The history of client devices in recent decades is essentially one of increasing portability, as the tech industry’s focus has shifted from desktop PCs to wireless-connected laptops, tablets and smartphones, and most recently smartwatches and other wearables. Most people, in the developed world at least, now own multiple devices in different form factors and utilise numerous apps (desktop and mobile) and back-end services (cloud and web), both for personal and work purposes.
Legacy form factors rarely die off completely (there are plenty of mainframes still in operation, for example); instead, as they mature they settle into their core niches, which inevitably results in much lower quarterly and annual shipments than were seen in their heyday.
The diagram below attempts to put today’s ecosystem of client devices into perspective, arranging them on axes representing their size and on-board computing power:
Essentially the diagram shows: (1) the more content creation and editing, as opposed to content consumption and mobile communication, you want to do, the more you’re likely to want a device with a bigger screen and a keyboard; (2) there are ‘transition’ devices between major use cases in the form of the small (7-8-inch) tablet and the 17-inch desktop replacement notebook; and (3) the 2-in-1 tablet/laptop hybrid sits bang in the middle of the ‘mainstream mobile productivity’ sector — which is one reason why it’s rapidly increasing in popularity.
Desktop and portable PCs are mature form factors that have seen declining sales in recent years:
That’s not to say the PC is ‘dead’, as is often claimed. Worldwide shipments in Q3 2015 came to just under 71 million units, according to analyst firm IDC, and the prospects for an improvement in Q4 are good: “New designs running Windows 10 and powered by Intel’s new Skylake processors are coming to market and may represent the most compelling reason we’ve had in years for consumers to upgrade their PCs. Whether this compulsion translates into actual sales remains to be seen.” said IDC’s Linn Huang in an 8 October statement.
As you’d expect, market leaders Lenovo and HP delivered better than average numbers, with year-on-year declines of 3.3 and 4.4 percent respectively for Q1-Q3 2015, compared to nearly 10 percent for the overall PC market:
What’s the future for the traditional PC? Surprisingly good, it seems — in the short term at least. SpiceWorks’ recent 2016 State of IT report found that 21 percent of its (largely small-business) survey respondents’ hardware budgets will go on desktop PCs in 2016, compared to 19 percent on servers, 16 percent on laptops, 10 percent on networking, 6 percent on external storage and 6 percent on tablet/mobile:
A clue to the reason lies in the primary IT purchase driver identified in the survey: ‘end of life’ issues. Or, as Michael Dell put it at the recent Web Summit conference in Dublin: “There are about 1.8 billion PCs in the world. About 600 million of them are more than four years old. Our simple job is to create one that’s better than the one we sold you five years ago. It’s actually not that difficult to do.”
Following the iPad’s 2010 launch the tablet market grew until Q3 2014, since when it has seen four consecutive quarters of negative growth:
Contributory factors to declining tablet sales include an increasing refresh cycle — it’s now “upwards of four years”, according to IDC — and competition from large-screen smartphones and ‘phablets’. However, the tablet market could soon get a shot in the arm from a new generation of 2-in-1 hybrids: “The first generation of detachable tablets failed to gain much traction, as they represented a series of compromises in terms of both operating system and hardware that few consumers or businesses were willing to accept,” said IDC’s Tom Mainelli in a 29 October statement. “The devices shipping now represent a clear evolution of both OS and hardware, and it’s our expectation that both home and pro users will begin to embrace the form factor in larger numbers going forward.”
Apple and Samsung have historically led the tablet charge, but both are now seeing consistent double-figure year-on-year quarterly declines:
It’s no surprise, then to see both manufacturers jumping on the 2-in-1 bandwagon — Apple with its 12.9-inch iPad Pro and optional Smart Keyboard, and Samsung with its new 13.3-inch Ativ Book 9 Spin. As far as traditional slate-style tablets are concerned, the consumer market is now largely saturated while business use cases will be increasingly confined to specific vertical markets. If you want to be a mainstream mobile productivity tool, you still need a keyboard, it seems.
The smartphone market is still growing, with 355.2 million units shipped in Q3 2015 according to IDC. But year-on-year growth rates are down to single figures (6.8% in Q3), suggesting that the market is becoming saturated:
Samsung has been the leader in smartphones, usually by some distance, since 2012, with Apple consistently in second place. However, Samsung’s year-on-year growth rates have dropped sharply over the same period and only returned to positive growth (6.1%) in Q3 following five successive quarters of negative figures:
The difference in growth rate performance between Samsung and Apple over the past year reflects the different dynamics in the Android and iOS markets. Apple has complete control over the iOS ecosystem and has a loyal (to put it mildly) customer base that’s still willing to pay premium prices for iPhones which are often matched or exceeded on specifications by flagship Android handsets. Samsung, by contrast, has seen increasing competition from Android vendors — primarily Chinese firms such as Huawei, Lenovo and Xiaomi — who have driven down the average selling price to around $250, leaving its flagship $700-plus Galaxy S devices looking extremely expensive:
Going forward, IDC expects ‘phablets’ (smartphones with screen sizes between 5.5 and 7 inches) to drive shipments in both developed and emerging markets, with an emphasis on low-end/mid-range handsets in the latter.
The rise of the hybrid
IDC currently lumps slate tablets and hybrid devices with detachable keyboards together, so we can’t chart the rise of this new(ish) form factor directly. However, Panasonic has recently published some research aimed at unravelling how businesses currently view the hybrid device. Panasonic’s study — which also includes ‘convertible’ laptops with swivelling (but not detachable) screens — canvassed over 2,650 business technology buyers and users across 10 European regions (UK, Germany, France, Benelux, Italy, Spain, Russia, Turkey, Poland and Sweden).
The survey found that traditional laptops are still used by 90 percent of employees for work activities, with 72 percent using a smartphone, 61 percent using a desktop PC and 32 percent using a tablet. Hybrid convertible or detachable devices are currently being used by just 12 percent of the workforce.
However, when asked to identify the most productive device for mobile working, hybrids jumped into second place at 28 percent, behind laptops (48%) but ahead of tablets (15%) and smartphones (8%). And looking ahead, 36 percent of the survey population believe that hybrids will become the dominant business computing tool within three years, ahead of traditional laptops (26%) and all other form factors:
When asked which form factor they would choose if they could only have one device, Panasonic’s survey respondents put laptops and hybrids on equal terms (35% and 34% respectively), with tablets (10%), desktop PCs (9%) and smartphones (7%) well behind. Key drivers in favour of hybrids were more functionality and better availability of software (44%), better performance (42%), longer battery life (42%) and the presence of a keyboard (39%).
Desktop PCs are not going away anytime soon, and nor are traditional laptops or slate-style tablets. But all are retreating into their core niches and therefore selling in decreasing numbers. In future, most business users are likely to use a smartphone or phablet for mobile communication and content consumption, and — as long as manufacturers deliver functional and reliable products — a hybrid tablet/laptop for mainstream productivity tasks requiring a bigger screen and a keyboard, with the flexibility to ditch the keyboard and work in tablet mode as required.