Smart Connected Devices Driving Multidevice Adoption: A look into global trends Ryan Reith April 2013
Agenda Smartphones - Continued strong growth Market Overview Outlook: what s next? Tablets The market disruptor Market overview Forecast: adding to the mobile effect Smart Connected Devices - The new way of looking at things Overview and outlook Essential guidance IDC Visit us at IDC.com and follow us on Twitter: @IDC 2
Smartphone High Growth and Access To Data The Android effect what Android has done to the smartphone market and what happens next Rapid growth has caused market disruption never seen before In 4 years, platform has grown from 7M shipments in 2009 to 497M shipments in 2012 Platform has opened and closed doors for many Low barrier to entry has changed the smartphone space as we know it Today we have 2 horse race Apple and Samsung Disruption will occur when, where, how? Third OS spot is still up for grabs BlackBerry 10, Windows Phone, and the horizon (Tizen, Mozilla, unknown) IDC Visit us at IDC.com and follow us on Twitter: @IDC 3
Smartphones More Personal Than Ever New hardware players or powerhouse companies looking to utilize what is there What s the next move for Microsoft, Amazon, and Google? Does Facebook Home change things? Smartphones have become an extension of identity the first connection point with the outside world IDC Visit us at IDC.com and follow us on Twitter: @IDC 4
Samsung & Apple Owned Huge Share of 2012 Smartphone Market Total WW Shipments: 722.4 million 2 Dominant players today but changing platforms, high demand, and new market entrants will change this Others is growing - Huawei, ZTE, Lenovo all making great in-roads Hardware vendors will struggle to differentiate SW and experience is crucial for growth
Smartphone Market Dynamics Smartphones evenly dispersed across all tiers ultra low end being the exception Today high end smartphones make up 49% of the market this will change Low-end and Ultra low expected to increasingly grow and drive overall market expansion 2017 roughly 50% of market will be sub-$200 5-inch devices to become sweet spot for smartphone growth WW Smartphone Tiers 4Q 2012 5% Ultra High End 19% 31% High End Mid Range Low End 26% 18% Ultra Low End Source: IDC s WW Quarterly Mobile Phone Tracker, March 2013
Expect Smartphone Growth at the low end Sub-$200 Growth >40% of market by 2016 IDC Visit us at IDC.com and follow us on Twitter: @IDC 7
5-Year Smartphone Forecast Smartphones shipments will equal feature phone shipments in 2013, surpass in 2014 1,600 1,400 $450 $400 WW Smartphone ASP will drop to $305 in 2017 driven primarily on low cost Android Growth mostly driven by Android new player adoption Total smartphone shipments will surpass 1 billion units in 2014, reaching 1.5 billion in 2017 China to become biggest smartphone market in 2012, surpassing USA 1,200 1,000 800 600 400 200 0 2012 2013 2014 2015 2016 2017 $350 $300 $250 $200 $150 $100 $50 $0 China will grow to 33% of smartphone market in 2013 Android Windows Phone Others ios BlackBerry OS Smartphone ASP
Tablets: Major Market Shifts Beginning ios dominance waning ipad mini may slow the trend Android on the rise Despite developer apathy White box driving growth Sub $99 products Third OS Spot Up for Grabs Win8, WinRT, & BB10 Average Screen Size Decreasing
Tablets: Still Consumption Oriented Decreasing display sizes represent consumption over productivity Windows 8 faces challenges due to tablet messaging struggles with defining consumer/consumption Vs. commercial/productivity ios has taken lead in commercial tablet growth mainly driven by education and healthcare Screens will continue to decrease in size usage models still to be determined In 2012, 34% of tablets shipments were sub 8-inches In 2013, that number will grow to 52%
Tablet Disruptors in the Mix Low cost, high functionality
Apple Dominated The 2012 Market Others, 20.4% Lenovo, 1.6% ASUS, 5.4% Apple, 51.3% Amazon, 8.1% Samsung, 13.2% Total WW Shipments: 128.4 million
5-Year Tablet Forecast Android to surpass ios shipments in 2013 Price s dropping rapidly as shift to smaller screen size takes down cost Where does MSFT fit in here? When does the commercial tablet story take effect ASP s to drop to $350 in 2017 This makes for challenging environment for high-productivity PC replacement devices 400 350 300 250 200 150 100 50 0 2012 2013 2014 2015 2016 2017 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 Android ios Windows Windows RT BlackBerry OS Other Tablet ASP
PCs: In Need of a Reboot 4Q12 wasn t pretty Everybody was down Win8 launch failed to excite WinRT confusion Touch focus backfiring Supply issues remain Emphasis on convertibles is flawed Neither a great tablet nor a great notebook Emerging market growth isn t guaranteed
The New Consumer PC Reality 15
PCs: Flat Growth Expected If Corrections Aren t Made 450 400 350 300 250 200 150 Portable PC Desktop PC 100 50 0 2012 2013 2014 2015 2016 2017 Source: IDC PC Tracker, December 2012 16
The New World View: Smart Connected Devices Successful hardware, software, and services companies will create products that interact across devices, OSes, and ecosystems 17
Units (M) Smart Connected Devices: What is Mobile Doing to PCs? 2,500 2,000 1,500 1,000 Smartphone Tablet Portable PC Desktop PC 500 0 2010 2011 2012 2013 2014 2015 2016 2017
Dramatic Platform Shifts 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 22% 17% 15% 13% 9% 7% 5% 4% 20% 27% 33% 34% 37% 44% 51% 51% 14% 16% 14% 20% 20% 18% 15% 20% 43% 41% 39% 33% 34% 32% 29% 25% Other Google Apple Microsoft Source: IDC PC Tracker, Tablet Tracker, Mobile Phone Tracker
(Millions of Units) The Balance of Power Has Shifted 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2012 2013 2014 2015 2016 2017 Smartphones Tablets Portable PC Desktop PC Source: IDC Smart Connected Devices Tracker, February 2013
The Way Forward: Embracing the Multi Device Era 21
Create Great Devices That Are True to Their Nature
Its About The Device And What's Around it. Hardware manufacturers that don t focus on ecosystem and multidevice connectivity will face challenges Consumer experience is what matters most No one devices will suit all build for change and diversification 23
Essential Guidance See the market as a whole, not in pieces PCs are not going away, but dynamics are Changing adapt to mobility Successful companies will create products that interact across devices, OSes, and ecosystems Experience is what matters most
Contact information Ryan Reith rreith@idc.com 650-350-6242 Twitter: ryanreith 25