Between March 30 and April 13 Gartner delivered quite new research on the IT spending forecasts till the year 2015. This presents a radically changed market outlook best viewed via the following April 5 Gartner webinar slide (warning: Gartner distinguishes between “media tablets” and “mobile PCs” while other sources are referring to “tablet PCs” in general which are including Microsoft legacy tablet PCs and upcoming Windows slates in addition to Gartner’s “media tablets”):

Follow-Up (Aug 2, 2011):
– Acer & Asus: Compensating lower PC sales by tablet PC push [March 29, 2011 with comprehensive update on Aug 2, 2011] which is showing IHS iSuppli’s recent mobile broadband device forecast with constituents of Apple’s dominant position in media tablet space as well as serious technical and market problems with the original version of Honeycomb up to now

Update: Consumer Education on Unique Use Cases Remains Largest Barrier to Media Tablet Adoption, According to Survey [ABI Research, June 13, 2011] (emphasis is mine)

It has been suggested by some that media tablets are slowly killing the netbook market, and that both device types are “cannibalizing” sales of personal computers. But results of a survey of 1,142 consumers conducted by ABI Research in March, 2011 reveal that netbooks and media tablets are actually neck-and-neck in terms of consumer interest. 25% of respondents rated themselves as either “extremely” or “very” interested in acquiring a netbook, while for media tablets, the number was 27%. Purchases of these companion devices are likely to result in a prolonged PC lifecycle and delay replacement.

But according to mobile devices group director Jeff Orr, “Nearly half of those surveyed, however, report that they are either ‘not very’ or ‘not at all’ interested in purchasing a media tablet. The most common reason for the lack of interest is ‘I don’t see the need’, selected by 60% of this group.”

Although media tablets are grabbing today’s headlines, they still face some challenges to adoption. “What activities can media tablets perform that are not already well-addressed by laptop/netbook PCs or smartphones?” Orr asks. “This remains the single largest barrier to consumer interest.”

A little more than half believe that the primary use for the media tablet will be entertainment. In line with this result, entertainment-related applications are the ones that most people report they would likely use on the media tablet:

•       82% intend to use email

•       71% expect to use a web browser

•       57% plan to watch TV or download movies

•       56% intend to use social networking

•       55% plan to play games

ABI Research conducted a similar survey on netbooks in 2009, when interest levels were shown to be higher. Moreover, the netbook use-case appears to be changing, from a focus on productivity applications towards the consumption of entertainment content. Orr says, “This change is consistent with potential buyers realigning expectations to match modern netbook capabilities.”

End of Update

Suggested associate and/or prelimary reading from this trend-tracking blog:
– China Mobile repositioning for TD-LTE with full content and application aggregation services, 3G [HSPA level] is to create momentum for that [June 18, 2011]
– Acer repositioning for the post Wintel era starting with AMD Fusion APUs [June 17, 2011]
– Barnes & Noble NOOK offensive [May 25, 2011]
– Microsoft on five key technology areas and Windows 8 [May 24, 2011]
– E Ink and Epson achieve world-leading ePaper resolution [May 23, 2011]
– Chromebook / box with Citrix Receiver going against Microsoft [May 12, 2011]
– Amazon Tablet PC with E Ink Holdings’ Hydis FFS screen [May 3, 2011]
– E Ink Holdings EPD prospects are good [April 30, 2011]
– Acer’s decision of restructuring: a clear sign of accepting the inevitable disintegration of the old PC (Wintel) ecosystem and the need for joining one of the new ecosystems under formation [April 1, 2011]
– Acer & Asus: Compensating lower PC sales by tablet PC push [March 29, 2011]
– ASUS Eee Slate based Windows marketing from Microsoft [March 21, 2011]
– ASUS, China Mobile and Marvell join hands in the OPhone ecosystem effort for “Blue Ocean” dominance [March 8, 2011]
– Be aware of ZTE et al. and white-box (Shanzhai) vendors: Wake up call now for Nokia, soon for Microsoft, Intel, RIM and even Apple! [Feb 21, 2011]
– Kinoma is now the marvellous software owned by Marvell [Feb 15, 2011]
– Marvell to capitalize on BRIC market with the Moby tablet [Feb 3, 2011]
– Changing purchasing attitudes for consumer computing are leading to a new ICT paradigm [Jan 5]
– CES 2011 presence with Microsoft moving to SoC & screen level slot management that is not understood by analysts/observers at all [Jan 7]
– Android 2.3 (Gingerbread) and 3.0 (Honeycomb) [Dec 30, 2011]
– Hanvon – E-Ink strategic e-reader alliance for price/volume leadership supplementing Hanvon’s premium strategy mostly based on an alliance with Microsoft and Intel [Dec 21, 2011]
– Intel’s industry position and prospects for years ahead [Dec 9, 2010]

For surrounding details on the new Gartner research see the presentation from the IT Spending Forecast, 1Q11 Update [April 5, 2011] Gartner webinar.

Regarding the bright prospects of the media tablets one should consider the following Gartner press releases and related blog posts as well:

Gartner Says Apple iOS to Dominate the Media Tablet Market Through 2015, Owning More Than Half of It for the Next Three Years [April 11, 2011]

Despite mounting competition from other operating systems (OSs), Apple’s iOS will continue to own the majority of the worldwide media tablet through 2015, according to Gartner, Inc. Due to the success of Apple’s iPad, iOS will account for 69 percent of media tablet OSs in 2011, and represent 47 percent of the media tablet market in 2015.

Gartner analysts said Apple iPad did to the tablet PC market what the iPhone did to the smartphone market: re-invented it. A media tablet is not just a different form factor to perform the same tasks that can be done on a PC. Tablets deliver a richer experience around content consumption, thanks to the ecosystem they support. The richer the ecosystem, the stronger the pull for consumers.

“Seeing the response from both consumers and enterprises to the iPad, many vendors are trying to compete by first delivering on hardware and then trying to leverage the platform ecosystem,” said Carolina Milanesi, research vice president at Gartner. “Many, however, are making the same mistake that was made in the first response wave to the iPhone, as they are prioritizing hardware features over applications, services and overall user experience. Tablets will be much more dependent on the latter than smartphones have been, and the sooner vendors realize that the better chance they have to compete head-to-head with Apple.”
Google’s Android OS is forecast to increase its worldwide share of the media tablet market from 20 percent in 2011 to 39 percent in 2015 (see Table 1). Analysts said Google’s decision not to open up the Honeycomb, its first OS version dedicated to tablets, to third parties will prevent fragmentation, but it will also slow the price decline and ultimately cap market share.

“Volume will be driven by support from many players, the ecosystem of applications for tablets getting more competitive and some platform flexibility allowing lower price points,” said Roberta Cozza, principal analyst at Gartner. “The new licensing model Google has introduced with Honeycomb enables Google to drive more control, allowing only optimal tablet implementations that don’t compromise quality of experience. This might mean that prices will drop at a slower pace than what we have seen in the smartphone market.”

Table 1
Worldwide Sales of Media Tablets to End Users by OS (Thousands of Units)

OS	2010	2011	2012	2015
iOS	14,766	47,964	68,670	138,497
Market Share (%)	83.9	68.7	63.5	47.1
Android	2,502	13,898	26,382	113,457
Market Share (%)	14.2	19.9	24.4	38.6
MeeGo	107	788	1,271	3,057
Market Share (%)	0.6	1.1	1.2	1
WebOS	0	2,796	4,245	8,886
Market Share (%)	0	4	3.9	3
QNX	0	3,901	7,134	29,496
Market Share (%)	0	5.6	6.6	10
Other Operating Systems	234	432	510	700
Market Share (%)	1.3	0.6	0.5	0.2
Total Market	17,610	69,780	108,211	294,093

Source: Gartner (April 2011)

With the migration of Blackberry devices to QNX – the OS used on the Blackberry PlayBook – in 2012, RIM will be able to offer users a consistent experience across its whole product portfolio and create a single developer community. While QNX is a strong platform that delivers on performance, graphics and multitasking features, Gartner analysts said success in the media tablet market will be driven by richness of ecosystem.

“It will take time and significant effort for RIM to attract developers and deliver a compelling ecosystem of applications and services around QNX to position it as a viable alternative to Apple or Android. This will limit RIM’s market share growth over the forecast period,” Ms. Milanesi said. “It will be mainly organizations that will be interested in RIM’s tablets because they either already have RIM’s infrastructure deployed or have stringent security requirements.”

Gartner analysts said platforms such as MeeGo and WebOS, which currently have a weak presence in the smartphone market, will have a limited appeal unless they can grow that business.

“Smartphone users will want to buy a tablet that runs the same operating system as their smartphone. This is so that they can share applications across devices as well as for the sense of familiarity the user interfaces will bring,” Ms. Milanesi said. “Vendors developing on Android should be prepared to see more cross brand ownership as some users might put OS over brand when it comes to the purchasing decision. Improvements on usability and brand recognition are the strongest differentiators they can focus on.”

A media tablet is a device based on a touchscreen display (typically with a multitouch interface) whose primary focus is the consumption of media. The devices have screens with a diagonal dimension that is over 5 inches and may include screens that are as large as is practical for handheld use, roughly up to 15 inches. The media tablet runs a lightweight OS such as Android and iOS that is more limited than, or a subset of, the traditional fully featured OS such as Windows.

Gartner’s detailed forecast is available in the report “Forecast: Media Tablets by Open Operating System, Worldwide, 2008-2015.” The report is available on Gartner’s website at http://www.gartner.com/resId=1624614.

Gartner Says Media Tablets Help Drive Worldwide IT Spending Up 5.6 Percent in 2011 [March 30, 2011]

Gartner has added media tablets, such as the iPad, to its computing hardware spending estimates beginning this quarter. Including media tablets has increased Gartner’s computing hardware growth outlook from 7.5 percent to 9.5 percent for 2011 (see Table 1). Worldwide media tablet spending is projected to reach $29.4 billion in 2011, up from $9.6 billion in 2010. Global spending on media tablets is forecast to increase at an annual average rate of 52 percent through 2015.

The addition of media tablets, reinforced by an expected additional decline in the value of the dollar, accounts for the increase in top-line growth,” said Richard Gordon, research vice president at Gartner. “Absent the addition of media tablets, the forecast would have slightly declined in constant-dollar terms; however, with their addition, there’s virtually no change in underlying forecast growth at the level of overall IT.”

Gartner analysts said this stable forecast outlook comes despite political unrest in the Middle East, while the impact on IT markets of the recent natural disasters in Japan is yet to be fully understood.

How much will be spent on Media Tablets in 2015? [March 30, 2011] (emphasis is mine)

Our latest global IT spending forecast is released today and for the first time we’ve included Media Tablets in our spending estimates.

Big deal you might think … what took you so long? And anyway, what difference would a few Media Tablets make to the overall numbers?

The trouble with forecasting the market for new electronics devices is that we need to beware of the hype; for every gadget that achieves market success there are dozens of failures. That said, sometimes it becomes clear early on that a new product is going to live up to expectations of rapid market adoption and that’s the case with Media Tablets, whose time has definitely come.

In our latest forecast update, the 1Q11 iteration, we estimate that about $10B was spent on Media Tablets last year – that’s about 18 million units at an average priced of $550 each. In 2015, we forecast that close to 300 million (!) units will ship with an average price of $250 each– I’ll do the math for you; that’s nearly $80B in annual spending on Media Tablets!

We recently downgraded our PC forecast through 2015, partly because we assume some substitution of PCs by Media Tablets. Nevertheless, spending on PCs and Media Tablets combined is forecast to be about $400B in 2015, with Media Tablets taking a 20% share.

For more detail of our latest global IT spending forecast, including an early assessment of the impact of the recent natural disasters in Japan and the political unrest in the Middle East, check out IT Spending, Worldwide, 1Q11 Update

Most recent IT spending forecasts are always available here: www.gartner.com/quarterly-it-forecast

Then Gartner delivered its next webinar on the iPad and Beyond: The Media Tablet in Business [April 13, 2011]

Here the company took an extended look to the market as best represented by these two slides from the attached to the webinar presentation:

So what is the story?Here Gartner’s message is the following (extracted as text from the slides which follow the above two):

1. Computing Behavior Changes, as reported by mobile salesforce workers per:
   – laptop/smartphone scenarios:
   >>> 7 sessions with 24.0 mins duration for laptops
   >>> 26 sessions with 1.5 mins duration for smartphones
   – laptop/[media] tablet/smartphone scenarios:
   >>> 4 sessions with 36.0 mins duration for laptops
   >>> 12 sessions with 7.0 mins duration for [media] tablets
   >>> 19 sessions with 1.2 mins duration for smartphones
2. Tablets and Smartphones Will Be Elements of Other Products and Systems
3. Apple iOS: The Bechmark:
   – Consumer first, enterprise second
   – Third Party Management Tools
   – Weak in integrated collaboration, social application support, cloud services
   Recommendation for Enterprise CIOs: Consider to meet user demand and for near-term projects
4. Google Android: Momentum
   – Fast innovator, not afraid to experiment
   – Surpasses Apple in overall features
   – Fragmentation is a major threat
   – Weak app validation
   Recommendation for Enterprise CIOs: Consider with enterprise-aware supplier
5. RIM QNX: Enterprise Focus
   – QNX: stable OS but with new UI
   – Catch-up on apps and ecosystem
   Recommendation for Enterprise CIOs: Consider if already a Blackberry shop; Watch app availability, Android support
6. Microsoft Windows 7: Legacy
   – “Heavy” OS in cost and resource requirements
   – Tablet OS on ARM not due until 2012
   Recommendation for Enterprise CIOs: Consider for traditional tablet PC hardware refresh, hardened legacy apps and meeting endpoint security demands
7. HP WebOS: Coming from Behind
   – Focus on sync across platforms
   – Potential as strong enterprise player
   – Major work required to build apps store and ecosystem
   Recommendation for Enterprise CIOs: Watch ecosystem and apps
8. HTML 5 Gets Strong Support
   – APIs include:
   >>> Offline Web applications
   >>> Canvas tag for 2D drawing
   >>> Offline storage database
   >>> Document editing
   >>> Drag and drop
   – Will the OS be relevant in the future?
   >>> Backing from Apple, Google, Nokia and others
   – JavaScript performance becomes important
   – Expect HTML extension and browser incompatibilities; Mobile Enterprise Application Paltforms can help

The press release Gartner Says There’s No Reason to Delay, CIOs Should Be Experimenting With Media Tablets in Business [April 5, 2011] provided these encouragement for enterprise IT (emphasis is mine):

Media tablets are presenting a variety of new opportunities for businesses, but they are also requiring a new set of policies, technologies and skills for enterprises, according to Gartner, Inc.

“CIOs are determined not to make the same mistakes they made with smartphones, which were often written off early as expensive and frivolous toys, or executive status symbols— which then left room for more inventive leaders who saw the competitive advantage that mobile applications would bring,” said David Willis, research vice president at Gartner. “They are also more willing to see that they don’t need to supply and manage every device that employees use at work: Consumerization is here to stay, and moving very fast. If you can think of an application for tablets, your competition may well be thinking in the same way — and acting on it. It is time to explore the use of media tablets in business.”

The impact of the media tablet in the eyes of the public is much greater than would be believed from the number of units shipped. Gartner expects media tablet shipments to be approximately 69 million in 2011, which is only a small fraction of the total number of application-capable mobile devices, such as smartphones. Yet already the impact of the device on other forms of computing is great.

The media tablet device itself is only part of the story. Gartner analysts said the packaging of hardware and software that Apple created with the iPad, along with the ecosystem of applications and media that surrounded it has made the real difference. Media tablets present a variety of new opportunities for business, while supplementing traditional uses of notebooks and smartphones.

“The iPad, and the larger wave of media tablets, has captured the imagination of business leaders. Some companies have issued them to business and IT leaders in the spirit of exploration. Others see areas in which they can use media tablets to bring computing into settings that were not practical or were too cumbersome to use traditional approaches,” said Mr. Willis. “For the consumer, the iPad brought a casual but rich experience into the living room, or the train, or while waiting in line at the bank. In turn, IT organizations are finding new places where tablets can deliver information and media in new ways.”

Mr. Willis pointed out that companies that had already recognized the flood of consumer devices coming into business, and had figured out a way to leverage it rather than fight it, have been more-prepared to support media tablets. Those who embraced “managed diversity” and figured out how to manage and secure iPhones, were developing strategies to manage and keep iPads within weeks of its launch.

Gartner has long maintained that media tablets are neither “better laptops,” nor “better smartphones,” but complement both. When compared with laptops, media tablets activate instantly, allowing a user to get right to what he or she needs, immediately, without long and frustrating startup times. They have exceptional battery life and are responsive, tactile and inviting. However, in a common mobile-worker scenario, employees may travel with a media tablet during the day, but then return to their laptops in the evening for heads-down data entry or content creation.

“Sales leaders are clamoring to adopt media tablets with their sales teams, as a more engaging way to share sales collateral and promotional materials. And it won’t stop there: Next will come customer relationship management systems, and order entry and sales configuration applications. For sales managers, media tablets will be a natural platform for business analytics and performance dashboards,” said Mr. Willis. “In other settings, the intimacy of using a media tablet supports more personal interactions. Doctors, nurses and medical technicians find they can sit down with a patient and help that patient understand a diagnosis, walk through a medical procedure and describe a therapy with them. Retail clerks can use tablets to display customized clothing for a customer. Conference attendees can take surveys on their own, with no training required. The opportunities are huge.”

However, just as media tablets won’t replace PCs, Gartner does not believe that they will replace mobile phones as voice devices, even in the smaller form factors, such as those with 7-inch displays. Nevertheless media tablets still have enormous potential in the workplace, although who stands to benefit most from the phenomenon remains to be seen.

“Fundamentally, the market battle will not hinge on features and specifications; on the fit and finish of a given device; or even on a device at all. The platform that will prevail will have a strong supporting ecosystem of developers producing a wide range of applications. And in this area, Apple is far ahead of any competition,” Mr. Willis said. “Not only does it have a first-mover advantage in the device itself, but it has built a curated application distribution mechanism in the App Store that is notable both for how users hold it in high regard and how detractors see it as a limitation. In the end, Apple’s lead will be very difficult to beat.”

Mr. Willis will provide more detailed analysis during the upcoming Gartner webinar “iPad and Beyond: The Media Tablet in Business” on Wednesday April 13 at 10:00 a.m. and 1:00 p.m. Eastern time. To register for the complimentary webinars, please visit http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&ref=webinar-rss&resId=1586614&prm=WB_IPD11R.

Additional information is provided in the Gartner Special Report ” iPad and Beyond: The Media Tablet in Business.” The Special Report highlights Gartner’s research and advice to customers on best practices for business uses of iPad and other media tablets. The report is available on Gartner’s website at www.gartner.com/technology/research/ipad-media-tablet.

Gartner’s media tablet forecast is included with the latest IT spending forecast and can be found on the Quarterly IT Spending Forecast page www.gartner.com/technology/research/quarterly-it-forecast/index.jsp.

Returning to presentation attached to the webinar on the iPad and Beyond: The Media Tablet in Business [April 13, 2011] there are three slides worth to include here with an additional one used by Gartner for its Strategic Planning Assumption (SPA):

Here an earlier Garner blog post comes in handy as well:

Curated App Stores, Security, And Why The Next Kindle Will Be An Android Device [March 23, 2011] (emphasis is mine)

We have been having some interesting discussions internally about the recent Android malware fiasco and how things need to be improved if Android ever wants to be taken seriously as an OS fit for use in an enterprise environment.

There has been some serious rhetoric against Apple’s “walled garden” approach in recent months but, like it or not from a philosophical standpoint, it certainly provides more protection for users than the Android Market. Some claim that the Apple approach stifles innovation. Pah! (Yes, I said “pah” – add to that a “pish and twaddle”, if you will.) One needs look no further than the sheer number of apps to shoot holes in that argument. Granted far too many of them are designed to emulate the passing of gas – some of us might argue that more controls are required, not fewer!

At the other end of the spectrum there are some truly excellent apps. Evernote, PDF Reader, TeamViewer, WebEx, GoToMeeting, Pages, Numbers, Keynote, QuickOffice, DocsToGo, SoundNote – these are all apps on which I rely daily. And for sheer awesomeness look no further than GarageBand and iMovie. No shortage of innovation and quality there then.

And from the point of view of the user – particularly the non-computer savvy user – all of this just works. Couple of clicks to search for your app. One click to purchase, download and install. And – most important of all – Trojan-free once it arrives. Curated app stores are essential to the well-being of the ecosystem.

Google needs to emulate that experience with its Market, though its very credo seems to suggest that will never happen. Yet without it the store will descend into anarchy, with users scared to purchase for fear of what new and terrible piece of malware they might be introducing to their phone or tablet.

So along comes Amazon from nowhere, and in one fell swoop it might have beaten Google at its own game. Amazon has the position of trust. It has the customer review infrastructure in place. It already has our credit card details (who hasn’t bought anything from Amazon?) And now it has an Android Appstore (TM) to go with it. Now all it has to do is make sure that the stuff it sells is safe.

It has promised to do that, by applying both quality control and security vetting to the app review process. So why wouldn’t you buy from there rather than the Google Android Market? Well, I would – I already have. But my Auntie Edna probably wouldn’t. It is way more difficult than the Apple process, and right now requires a multi-step process just to get the Appstore app on your phone. It is not that difficult, but it is certainly a sub-optimal user experience compared with the “It Just Works” approach of Apple.

So what needs to happen for the Amazon Appstore (TM) to succeed? Simple – it needs to arrive pre-installed on Android devices. Lots of them.And while I am sure Amazon is probably in discussions with a bunch of carriers to achieve that objective, what better way to make sure it happens than to ship it in huge numbers on Amazon’s very own Android tablet – The Kindle IV?

Give us that great Kindle experience with Android flexibility at a super-low price point, and you might just have your iPad-killer… I certainly haven’t seen one among the devices announced so far.

Don’t forget to follow me on Twitter (@bwalder) to be kept informed of new research.

UPDATE: For those interested in all things tablet-related, Gartner has a special report out entitled iPad and Beyond: The Media Tablet in Business. The Apple iPad and its competitors in the coming media tablet wave have captured the imagination of business leaders. This special report highlights Gartner’s research and advice to customers on best practices for business uses of iPads and other media tablets.

Amazon’s “iPad-killer” opportunity with Android is especially an interesting observation by Gartner as in another press release it has been stated:

Gartner Says Android to Command Nearly Half of Worldwide Smartphone Operating System Market by Year-End 2012 [April 7, 2011] (emphasis is mine):

Egham, UK, April 7, 2011— Worldwide smartphone sales will reach 468 million units in 2011, a 57.7 percent increase from 2010, according to Gartner Inc. By the end of 2011, Android will move to become the most popular operating system (OS) worldwide and will build on its strength to account for 49 percent of the smartphone market by 2012 (see Table 1).

Sales of open OS* devices will account for 26 percent of all mobile handset device sales in 2011, and are expected to surpass the 1 billion mark by 2015, when they will account for 47 percent of the total mobile device market.

“By 2015, 67 percent of all open OS devices will have an average selling price of $300 or below, proving that smartphones have been finally truly democratized,” said Roberta Cozza, principal analyst at Gartner.

“As vendors delivering Android-based devices continue to fight for market share, price will decrease to further benefit consumers”, Ms. Cozza said. “Android’s position at the high end of the market will remain strong, but its greatest volume opportunity in the longer term will be in the mid- to low-cost smartphones, above all in emerging markets.”

Table 1
Worldwide Mobile Communications Device Open OS Sales to End Users by OS (Thousands of Units)

OS	2010	2011	2012	2015
Symbian	111,577	89,930	32,666	661
Market Share (%)	37.6	19.2	5.2	0.1
Android	67,225	179,873	310,088	539,318
Market Share (%)	22.7	38.5	49.2	48.8
Research In Motion	47,452	62,600	79,335	122,864
Market Share (%)	16	13.4	12.6	11.1
iOS	46,598	90,560	118,848	189,924
Market Share (%)	15.7	19.4	18.9	17.2
Microsoft	12,378	26,346	68,156	215,998
Market Share (%)	4.2	5.6	10.8	19.5
Other Operating Systems	11,417.40	18,392.30	21,383.70	36,133.90
Market Share (%)	3.8	3.9	3.4	3.3
Total Market	296,647	467,701	630,476	1,104,898

Source: Gartner (April 2011)

Gartner predicts that Apple’s iOS will remain the second biggest platform worldwide through 2014 despite its share deceasing slightly after 2011. This reflects Gartner’s underlying assumption that Apple will be interested in maintaining margins rather than pursuing market share by changing its pricing strategy. This will continue to limit adoption in emerging regions. iOS share will peak in 2011, with volume growth well above the market average. This is driven by increased channel reach in key mature markets like the U.S. and Western Europe.

Research In Motion’s share over the forecast period will decline, reflecting the stronger competitive environment in the consumer market, as well as increased competition in the business sector. Gartner has factored in RIM’s migration from BlackBerry OS to QNX which is expected in 2012. Analysts said this transition makes sense because RIM can create a consistent experience going from smartphones to tablets with a single developer community and — given that QNX as a platform brings more advanced features than the classic BlackBerry OS — it can enable more competitive smartphone products.

Gartner predicts that Nokia will push Windows Phone well into the mid-tier of its portfolio by the end of 2012, driving the platform to be the third largest in the worldwide ranking by 2013. Gartner has revised its forecast of Windows Phone’s market share upward, solely by virtue of Microsoft’s alliance with Nokia. Although this is an honorable performance it is considerably less than what Symbian had achieve in the past underlying the upward battle that Nokia has to face.

Gartner analysts said new device types will widen ecosystems. “The growth in sales of media tablets expected in 2011 and future years will widen the ecosystems that open OS communications devices have created. This will, by and large, function more as a driver than an inhibitor for sales of open OS devices,” said Carolina Milanesi, research vice president at Gartner.

“Consumers who already own an open OS communications device will be drawn to media tablets and more often than not, to media tablets that share the same OS as their smartphone,” Ms. Milanesi said. “This allows consumers to be able to share the same experience across devices as well as apps, settings or game scores. At the same time, tablet users who don’t own a smartphone could be prompted to adopt one to be able to share the experience they have on their tablets.”

Note *: An open OS makes a software developer kit (SDK) available to developers, who can use native application programming interfaces (APIs) to write applications. The OS can be supported by a sole vendor or multiple vendors. It can be, but does not have to be, open source. Examples are BlackBerry OS, iOS, Symbian, Android, Windows Phone, Linux, Limo Foundation, WebOS and bada.

Gartner’s detailed forecast is available in the report “Forecast: Mobile Communications Devices by Open Operating System, Worldwide, 2008-2015.” The report is available on Gartner’s website at http://www.gartner.com/resId=1619615.

Finally there are two Gartner press releases on the state of legacy PC market which were also behind of the above reasoning:

Gartner Says Worldwide PC Shipments in First Quarter of 2011 Suffer First Year-Over-Year Decline in Six Quarters [April 13, 2011]

Worldwide PC shipments totaled 84.3 million units in the first quarter of 2011, a 1.1 percent decline from the first quarter of 2010, according to preliminary results from Gartner, Inc. Although the first quarter is traditionally a slow one for PC sales, these shipment results indicate potential sluggishness, not just a normal seasonal slowdown. These figures are below Gartner’s earlier forecast for 3 percent growth in the first quarter of 2011.

“Weak demand for consumer PCs was the biggest inhibitor of growth,” said Mikako Kitagawa, principal analyst at Gartner. “Low prices for consumer PCs, which had long stimulated growth, no longer attracted buyers. Instead, consumers turned their attention to media tablets and other consumer electronics. With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device, or simply held back from buying PCs. We’re investigating whether this trend is likely to have a long-term effect on the PC market.”

Steady growth in the professional PC sector, driven by the replacement cycle, was a bright spot for the global PC market. Without the professional segment growth, the PC market could have experienced one of the worst declines in its recent history. Replacement sales will generally continue into late 2011 or the start of 2012, with some variations between different regions and market segments.

HP performed below the worldwide average, but maintained the No. 1 position, accounting for 17.6 percent of worldwide PC shipments in the first quarter of 2011 (see Table 1). HP was impacted by weak consumer PC demand, as well as growing issues in Asia/Pacific. Acer continued to face challenges as the mini-notebook market was impacted by media tablets, and its shipments declined 12.2 percent.

Table1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 1Q11 (Units)

	1Q11 Shipments	1Q11 Market Share (%)	1Q10 Shipments	1Q10 Market Share (%)	1Q11-1Q10 Growth (%)
Company
HP	14,797,299	17.6	15,312,468	18	-3.4
Acer Group	10,893,793	12.9	12,412,859	14.6	-12.2
Dell	9,984,370	11.9	10,210,766	12	-2.2
Lenovo	8,137,904	9.7	6,976,683	8.2	16.6
Toshiba	4,821,600	5.7	4,580,746	5.4	5.3
Others	35,615,953	42.3	35,686,995	41.9	-0.2
Total	84,250,918	100	85,180,518	100	-1.1

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablet such as the iPad.
Source: Gartner (April 2011)

In the first quarter of 2011, Dell experienced a shipment decline year-over-year for the first time in six quarters. Dell underperformed in the U.S., Europe, the Middle East and Africa (EMEA) and Latin America, but it achieved strong growth in Asia/Pacific. Lenovo experienced the strongest growth among the top five vendors (16.6 percent) as it continued to price its products very competitively in both the consumer and professional sectors. It achieved strong growth across all regions.

In the U.S., PC shipments totaled 16.1 million units in the first quarter of 2011, a 6.1 percent decline from the first quarter of 2010. “As with the worldwide market, the U.S. PC market was affected by the hype surrounding media tablets. This was the third consecutive quarter of mobile PC shipment declines in the U.S.,” Ms. Kitagawa said. “The U.S. professional PC market showed steady growth across all sectors. However, the public sector showed more than the normal seasonal weakness due to budgetary issues.”

HP continued to lead the U.S. market with its market share increasing to 26.2 percent, despite a shipment decline of 3.5 percent in the first quarter (see Table 2). While HP struggled in the consumer PC market, it also encountered tough price competition in the professional segment, especially in the midmarket.

Dell faced tough competition in both the U.S. consumer and professional markets. The challenge for Dell arose in the midmarket, where more vendors tried to squeeze in to benefit from professional PC refresh cycles. Apple maintained strong shipment growth, even after the holiday season. The MacBook Pro refresh at the end of February accelerated already strong Mac growth.

Table 2
Preliminary United States PC Vendor Unit Shipment Estimates for 1Q11 (Units)

Company	1Q11 Shipments	1Q11 Market Share (%)	1Q10 Shipments	1Q10 Market Share (%)	1Q11-1Q10 Growth (%)
HP	14,797,299	17.6	15,312,468	18	-3.4
Acer Group	10,893,793	12.9	12,412,859	14.6	-12.2
Dell	9,984,370	11.9	10,210,766	12	-2.2
Lenovo	8,137,904	9.7	6,976,683	8.2	16.6
Toshiba	4,821,600	5.7	4,580,746	5.4	5.3
Others	35,615,953	42.3	35,686,995	41.9	-0.2
Total	84,250,918	100	85,180,518	100	-1.1

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks, but not media tablet such as the iPad.
Source: Gartner (April 2010)

PC shipments in EMEA totaled 26.1 million units in the first quarter of 2011, a 2.8 percent decline from the first quarter of 2010 (see Table 3).

Table 3
Preliminary EMEA PC Vendor Unit Shipment Estimates for 1Q11 (Thousands of Units)

Company	1Q11 Shipments	1Q11 Market Share (%)	1Q10 Shipments	1Q10 Market Share (%)	1Q11-1Q10 Growth (%)
Hewlett-Packard	5,019	19.2	5,532	20.6	-9.3
Acer Group	4,939	18.9	5,557	20.7	-11.1
Dell	2,318	8.9	2,500	9.3	-7.3
ASUS	1,950	7.5	2,186	8.1	-10.8
Lenovo	1,325	5.1	1,236	4.6	7.2
Others	10,567	40.5	9,856	36.7	7.2
Total	26,119	100	26,867	100	-2.8

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablet such as the iPad.
Source: Gartner (April 2011)
“The PC market in EMEA had not exhibited decline since the third quarter of 2009 when the market declined 8.9 per cent,” said Ranjit Atwal, research director at Gartner. “The excess inventory accumulated at the end of the fourth quarter of 2010 was reduced slowly, especially as some of the delayed Sandy Bridge products entered the market in March. The seasonal trend was also weaker than expected, indicating that the downward trend seen at the end of 2010 continued into the first quarter of 2011.”
Western Europe remained the main area of weakness in EMEA, as consumers continued to delay spending disposable income on PCs or other products like media tablets, especially after the launch of the iPad 2. This is extending current PC life cycles.

In Asia/Pacific, PC shipments surpassed 28.2 million units in the first quarter of 2011, a 4.1 percent increase from the first quarter of 2010. PC purchases by consumers remained weak, especially in China and Taiwan. PCs were not high on consumers’ shopping lists during the Chinese New Year holiday. In India, consumers were distracted by the Cricket World Cup. They also preferred to upgrade or purchase new TVs or other home electronics.

The PC market in Lain America grew 5.4 percent in the first quarter of 2011, as shipments totaled 8.1 million units. Brazil accounted for over 40 percent of Latin America’s PC shipments. As PC vendors’ interest in Brazil grows, so does competition. Local PC vendors are particularly vulnerable, as their strength lies in the production of desk-based PCs. Multinational vendors are making inroads by selling less-expensive mobile PCs.

PC shipments in Japan declined 13.1 percent in the first quarter of 2011, with shipments reaching 4 million units. The earthquake and tsunami on March 11 reduced PC shipments, and Gartner analysts are still investigating the scale of the impact on the market in first quarter. The impact of the disaster was most evident in the professional PC market, where the second half of March is the year’s busiest procurement period.

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.

And this was preceded by earlier Gartner Lowers PC Forecast as Consumers Diversify Computing Needs Across Devices [March 3, 2011] press release:

Gartner, Inc. is lowering its PC unit forecast for 2011 and 2012, based on expectations of weaker demand for mobile consumer PCs. Worldwide PC shipments are forecast to reach 387.8 million units in 2011, a 10.5 percent increase from 2010, according to Gartner’s preliminary forecast. This is down from Gartner’s previous projection of 15.9 percent growth this year.

Gartner expects worldwide PC shipments to total 440.6 million units in 2012, a 13.6 percent increase from 2011. This is down from Gartner’s previous outlook of 14.8 percent growth for 2012.

“These results reflect marked reductions in expected near-term unit growth based on expectations of weaker consumer mobile PC demand, in no small part because of the near-term weakness expected in China’s mobile PC market, but also because of a general loss in consumer enthusiasm for mobile PCs,” said Ranjit Atwal, research director at Gartner.

Gartner analysts said that consumer mobile PCs have been the dynamic growth engine of the PC market over the past five years, averaging annual rates of growth approaching 40 percent. For much of this period, mobile PCs remained consumers’ platform of choice for bringing the Internet into their daily lives. However, due to the spread of low-cost embedded Wi-Fi modules, Internet access is now available through a multitude of mobile devices that allow consumers to engage in virtually all their favorite online activities without the need of a mobile PC.

“We expect growing consumer enthusiasm for mobile PC alternatives, such as the iPad and other media tablets, to dramatically slow home mobile PC sales, especially in mature markets,” said George Shiffler, research director at Gartner. “We once thought that mobile PC growth would continue to be sustained by consumers buying second and third mobile PCs as personal devices. However, we now believe that consumers are not only likely to forgo additional mobile PC buys but are also likely to extend the lifetimes of the mobile PCs they retain as they adopt media tablets and other mobile PC alternatives as their primary mobile device. Overall, we now expect home mobile PCs to average less than 10 percent annual growth in mature markets from 2011 through 2015.”

The professional market is expected to continue to exhibit double-digit growth in 2011 and 2012, as aging PCs are replaced across all regions of the world. “However, even in the professional market, media tablets are being considered as PC substitutes, likely at least delaying some PC replacements,” said Raphael Vasquez, senior research analyst at Gartner.

The dramatic rise in the popularity of alternative devices and the limitations of the PC are two of many dynamics that played a significant role in Gartner’s revised outlook for the PC industry.

Media Tablets Causing Hesitation Among Potential PC Buyers
Consumer enthusiasm for media tablets is a key factor in Gartner’s forecast that the consumer mobile PC market will remain weak in mature markets. Consumer substitution of media tablets for mobile PCs already appears to be impacting mobile PC shipments in mature markets. However, a bigger issue seems to be that consumers are taking a “wait and see” attitude toward PCs as they anticipate the arrival of new media tablets during the rest of 2011.

PCs’ Limitations Are Exposed
Not too long ago, PCs were a “fashion accessory” in mature markets with vendors linking themselves to fashion designers and even creating PCs specifically for women. The current “cool” device is the smartphone, and now PCs will soon have to do battle with media tablets when they are launched in large numbers in the second quarter of 2011. Up to now, the appeal of mobile PCs has been their portability. But mainstream mobile PCs have not shed sufficient weight, and do not offer the all-day battery life, to substantiate their promise of real mobility. These limitations have become all the more apparent with the rapid spread of social networking, which thrives on constant and immediate connections. In short, all-day untethered computing has yet to materialize, and that has exposed the “mobile” PC as merely a transportable PC at best.

More information is available in the report “Forecast Alert: PC Forecast Is Lowered as Consumers Diversify Computing Needs Across Devices,” which can be found on Gartner’s website at http://www.gartner.com/resId=1558714.