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PC brands plan survival tactics
Posted on 27-Jul-2016 15:12 by Bill Bennett. | Tags Filed under: News.


Personal computer sales are in free-fall. Tablet sales are in worse shape. The two do not exist in isolation. Computer makers have different strategies to squeeze the most out of a difficult market.

IDC reports the tablet market has now been in decline for six quarters in a row. Market leaders Apple and Samsung have seen year-on-year shipments drop 19 percent and 28 percent  — see table.

Top Five Tablet Vendors, Shipments, Market Share, and Growth, First Quarter 2016

(Preliminary Results, Shipments in millions)
Vendor1Q16 Unit Shipments1Q16 Market Share1Q15 Unit Shipments1Q15 Market ShareYear-Over-Year Growth
1. Apple10.325.9%12.627.2%-18.8%
2. Samsung6.015.2%8.318.0%-28.1%
3. Amazon2.25.7%0.00.1%5421.7%
4. Lenovo2.25.5%2.55.4%-13.8%
5. Huawei2.15.2%1.12.4%82.2%
Others16.942.6%21.846.9%-22.5%
Total39.6100.0%46.4100.0%-14.7%
Source: IDC Worldwide Quarterly Tablet Tracker, April 28, 2016
While Amazon and Huawei look like winners, they both come from a low base.

Amazon is an outlier. It has a different business model. The company doesn’t plan to make money from selling tablets. It sells tablets like printers, at cost or thereabout. Where printer makers earn profits from ink, Amazon aims to make money selling digital content and subscriptions.

Amazon is dominant in cloud computing. It sells cloud to business and enterprise customers. Yet the company’s only hardware play is to consumers.

Huawei moved into tablets and hybrid devices as a way of expanding its reach. It is one of the top three phone makers but Huawei’s main business is selling communications network equipment.

And that’s how Huawei plans to sell computers. They will turn up in the usual retail channels. You can also expect telecommunications companies to offer Huawei devices to customers.

Amazon is a low-cost tablet brand. Huawei and Samsung have mid-range prices. Huawei’s MateBook — yet to go on sale in New Zealand — resembles Microsoft‘s Surface Pro, but costs less.

All four tablet-makers; Apple, Samsung, Amazon and Huawei remain committed to the tablet market despite falling sales in the sector.

That’s not the case with other big brands. HP and Dell have moved away from conventional tablets. They are still focussed on PC sales. They concentrate tablet-like efforts in the hybrid sector making two-in-one Windows devices.

Hybrids are a bright spot in an otherwise depressed market. Yet sales remain tiny compared to today’s PC and tablet sectors.

This could change. Hybrids are huge with enterprise customers. Business users think they deliver better productivity than tablets and greater mobility than PCs. Users prefer them. As enterprise workforces become more mobile, they are becoming the norm in many organisations.

HP and Dell chase enterprise customers by wooing corporate buyers. Apple plays well in that market, but for the most part, individuals choose and buy MacBooks and iPads.

This explains why Apple pushed hard with the iPad Pro. They are closer to conventional iOS tablets than Windows hybrids. They have optional qwerty keyboards and the Apple Pencil to extend their appeal. The 12.9-inch model has the larger screen size preferred by enterprise customers.

Meanwhile, since splitting from HP Enterprise, the new HP is building thin, light laptops. They echo Apple’s MacBook, but offer more powerful processors and Microsoft Windows 10. There are touch screen and non-touch screen models.

Apple appears to have missed a beat. The 2016 MacBook is a minimal, elegant, mobile laptop, but there have been no other new Macs in over a year.

For the third quarter of 2016, iPad unit sales fell nine percent compared with a year earlier. Thanks to the more expensive iPad Pro models, revenue was up seven percent.

Yet Apple still has a few tricks up its sleeve. Unlike HP, it has control over its software, services and ecosystem. That should still be a recipe for success.

Microsoft is banking on a similar recipe with its Surface Pro range of hybrids. The Surface seems to be selling well. In April Microsoft reported Surface revenues climbed from US$713 million in Q3 2015 to US$1.11 billion in Q3 2016. Microsoft is coy about unit numbers, but, for now, sales are not high enough to rank in IDC’s top five.

Apple and Microsoft both play in the premium market. They promise quality, performance, added-value services and reliability. Huawei and Samsung devices cost less. They aim to offer what amounts to the same functionality at a lower price. That could prove a tough sell. HP and Dell, to a lesser extent Lenovo, reach from the low-end to the top. Their challenge is convincing high-end buyers their flagship products are different enough from cheaper models.

This story was first posted at billbennett.co.nz


Filed under: Apple, Microsoft Tagged: enterprise, PC, tablet



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