Techaisle Blog

Recently we conducted a survey of small businesses to understand the adoption and cannibalization of traditional PC market by iPads and thereby Tablet PCs. Keeping aside the survey results for another time, a different blog and a report – our analysts came up with a lively discussion and two opposing views.

The debate started with the topic of Versatility: Multi role of PCs VS single role of Tablet PCs. However, Tablets are gaining docking stations and full keyboards and other aspects such as cameras will find their way in as a result of natural evolution of tablets.

For PC Cannibalization View

What will drive Tablets is the following:

• Longer battery life


• Shift to web based apps (no client download requirements)


• Cost in terms of power consumption


• Windows for Tablets


• Decreasing cost of flash storage

What will hold Tablets back:

• Manageability, tracking


• Corporate level security

Cannibalization should be discussed and thought of within the context of time. It will be significant in about 3-5 years. What it won’t cannibalize is the smart phone market. The problem this is going to cause is what do we call a notebook and what do we call a tablet. Apple has already announced that their notebooks going forward will resemble the new Macbook Air which will have access to the newly announced Mac AppStore and have access to the same apps that are available for iOS. Windows on ARM also means that previously Tablet specific apps will be available on traditional notebook form factors.

What we are seeing now is true convergence with the devices providing different user experiences depending upon whether they are used in a mobile context or not. One area where I do not see tablets replacing PCs is in software development.

Counter View

If Tablet PCs are given a keyboard, they then start to function like a notebook. If we look ahead, Cisco Cius, Apple iPad, Samsung Galaxy Tab, Avaya are not your traditional PC vendors. But more and more vendors are entering the fray and there is no stopping here. The degree of PC cannibalization will be driven by the strengths and interests of the following:

1. Suppliers: some processor manufacturer will be interested to have the Tablet market grow


2. New Entrants: data networking, phone companies, operators for 3/4G traffic utilization


3. Substitute: apps, cloud, input VS consumption


4. Customers: consumers appeal, businesses security

Cannibalization to some degree will take place and perhaps the functional substitution area is one we need to look at to determine probable size – i.e. what current functions done by PCs can be substituted by tablet PCs?

Tavishi Agrawal
Techaisle

With the ever growing uptake of smart and mobile computing devices, many IT and Telecom vendors have been quick to forecast major channel restructurings to take place. For example, for many vendors, Netbook PCs have opened entirely new avenues to consumers, increased the number of resellers in their rosters and even called for an entire reorganization of their affiliation programs.

Techaisle’s recently published survey of 2900 Small Businesses across four countries [US, UK, Brazil and Germany], however, shows that on average, less than 1 in 5 Small Business buyers are sourcing their telecom and IT equipment from the same supplier. The data has not changed significantly over the last few years, particularly if we consider the advent of IP-PBX switching and integration in data networks.

Price seems the determining factor – whilst about 1/3 of multi-sourcing SBs are not looking to consolidate purchasing practices, the research shows that the bulk majority is regularly looking at ways to unify sourcing.

The market is there but reaching it is proving to be difficult.

The same research shows that channel suppliers’ inability to price competitively individual products from both IT & Telecom worlds is the largest barrier for limiting convergence possibilities – and making SBs source each set of products from their most relevant price specialized channels. If we continue as is, we have a near perfect parallel world.



Business Buy Solutions… But also products! Get it right and a third of the market may be yours. That is the size of the buyers business which is being sought after at multi-degrees and multi-levels between shareholders, vendors and the very channel players supposed to converge.

It is not an issue about wanting to converge but the ever present need to grow that makes vendors seek to drive the IT-Telecom markets convergence and to do that, they must address this particular channel weakness – and this is not an easy task.  Invest, and others will benefit. Do nothing and nothing will happen.

Besides retail, each channel player [in their remit] is arguably looking at efficiencies, focus, expertise, and… price on a daily basis but one reseller focused on IP Telephony [and with many years of expertise in the solution] will undoubtedly struggle to reach sufficiently relevant economies of scale to price compete with a specialist counterpart in the IT world. And any investment to balance this equation will likely increase their cost structure to threaten the overall business. They will not be the first to change.

Retailers, on the other spectrum of the market, have been selling Smartphones, SIM handsets, PCs and Netbooks for many years now, but that is hardly convergence.

So it is up to the vendors to make it happen. I once read that the answer may lie in the development of program alliances - a scenario where vendor A and vendor B  define how their products fit into a solution for SBs and enable selected partners with the right approach, solutions and products [a program] to serve the market niche by niche and in a probable unified manner. Competitive dynamics may make it more like fantasy than a real proposition, but it is a nice vision of the future.

More probable drivers for channel convergence, however, are to be found in new integrated technologies or solutions [like cloud offerings billed to create a new breed of channel players] but for now there is just talk.

Paolo Puppoli
Techaisle

Microsoft’s recent announcement regarding their intention to compete with iPads and other Android based devices signals a fast acceptance of tablets becoming popular with individual and business users alike. Microsoft is not new to this market having made their first tablet/slate PC related announcements almost ten years ago when Bill Gates was still at the helm. However, over that time period, Microsoft was not able to convince PC OEMs to develop these new form factors (Fujitsu and Toshiba being the exception). Major US OEMs like HP only made a half hearted attempt to develop these new devices. The reason – Microsoft tried to push the same Windows OS on to different form factors thereby offering no additional incentive to buyers to adopt tablets. Most technology pundits have focused on the fact that Microsoft is late to market with these devices and that their stranglehold on the computing market is at risk because they risk losing consumers and ISVs to alternative operating systems such as iOS and Android. This is true and well discussed so I won’t rehash that topic in this post.

What Microsoft failed to recognize was that the tablet user experience is fundamentally different than a traditional PC. It’s not just about consuming media on a different device but rather how a user interacts with different types of software. When user interaction shifts to a different paradigm – in this case Touch /Multi-touch, the entire user experience changes. That demands a complete re-thinking of user interface design so as to make the interaction efficient and productive. I believe this to be THE key impact of tablets on personal computing. The reason iPads and Androids are succeeding is because the applications running on these devices have been written from the ground up to take this issue into consideration. I believe the growth of touch devices will challenge the long held beliefs of usability but more importantly will force ISVs to think radically about informationinput paradigms that have existed for centuries. Consider a simple task of entering data into a spreadsheet cell. Currently, the norm is to pop up a full keyboard for entering data which takes away screen real estate; this is not optimal particularly on a small device. Similarly, commonly used applications that involve form filling also fail to adequately address input and interaction issues today. For ISVs, their next generation of products will have to find a competitive edge in ease of use which I believe will take on more importance among individuals when buying products and software solutions.

Abhijeet Rane
Techaisle

Microsoft today announced that they were developing a new OS to be deployed on ARM based devices. This is the final acknowledgement that the world has moved past the Windows – Intel controlled computing sphere. Announced initially in June as Windows EC7, this has been on a steady development path leveraging earlier Win CE efforts that have been successfully deployed on ARM devices albeit as an embedded OS. The Company is not giving up on x86 development which will continue to dominate the PC computing market. It is however giving a nod to the fact that newer devices which are expected to drive additional volumes of web usage have different requirements from a hardware and software perspective. The key has been being able to balance battery power and performance requirements – something Intel’s Atom has not done very successfully leading to a huge opportunity for ARM.

What impact does this have on developers? Microsoft’s move to support ARM provides an incentive for developers to port mainstream apps to ARM. But ARM based development is not a new beast for developers to tackle. Those that have jumped into developing apps for Android and/or iOS are already familiar with developing for the ARM platform.  What developers need to focus on are the unique usability requirements related to consumption of apps on these various mobile devices.

Overall, the impact on existing Wintel market should be minimal but it seems that Intel will lose out on newer opportunities to come. You cannot count Intel out completely though for the company is fully capable of competing and “arm”-wrestle its way back into the game.

Abhijeet Rane