Through all this, PCs managed to maintain one stronghold: the enterprise market. But even in the enterprise, the tablet has now risen to challenge the PC.
There is no longer any doubt that tablets are making inroads as work devices. The question is how the tablet advance will unfold. Will tablets create a brand new market for a “third device” that employees will use together with their PCs and smartphones, or will tablets cannibalize PCs by replacing them?
The answer is that both trends will occur.
- Tablets will become a new third device for workers who already have company-issued PCs and mobile phones. These workers will use the cloud to sync their data across devices.
- Tablets will completely replace PCs for many workers such as sales staff that don’t require the processing power of stationary, desktop PCs.
- The enterprise is Microsoft’s main opportunity to challenge Apple and carve out a place for Windows 8 as a mobile platform.
- As tablets proliferate in enterprise settings, developers and startups will find a deep and lucrative niche for new apps. Currently, few developers are leveraging tablets’ natural advantages as employee and productivity tools.
The Tablet Market In Numbers
Before we get into the specific role of tablets in office settings, let’s take a look at the overall tablet market and compare it to the PC market.
Worldwide sales of tablets hit 65 million in 2011, according to BI Intelligence estimates.
Sales will double this year to between 122 and 135 million units. By 2016 manufacturers will ship between 283 million and 442 million units.
Here’s a table compiling our own and other firms’ tablet shipment estimates and projections:
|Global Tablet Shipments (In Millions)||2011||2012||2016|
In all, three quarters of a billion tablets will be in use by 2016, according to Forrester analyst JP Gownder.
This compares to 2 billion PCs in use, but it took the PC market more than 20 years to accumulate an installed base of 750 million people, according to Gownder. Tablets are on pace to accomplish the same feat in only six years. Just like their cousin, the smartphone, tablets are moving into our lives at a very fast clip.
Tablet Growth In The Enterprise
It is much harder to determine how many of these tablets are being bought by companies for distribution to their employees. But by all accounts, enterprise purchases will be a huge driver of tablet sales.
While Forrester estimates that 12 percent of employees globally are already using tablets for work, a good percentage are using their own device, not one bought by their company.
Companies, meanwhile, are becoming open to buying tablets for their employees.
A Morgan Stanley survey of CIOs in April 2012 found that two-thirds of them were already purchasing tablets for employees. (See chart to the right.)
The same survey also asked what percentage of employees would receive company-purchased tablets. CIOs reported that 9 percent of employees were being issued tablets, but that the proportion would rise to 14 percent by April 2013 (see chart, below).
In September, Apple CEO Tim Cook said that 92 percent of Fortune 500 companies are testing or deploying an iPad, so it’s safe to assume that most enterprises are at least exploring how tablets fit into to their workplace, even if they aren’t yet buying them by the thousands.
Employees are certainly asking for tablets. In 2012, for every three smartphones employees requested, they requested one tablet, according to a recent survey of 1,500 IT managers sponsored by Cisco.
As for how many total units companies will really buy, there’s a wide array of projections.
- Infinite Research estimates enterprises pu! rchased 14 million tablets in 2011. Enterprise demand will grow to over 96 million units in 2016 (or about one-quarter of tablet sales).
- McKinsey is more conservative about the weight of enterprise sales, predicting that business adoption of tablets will drive about 4 percent of total tablet growth to 2016.
Whatever the growth drivers, Apple’s iPad and its iOS operating system (shared with iPhones) will continue to own the tablet market, at least for the next few years.
But tablets running on Windows 8 are expected to pick up momentum by 2015 or 2016, in no small part thanks to enterprise adoption.
The Windows Opportunity
In 2016, tablets running on the Windows 8 operating system will command about 10 percent of the overall tablet market, according to a forecast from IDC.
Some consumer surveys point to potential for even larger Windows gains. For example, twenty-five percent of consumers said they intended to purchase a Windows 8 tablet in a Morgan Stanley survey from 2012.
Of course, this Morgan Stanley survey focused on consumers, and not enterprise users.
Nonetheless, th! e survey shows that Windows remains a strong name with consumers. That’s important for the enterprise market because through the influence of Bring Your Own Device programs, employees have clout in deciding what hardware their companies adopt and support.
If the enterprise version of Windows 8 proves popular with businesses, Windows 8 tablets could become a popular device to replace the old PCs.
However, between now and 2016, Microsoft needs to improve its tablet offering in three ways:
- Fine-tune the Windows 8 interface to be more intuitive and less buggy.
- Fill its Windows 8 store with enterprise apps that make better use of the touchscreen.
- Add more enterprise-specific features to Windows 8 and integrate them more tightly with Microsoft’s server and commercial cloud products.
Let’s assume Microsoft makes these improvements, and also continues to leverage its strengths as a distributor of Windows and the dominant Microsoft Office suite, which includes PowerPoint and Excel. (Even if Office becomes available on iPads, Microsoft can still offer Windows tablets that better integrate Office into the operating system.)
Enterprise adoption of business-friendly Windows 8 tablets would help cement tablets as a replacement for PCs for office workers.
Meanwhile, enterprise success for Windows 8 tablets means more enterprise developers will need to write more custom applications for the platfo! rm. A fe w enterprises have already begun. For instance, Rooms to Go, a furniture retailer with $1.3 billion in revenue, developed a Windows 8 app for its showroom that lets salespeople on the sales floor help customers on the spot, rather than marching customers back to a Windows workstation.
(See section below, “Apps For The Tablet Workforce,” for more on enterprise tablet apps.)
Tablets vs. PCs?
The influx of tablets into the enterprise has already hurt the PC market, particularly the low-end, low-power netbook market.
IHS, a market research firm, has predicted that about 349 million PCs would ship overall in 2012, down from 353 million in 2011.
“Not since 2001 — more than a decade ago — has the worldwide PC industry suffered such a decline,” wrote IHS analyst Craig Stice.
But there’s a clear limit to how much the tablet can erode the PC market, even if Windows 8 enterprise tablets are a wild success, at least within the next three years. Some professions will need a more powerful computer than a tablet. These are the same professions who still use high-end desktop computers today: graphic designers, analysts, computer programmers, and so on.
Interestingly, the upswing in tablets in the enterprise could eventually have a boomerang effect and help! the des ktop PC market grow again.
Forrester analyst Frank Gillet foresees a day when workers will want a more powerful desktop machine parked at the office, and use a tablet as a portable device that syncs to the desktop, and to apps and documents stored in the cloud.
“Eventually tablets will slow laptop sales but increase sales of desktop PCs,” he writes. ”That’s because many people, especially information workers, will still need conventional PCs for any intensely creative work at a desk that requires a large display or significant processing power.”
This will hold true until there’s a major breakthrough in battery technology (which researchers are working on). Until then, there will be a trade-off between power and battery life for tablets, with most tablet makers opting for battery life over power.
Just like there will be a lingering need for some professions to use high-end desktop PCs, other professions will have no use for a PC at all.
Companies that were early to tablets are making plans for a certain proportion of tablet-only employees.
Take German enterprise software company SAP, for example. The company began buying thousands of tablets in 2010. Today it has a fleet of 18,000 iPads and 4,000 Android tablets, mainly the Galaxy Tab and Galaxy Note, says Oliver Bussmann, SAP CIO. SAP is also currently testing about 50 Windows 8 tablets.
Employees with certain jobs, such as sales staff or SAP employees that work on customer websites, are issued a tablet of their o! wn choos ing.
Today, the tablet is an additional device that complements a PC, says Bussmann, but “we see more and more users” who don’t need their PCs once they get a tablet.
He says the tablet-only employee will never be 100 percent of SAP’s workforce “but I think in the next 12 months, certain user groups” will get tablets instead of PCs, such as salespeople.
As the company deployed all those tablets, the IT team started building apps for them and now has “50 mobile apps internally deployed,” Bussmann says.
SAP is a software development company, so some of this app development was a matter of eating its own dog food, meaning using the mobile tools internally that it wants to sell to customers. But even so, SAP’s experience demonstrates a trajectory many other large companies will take. For instance, one of the internally developed apps lets sales reps access SAP’s internal data about the customer, as well as relevant information about a customer from social media and news reports.
That way, as sales representatives “enter a customer meeting, they are always up to date,” Bussmann says.
Beyond SAP’s own workforce, the company also sees clients adopting tablets, and SAP wants to support all their clients’ tablet choices, according to the head of SAP’s mobile division, Sanjay Poonen.
“We want to be a Switzerland-style player,” and support iOS, Android tablets, and Windows 8 tablets, he says.
Over the next three years, tablets will become a common tool in the workforce. They will be used for more than just checking email, looking at a web page, reading a document, or carrying a presentation. They will become a new class of business tool on par with a laptop, and a good percentage of employees won’t want, or need, anything more.
Apps For The Tablet Workforce
Once employees own a tablet, even if they bought one themselves, they are likely to use it for work. For instance, 21 percent of owners of the http://w ww.businessinsider.com/blackboard/ipad-3″>iPad 3 say they use it for work, and, across iPad owners generally, 13 percent say they use it for work, according to Consumer Intelligence Research Partners.
As tablets in the enterprise reach critical mass, more software and cloud services will be developed specifically for the tablet platform.
Li says he sees an influx of startups working on enterprise apps designed exclusively for the tablet.
He offers as an example the spreadsheet, which is one of the most used, most popular enterprise apps of all times. But using it on a tablet with a touchscreen is difficult “because Excel is not designed” for a small touchscreen, he says.
Apps that address that problem are just one idea. “There’s lots of opportunity.”
(In an effort to meet this challenge, Microsoft’s new version of Office has tried to make its enterprise apps, including Excel, touch-friendly.)
Tablet-specific apps have already begun to transform certain industries and certain roles within every enterprise.
For instance, tablets are replacing paper catalogs in the pharmaceutical industry and the food distribution industry. Even as of 2011 most salespeople in these industries would still travel door-to-door with printed binders. Today they use an elect! ronic ca talog on an iPad, and tablet-specific order-entry software.
Tablets have also changed retail point-of-sale (POS) systems. It has become a new device that retail clerks can use while they roam the floor working with customers. It is capable of doing everything from checking on inventory to ringing up the purchase.
POS systems like those offered by LightSpeed, Revel Systems, ShopKeep, and POSLavu replace a PC-based cash register with a tablet.
THE BOTTOM LINE
- One-tenth of enterprise employees are already being issued company-owned tablets.
- Hundreds of thousands of employees may become mobile-only as PCs are phased out for certain job functions.
- Microsoft’s quest to create a tablet platform via Windows 8 will succeed in part thanks to enterprise preference for Windows. Windows 8 will lend impetus to a new wave of development focused on enterprise tablet apps.
Unfortunately, Samsung … not memorable, full of cliche’d cliche’s and doesn’t tell me ANYTHING about the product and why I would want to buy it…
Officially useless … why’d you have to go out and spoil a perfectly AWESOME device?
In digital marketing, the third screen is often seen as the “holy grail” since it is a device that most users have with them 24/7. However, that doesn’t mean advertisers have the right to “spam” people at all hours with messages, no matter how targeted.
Slideshare on The Third Screen
Intel Capital announced today a $100 million fund devoted to cars.
So what’s a chip company doing betting on technology in cars?
Intel estimates that by 2014, cars will be one of the top three fastest-growing markets for connected devices and Internet content. That eventually gives Intel an opportunity to put more of its chips in a whole new place: cars.
As an Intel manager put it in the press release announcing the fund: “The car is the ultimate mobile device.”
The Intel Capital Connected Car Fund will invest in technologies such as advanced driver assistance systems, speech recognition, gesture recognition, and eye tracking.
But there’s no mention of self-driving cars just yet. That is all Google for now.
In 2011, manufacturers shipped 487.7 million smartphones and only 414.6 million computers—that’s desktops, laptops and tablets. Combined. We’d heard prophecy of this day, and now it may have arrived.
The study by Canalys has troves of data about global smartphone sales, which seem to lend credence to the theory that smartphones are becoming the main computing devices of the masses. Creation and productivity tasks aside, the vast majority of what we need to do or obtain from the internet can be accomplished on a $100 device that fits in our hand. And they’re becoming near-ubiquitous.
Starting on March 1, Google will allow itself to share your personal information across Google services, as long as you’re signed in.
Google previously had 60 separate privacy policies for different products. Now, it’s got just one.
Among the changes:
- Google can now look at what you’ve been doing on YouTube, Gmail, and Google+ to suggest search results and “more relevant ads.”
- Google can take information you provide on your Google Profile, including your name and photo, and use it on all your other Google products like Gmail — and can replace past names you used, so you’re the same on all sites.
- Google will collect information from your mobile device, including your phone number, and associate it with your Google Account.
Here’s the most relevant bit pulled from the full policy:
We use the information we collect from all of our services to provide, maintain, protect and improve them, to develop new ones, and to protect Google and our users. We also use this information to offer you tailored content – like giving you more relevant search results and ads.
We may use the name you provide for your Google Profile across all of the services we offer that require a Google Account. In addition, we may replace past names associated with your Google Account so that you are represented consistently across all our services. If other users already have your email, or other information that identifies you, we may show them your publicly visible Google Profile information, such as your name and photo.
You can compare it against the current version here.
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Apple and Google activated a record breaking number of mobile devices this Christmas, according to Flurry analytics, which delivers mobile analytics to developers. Flurry has 140,000 apps running its software, and believes it can track every new Android or iOS device activated.
Between December 1 and 20, 1.5 million Android and iOS devices were activated daily on average. On Christmas day, a record breaking 6.8 million devices were activated, a 353% increase over the rest of the month. It’s also much better than 2010, when 2.8 million devices were activated.
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Additionally, while mobile only accounts for 3.74% of total online retail sales, mobile shoppers tend to be big spenders.
The average order made from an iOS device is $123, while the average order made from an Android device is $101.
RichRelevance’s data comes from 3.4 billion online shopping sessions between April and December 2011.
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Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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