riding a wave of change — how pc vendors are adapting to the influence of mobile devices

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TECHNOLOGY BUSINESS RESEARCH, INC.

TBR’s Computing Business QuarterlySM

Research Highlights and OutlookTechnology Business Research (TBR) Quarterly Webinar Series

July 23, 2013

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2 TBR Quarterly Webinar Series | 7.23.13 | www.tbri.com | ©2013 Technology Business Research, Inc.

Computing Business Quarterly Research Highlights and Outlook: Webinar Presenter

Jack NarcottaAnalyst – Computing Business Quarterly (CBQ)

Mobile Ecosystems (Android, iOS, Windows, BlackBerry)PCsTabletsSmartphonesThick/Thin/Zero Clients

Twitter: @JackN_TBREmail: [email protected]

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Computing Devices Landscape 1Q13 and 2H13 Outlook The definition of “PC” now includes Android Small tablets are driving huge growth Emerging markets may be a Pyrrhic victory

smartphone vendors

CBQ Research Highlights and Outlook: Agenda

Desktop PCs

Tablets

Smartphones

Notebook PCs

TBR’s Devices Benchmark provides analysis and insight into the strategies and influence of leading PC, tablet and smartphone makers

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Hyper-competitive, but less lucrative, APAC markets are the nexus of smartphone vendors’ strategies

Dominance in this competitive pricing environment will come at the expense of revenue and margins.

New devices and operating systems, and emerging market demand are dictating Computing Devices Benchmark vendors' decisions and actions

CBQ 1Q13 Research Highlights and 2013 Outlook

Computing Devices Vendor Trends for 2013

New form factors and devices built on Android or Chrome OSes aim to reignite PC demand.

Customers remain curious and enterprises remain hesitant about Chromebooks.

Tablets are upsetting the established order and influencing go-to-market and R&D strategies.

5-, 7- and 8-inch tablets are the primary drivers behind the market’s explosive growth.IMAGE SOURCE: WIKIPEDIA

IMAGE SOURCE: FORTUNE.COM

IMAGE SOURCE: GIZMODO.COM

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Smartphone vendors continue to dominate the devices marketplace, forcing PC vendors to reassess their strategies to reignite growth

CBQ 1Q13 Research Highlights and Outlook: The Devices Landscape

Samsung and Apple will continue to own the majority of revenue and profit Only PC companies with larger scale are able to ride out the tumultuous PC marketplace

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PC vendors will augment product portfolios with multiple operating systems and new form factors.

Vendors will focus on add-on sales of “outside the box” software, peripherals and services to boost revenues.

CBQ 1Q13 Research Highlights and 2013 Outlook - PC

PC Vendor Trends for 2013 Windows 8 is hampering efforts vendors to stabilize revenue and

profit, leaving vendors scrambling to find ways to grow revenue. The PC market place remains a profitable business, but at a

potentially heavy cost to smaller vendors.

Vendors with larger scale will tolerate ever-lower margins as the market remains in free-fall.

Low-margin notebook and desktop PC business segments are in jeopardy.

PC vendors are positioning devices to better match market demand, but they will be challenged to reignite revenue and profit growth


IMAGE SOURCE: AMAZON.COM

IMAGE SOURCE: TECHCRUNCH.COM

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CBQ 1Q13 Research Highlights: Key Trends - PC

Product refreshes and blitzkrieg marketing strategies propelled growth for leading PC vendors in 1Q13PCs are posting positive margins, but market contraction is shrinking profit gains

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Tablets in the enterprise remain an enigma, as they are not yet direct replacements for traditional PCs.

The struggle of Windows 8 in consumer markets has a ripple effect on the perception of its tablet PCs in the enterprise.

CBQ 1Q13 Research Highlights and 2013 Outlook - Tablets

Tablet Vendor Trends for 2013

Samsung and Apple are closing the gap between themselves and Microsoft in the enterprise.

Rival vendors will bundle tablet, PC and smartphone bundles into solutions for specific uses or vertical markets.

The slow start of Windows 8 enables Apple and Samsung to make inroads into the enterprise tablet market

The ubiquity of Office is emerging as a key differentiator for Microsoft.

Windows 8 tablet PCs with bona fide Office applications will expand Microsoft’s role in the enterprise.

IMAGE SOURCE: THEVERGE.COM

IMAGE SOURCE: SHUTTERSTOCK.COM

IMAGE SOURCE: FORBES.COM

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CBQ 1Q13 Research Highlights: Key Trends - Tablets

Low-cost Android tablets from APAC-based vendors are erasing Apple’s lead at the expense of their profitsApple’s hold on the tablet marketplace is loosening as Android OEMs jockey for position

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CBQ 1Q13 Research Highlights and 2013 Outlook - Smartphones

Larger smartphones will play an increasing role and blur the boundary with tablets

Android smartphone OEMs are targeting feature phone customers bases in emerging markets to drive growth.

Hyper-competitive emerging markets will limit profit and revenue growth of market leaders.

To position for growth in emerging economies, dominant smartphone vendors leverage their heft in developed markets

Growth of market leaders Apple and Samsung is slowing as developed markets approach saturation.

Competitive in emerging markets will drive smartphone pricing down further, speeding a march towards commoditization.

Vendors will utilize sales and marketing resources to establish footholds with carriers in emerging markets.

A captive audience of subscribers allows for insight into product and software development to lock-in customers.

IMAGE SOURCE:: BUSINESSINSIDER.COM


IMAGE SOURCE: REI.COM

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China- and Japan-based Android OEMs continue to gain market share at the expense of generating profit on par with market leaders

CBQ 1Q13 Research Highlights: Key Trends - Smartphones

Android is flooding the marketplace, erasing first-generation smartphone market share

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Competitive, less lucrative APAC markets are the nexus of smartphone vendors’ strategies

Dominance in this ultra-competitive pricing environment may result in lost profits and thin or negative margins.

New devices and operating systems, and emerging market demand are dictating Computing Devices Benchmark vendors' decisions and actions

CBQ 1Q13 Research Highlights and 2013 Outlook

Computing Devices Vendor Trends for 2013

New form factors and devices built on Android or Chrome OSes aim to reignite PC demand.

Customers remain curious and enterprises remain hesitant about Chromebooks.

Tablets are upsetting the established order and influencing go-to-market and R&D strategies.

5-, 7- and 8-inch tablets are the primary drivers behind the market’s explosive growth.IMAGE SOURCE:

WIKIPEDIA.ORG

IMAGE SOURCE: BLOOMBERG.COM


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How handset vendors are leveraging the feature phone market to build brand awareness and a customer base for smartphone sales

Understanding how emerging markets will drive handset development and go-to-market strategies

Traditional PC paradigms are being uprooted by a flood of consumer tablets into emerging and developed markets

CBQ 1Q13 Research Highlights

Computing Devices Focus Areas for 2Q13

The emergence of simple, low-cost cloud-connected devices How Windows 8 will counter the consumerization of the

enterprise

Analyze vendors’ approach to the low-cost tablet space and the convergence of tablets with large-screen smartphones

Determine x86-based Windows 8 tablets will be successful


IMAGE SOURCE: PHONEARENA.COM

IMAGE SOURCE: FORBES.COM

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For additional information, please contact:John Spooner James McIlroyDirector, Computing Practice Vice President of [email protected] [email protected]

Jack NarcottaAnalyst – CBQ@[email protected]

Technology Business Research, Inc.Hampton, N.H.Twitter: @TBRIncSlideShare: www.slideshare.net/tbr_market_insightYouTube: www.youtube.com/user/TBRIChannelLinkedIn: www.linkedin.com/company/technology-business-research

CBQ Quarterly Research Highlights and Outlook: Q & A

Questions?Ezra GottheilPrincipal Analyst - [email protected]@tbri.com

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Thank you, and see you next quarter!www.tbri.com

@TBRinc

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TECHNOLOGY BUSINESS RESEARCH, INC.

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