is getting stabilized. Solely relying on traditional sales channel to educate consumers was too slow and manufacturers could carry out more promotions to increase brand influence and brand concentration, grab the market share of smuggled products and clarify market layout of Android tablet PC. In addition, other tablet PC manufactures except Apple should consider its own market position and offer its unique products, gradually getting rid of homogenization of Android tablet PC. Eben as a leader in business tablet PC market offers unique products and its market positioning is clear.

    According to the statistics recently released by Analysys International, 2.34 million tablet PCs were sold in China in Q2, 2012. The sequential growth rate has reached 7.8%.

    image

    Analysys International holds that sales growth of China’s tablet PC in Q2, 2012(The growth rate has reached 7.8%) is due to the following factors:

    iPad directly triggered the market fluctuation. The price reduction of iPad forced the average price of tablet PC to go down. As a result, consumers with cash in hand developed their desire to buy and such a desire transformed into procurement, which allowed the sales volume to grow in the dull season.

    EnfoDesk, Analysys International predicts that the future market layout will be even clearer. Android manufacturers and others will target middle and low-end consumers with an attempt to avoid direct competition with Apple. Even though the sales volume of Apple will increase, its market share will continue to shrink. The market share of Android manufacturers is expected to grow and the market concentration will increase. The smuggled products will face the question of survival and the market will get further standardized.

    Research Definitions

    Tablet PC is a portable mobile internet device accessible to the network. It has independent mobile OS and is able to expand its applications. The screen ranges from 5 to 11 inch. Touch screen or pen is served as a basic input device.

    The Sales Volume is tablet PC manufacturers’ sale in China, including some overseas brands which are sold by a purchasing agency (OEM labeling products is regarded as the labeled brand. Some device manufacturers also sell some products to market abroad. This part of sales volume is not calculated in the said report).

    Research Statement

    The industrial analyses, provided by Analysys International, mainly reflect the current situation, trend, inflection point, commercial law and manufacturers’ situation. The figures and statistics are drawn by adopting a unique industrial analysis model combined with the research and study methods used by market, industry and manufactures. All the data are based on industrial macro and historical data, seasonal end-users’ and business information.

    It is believed that data concluded from research into market and trade is within acceptable errors. It can reflect the trend and commercial laws accurately.

    Results obtained by the means of professional research methods are for reference. The actual data can be obtained by checking on financial report issued by manufacturers.

    About Analysys International

    Analysys International is a leading advisor on the technology, media and telecom (TMT) industries in China. We provide data, information and advice to 50,000 clients worldwide representing 1,500 distinct organizations, deliver over 150 consulting engagements a year, and hold more than 20 events that draw in over 8,000 attendees. Our clients include executives from companies as technology vendors, vertical information technology users, as well as professionals from professional service companies, the investment community and government agencies. Our mission is simple and clear: we help our clients make better business decisions. For more information, please visit our website at http://english.analysys.com.cn.

    About EnfoDesk

    EnfoDesk is an industrial data base for subscription offered by Analysys International. It aims to help you perceive opportunities and risks in the Internet age with online database search, analyst interaction, market alarms and other functions. EnfoDesk can help you get information in time and know more about:

    –        The business mode and trend of the Internet and mobile web market

    –        The trend in policy towards the Internet and Internetized market

    –        The activities and preferences of Internet and mobile web users

    –        The potential clients and commercial opportunities

    –        The more valuable partners and cooperation mode

    –        The trend and effects of e-marketing