Understanding the Device Market: Desktop, Tablet, and Mobile
There is a major technological revolution going on. It has started only in recent years, and it doesn’t look like it’s going to end anytime soon. We need only need to look at the fast rate that technological device manufacturers are churning out new gadgets and devices to know that we are in the thick of this technological revolution.
No argument about it: the technological devices that have made an indelible mark in everyone’s lives include the desktop computer, the tablet, and the mobile phone. The markets for these devices have been abuzz ever since, and that does not really come as any surprise. These devices have literally changed our lives, and are still doing so with every release.
In this article, we will take a look at the rapidly evolving device market, known today as the Smart Connected Device (SCD) Market, particularly for the segments devoted to the desktop computer, the tablet, and the mobile phone.
THE DEVICE MARKET FOR DESKTOPS
The desktop computer has been, for a while, referred to as a “personal computer”, is a computer that is designed to be compact and small, enough to fit comfortably on top of a desk. The entire desktop consists of a computer monitor, a horizontal or vertical tower for the central processing unit (CPU), a keyboard and a mouse. Having a desk-sized computer was a coup at the time, considering how computers back then were so large they can take up the space of an entire room. When minicomputers were introduced, they were the size of refrigerators.
How it began
The first desktop computer was introduced in 1965 by Programma 101, and it was the size of a typewriter. It was, strictly speaking, a programmable calculator. Then, in 1968, Hewlett Packard came out with its own programmable calculator in the HP 9100A. They followed it up in 1972 with the HP 9830 BASIC language computer.
International Business Machines (IBM) was one of the largest technology corporations engaged in IT consulting and services and computer software and hardware. They have later become known as the main player in the personal computer industry, and its beginnings can be traced back in 1972, when a team over at IBM used its PALM processor to develop the SCAMP, or the Special Computer APL Machine Portable, a prototype for a portable computer. SCAMP went on to be named by PC Magazine as the “world’s first personal computer”.
From that prototype, IBM launched the IBM 5100, a portable microcomputer, in 1975, and it was soon followed with a succession of personal computer models.
Apple Inc. also came out with its own series of personal computers, launching the original Macintosh computer – the Macintosh 128k – in January 1984. This made history, since it was the first personal computer targeted towards the mass market, and it featured a mouse and an integral graphic user interface.
The following decades saw more models of desktop computers being introduced, with each release evolving, becoming better than the one before. Desktops have then become the most common configuration for personal computers.
The Desktop Market
The 1980s saw the increasing dominance of desktop computers, with the market primarily dominated by IBM and Apple’s Macintosh. The main draw of desktop computers was their compact size, freeing up precious space on desks. From being used for individual and personal purposes, desktops have also become the device of choice in corporate computing settings and environments. Desktops remained popular throughout the 1990s, when they proved to be the ideal tool for gamers and enthusiasts.
It was not until the mid-2000s when desktops started suffering a decline, mainly because of the entry of more desktop manufacturers, compounded by the fact that users started shifting from desktops to the even more portable laptops. The main players in the desktop market at the time included big names such as IBM, Apple, and Dell. However, smaller desktop manufacturers popped up, developing lower quality and affordable desktop computers. These cheaper and more accessible options certainly hurt the bigger players, and the desktop market in general.
Laptops, which were primarily manufactured by Asian-based companies, became so popular that a number of desktop assembly plants in the United States started closing down. Notebook PCs also started being shipped in 2006, and consumers started preferring laptops and notebook PCs over desktops. It was in 2008 when the total shipments of notebook PCs exceeded desktop computers. As of the third quarter of 2008, there were 38.6 million units of notebook PCs sold, compared to the 38.5 million desktop units.
The late 2000s was dubbed as the “Post-PC era”, where the market experienced a further decline due to the introduction of post-PC devices, specifically tablets and smartphones. There is now a greater shift being made, as the consumers are stepping away from the desktop market and going mobile.
In 2010, desktop computers had the largest share in the total shipments of SCD devices, according to tracking efforts made by the International Data Corporation (IDC). 52.5% of the total shipments is certainly nothing to balk at. However, challenges beset the desktop market and, in four years, it registered a decline. The desktop shipments went from 52.5% in 2010 to 16.8% in 2014.
Before you read further look into this presentation in order to understand general internet trends relating to desktop, tablet, and mobile devices and applications.
THE DEVICE MARKET FOR TABLETS
Tablet computers, also known as “tablet PCs” or, simply, tablets, are mobile computers that are so compact, they are packed with a multitude of features in one single unit. A typical tablet features a touchscreen display, sensors, circuitry and battery. Cameras and microphone are already integrated into the tablet itself. There is no mouse or keyboard; in their place are stylus and the finger recognition capabilities of the touchscreen display. The name “tablet PC” became cemented when Microsoft used it to describe a prototype device they were working on in 2000.
How it began
Just like the desktop computers, the concept for tablet computers began way back in time, depicted in films and various works of literature. It was not until Atari came up with its Stylus in 1992 that the vision became more concrete. The Stylus was later named as the ST-Pad, which boasts a handwriting recognition feature. In 1994, Acorn Computers, through the initiative of the European Union, developed the NewsPad, a touch-screen tablet computer that was inspired by the NewsPad project, which was directly derived from the 1968 Stanley Kubrick film “2001: A Space Odyssey”.
It was clear that, early on, there were already a significant number of developers and manufacturers working towards developing a viable tablet PC. The first success, however, was by Samsung, with the GRIDPad, the first commercially available tablet PC, which was released in 1989. A series of tablet-type devices came after, such as AT&T’s EO Personal Communicator (1991), Apple’s Apple Newton personal digital assistant or PDA (1993), Palm’s PalmPilot PDA (1996), Intel’s Web Tablet (1999), and Microsoft’s Pocket PC (2000) and Microsoft Tablet PC (2002).
The Tablet Market
Quite possibly the most revolutionary and innovative tablet PC, the iPad was released by Apple Inc. in 2010, and the response was overwhelming. Apple was responsible for introducing the world’s first mass market desktop computer (the Macintosh computer), so it seemed inevitable that it would also be the one to launch the world’s first mass-market tablet. The iPad came with cutting edge technology, such as a dedicated operating system (the iOS) and a finger-friendly multi-touch feature. Thanks to the iPad, the tablet has become cleanly and clearly distinguished from personal computers and became a product category on its own. In fact, we cannot mention tablets without talking about the iPad, since it almost singlehandedly shaped the tablet market as we know it today.
Apple’s iPad was not the only player in the tablet market, although it was the dominant name for a good long while. Other Android-based tablets started appearing in 2008, coming from electronic giants such as Samsung, Sony and, later on, Acer, Amazon and Barnes & Noble. According to PC Magazine, in 2012, 31% of internet users in the United States owned a tablet PC, mainly the iPad. That trend reflects the bigger global picture. Statistics show that, as of November 2015, Android tablets are slowly gaining more share of the tablet market, occupying 32.08% of global tablet use, while iPad’s share is at 65.66%.
Some very interesting insights into an OEM producing tablets being interviewed on the tablet market opportunities and challenges. Great to watch.
How large is the tablet market, exactly?
In 2014, tablets had a market share of 12.5%, with a shipment volume of 229.7 million units. This was close on the heels of the shipment volume of personal computers, which was estimated at 308.13 million units.
THE DEVICE MARKET FOR MOBILE
When we say mobile, we are mostly referring to the smartphone market. Granted, there are many other devices that are designed with advanced mobile operating systems, but the largest representation of the mobile market is the smartphone segment.
Basically, a smartphone is a mobile phone equipped with the features of a personal computer, a cell phone, and other mobile devices, such as a PDA, a music or media player, and a camera. These days, smartphones are largely characterized by a touchscreen interface, Internet and other connectivity, and other high-end features. The name “smartphone” was first coined and gained worldwide acceptance when it was used to describe AT&T’s device, the PhoneWriter Communicator.
How it began
It is said that the first manufacturer to successfully integrate PDA features into a mobile phone was IBM. In 1992, IBM introduced a prototype of a cellular phone that has PDA capabilities as well as map and news features. This prototype underwent further development until it was released in 1994 as the Simon Personal Communicator, now dubbed as the first smartphone.
Hewlett-Packard took the first steps towards integrating the features of a PDA and a mobile phone. Its OmniGo 700LX, released in 1996, was a PDA that can support a Nokia phone. Nokia followed suit a few months later, coming up with the Nokia 9000 Communicator.
Qualcomm made a breakthrough in 1999 when it released the pdQ Smartphone, which has Palm PDA features and boasted internet connectivity. However, the first product to be officially marketed as a smartphone was the Ericsson R380. It was developed by Ericsson Mobile Communications and launched in 2000. By far, it was the best integration of PDA and mobile phone features.
The Smartphone Market
This might come as a surprise, but United States was not the first country to demonstrate mass acceptance of smartphone. Japan was way ahead of the game, when NTT DoCoMo came up with the first smartphones in 1999 that were adopted by a great majority of the country’s mobile users.
T-Mobile’s Sidekick, which was released in 2002 saw smartphones slowly showing signs of success in the United States. This was then followed by Microsoft’s Windows Mobile and the BlackBerry.
At that time, the operating system used by smartphones was Symbian. Late 2010, other smartphone operating systems were introduced, primarily Android, Blackberry and iOS. This was one of the main factors that contributed to the boom of the smartphone market. More manufacturers entered the market, releasing one smartphone after another. The number of smartphone users also increased exponentially, just as more app developers joined in to get a piece of the action.
Here is a good overview on key metrics and developments of the worldwide smartphone market.
Smartphones were also originally used for business purposes and in corporate settings. The tide changed when smartphone manufacturers, led by Nokia, started integrating entertainment features in its smartphones. All of a sudden, smartphones are no longer only for business people; students, housewives and practically anyone can have it and will have a use for it.
The smartphone market saw another upward spike when Apple entered the picture in 2007 with its iPhone. This smartphone came with a multi-touch interface and, while it may not be the first smartphone to have it, it’s the first to do it very well. Ease of use was one of the determining factors that drove buying decisions by consumers, and the fact that the iPhone completely dispensed with the need to use a stylus, pen, keypad, or an external keyboard, made it even more popular.
Android smartphones also ensured that more and more consumer make the transition to smartphones. The first Android-based smartphone was T-Mobile G-1 or the HTC Dream, which was released in 2008. Microsoft also entered the smartphone market with its Windows Phone.
Smartphones are, without a doubt, the major players in the mobile market today. Almost everyone has a smartphone. That is certainly not a statement that can be applied to desktop computers and tablets. It was around August of 2012 when the number of estimated users of smartphones in the worldwide reached 1 billion. In the United States, smartphone users made up 65% of all mobile users in 2013. This trend of smartphones taking the lion’s share of the SCD market is also seen in Europe, China and other parts of Asia.
Indeed, smartphone usage is a worldwide phenomenon. It was not surprising then, when IDC revealed statistics showing that the total shipments of smartphones in 2014 still overshadowed the combined number of shipments of personal computers and tablets. Smartphones made up 73.4% of the total, which is a far cry from the 16.8% of desktop computers and the 12.5% of tablets.
THE FUTURE OF THE SCD MARKET
In the First Quarter 2015 forecast by the IDC, through its Worldwide Quarterly Smart Connected Device Tracker, the three segments – desktop, tablets and mobile – still shows a lot of growth potential for the next 5 years.
This is despite the reality that, the desktop or PC market has faced more than its fair share of setbacks in recent years, and is continuing to face challenges. It still makes up a big piece of the SCD market pie. In 2014, desktop computers recorded sales of 1.6 billion units. The tracker forecasts that it will reach up to 2.5 billion units in 2019.Despite this, it is also estimated that the distribution of desktop computers will further drop from 2014’s 16.8% to around 11.6% in 2019.
The desktop and tablet markets are expected to be plagued with several more setbacks, making growth progress at a pace slower than that of the mobile market. Between 2010 and 2014, tablets have shown rapid increase in shipments, going from 2.8% to 12.5%. Four years from now, in 2019, tablet sales may rise in terms of units, but the distribution would be lower, as it is estimated to make up 10.7% of total shipments.
Much of the SCD market environment today is attributed to the increasing demand and usage of smartphones. Total shipments for 2014 pegged smartphone shipments at 73.4%, and it appears that the distribution won’t be any different five years from now. In 2019, smartphones are seen to still dominate the SCD market, claiming 77.8% of the total shipments.
Basically, forecasts show that the market for desktop computers, smartphones and tablets will continue to grow in the next five years, in terms of physical unit sales or shipment volume. However, in terms of growth, desktop computers will be on a gradual but steady decline, which is in complete contrast to tablets and smartphones. As expected, smartphones are foreseen to continue their dominant streak, taking more than two-thirds of the whole shipment pie.