TECHnalysis Research, LLC announced the release of its first market forecast highlighting the dramatic changes happening in the world of smart connected devices. Specifically, the firm believes that worldwide unit shipments for the large smartphone category (those with screen sizes of 5” or larger — commonly called ‘phablets’ but termed ‘mobile connected devices’ in this report) will reach just over 240 million units in 2014 versus 173 million notebooks and 158 million small tablets (those with screen sizes between 7-8”). The total market for smart connected devices is expected to grow from 1.54 billion units in 2013 to 2.06 billion in 2018, but that’s a small drop from the peak of 2.07 billion in 2017.
“Even the hottest device categories can’t keep growing forever,” commented TECHnalysis Research founder and chief analyst Bob O’Donnell, “and we believe the slowdowns that have started to occur in the US and other developed regions will start to impact the developing regions by the end of the forecast period.”
[Bob O’Donnell is a former VP and 14-year IDC veteran. At IDC, O’Donnell was responsible for the company’s worldwide mobile phone, tablet, PC and thin client research, as well as the ODM production of notebooks. He also led IDC’s display research program, which tracked both the sales and technology trends affecting the worldwide market for computer monitors, televisions and related technologies, as well as the market for large LCD panels, touch panels and ODM production of monitors and TVs.]
Looking at the results by category shows that PC shipments are expected to continue their decline for the next few years, but then level out in the 292 million unit range by 2016. Tablets are expected to continue growing throughout the forecast period, but will see very modest single-digit growth rates in the final years of the forecast, ending in shipments of 339 million in 2018. Smartphones are forecast to peak in 2017 at around 1.44 billion units but then slip to 1.43 billion in 2018. The big story in smartphones, however, is the move to larger sizes as TECHnalysis Research predicts approximately one of three smartphones shipping worldwide in 2018 will have a 5” screen or larger.
Source: TechAnalysis
Source: TechAnalysis
In the US, the total market for smart connected devices is also expected to peak in 2017 at a volume of nearly 279 million units, but starting in 2015 year-over-year growth rates will fall to under 2%, leading to a relatively stagnant level of unit shipments. US PC shipments will hover in the 58 million unit range starting in 2015, while tablets will grow from 58 million units in 2013 to nearly 74 million in 2018. Smartphone shipments are expected to peak in 2016 at 149 million units and then drop to 145 million units in 2018, although all of that decline will be in smaller smartphones (those with screens under 5”), as the larger smartphone category will grow through the forecast period and reach 30% of all US smartphone shipments in 2018.
Some of the other highlights from the forecast include:
• Android-based smart connected device shipments will hit 1.1 billon this year, but Android’s share of the total will also peak in 2014 at 62.5% and then decline modestly over the forecast period.
• Apple’s overall share of smart connected devices is forecast to hit 19.7% by 2018 while Microsoft’s share will be 19%.
• The US share of total worldwide Smart Connected Device shipments will fall from a peak of 22.6% in 2010 to 13.5% in 2018.
• Revenues for US-based sales of Smart Connected Devices are expected to continuously decline throughout the 5-year forecast from their peak in 2013 due to slowing growth and lower prices.
The TECHnalysis Research forecast offers a 5-year forward-looking view into unit shipments, average selling prices and revenues both worldwide and in the US for PCs, tablets and smartphones. The forecast also breaks the numbers out by form factor within each group (e.g., small tablets vs. large tablets), by consumer and commercial splits, and by operating system.
“We are in the midst of a dramatic recasting of the entire market for devices,” said O’Donnell. “In fact, you could argue it’s leading to a complete redefinition of what computing is, what computing means and where computing happens. As a result of these changes, there will likely be enormous shifts in power and influence across vendors, across ecosystems and across geographical regions. It’s safe to say that the world of computing and intelligent devices will look very different in 5 years compared to what it is today.”
Some portion of [those who want larger smartphone displays than Apple currently offers] are too stupid, blind, or pathologically anti-Apple to have ever purchased an iPhone, regardless of screen size.
This is not to say that Apple, the world’s most valuable tech company, rolling in more billions of dollars than they know what to do with, shouldn’t have a larger screen iPhone available by now. They should. It’s criminal malpractice on the part of Tim Cook that they don’t. The sales Apple have left and continue to leave on the table should have been keeping Phil Schiller up at night for at least the last year.
Yes, Apple should have a bigger iPhone yesterday, but this is just simple logic: Not all phablet owners would have bought an iPhone even if a bigger iPhone was available.
We understand fragmentation. We understand the issues of producing apps that work on devices with various screen sizes (intimately).
None of it matters because too much of the market wants an iPhone with a bigger screen. Developers will simply work harder for the premium customers found on the premium platform. Period.
This omission – not iMacs and Mac Pros that miss Christmas or anything else – is Tim Cook’s biggest mistake to date. Apple should have a bigger iPhone on the market by now, but since, for some inexplicable reason a company with more cash at their disposal than Intel Corp. is worth doesn’t, the sooner the better.
When Apple finally extracts their collective head from their collective ass and ships iPhone models with larger screens, they’ll do more damage to slavish copier Samsung than all of their endless, plodding patent infringement cases combined.
We believe that Apple became infatuated with the fact that only they could produce small, thin smartphones with an efficient OS that could work with the small batteries that these compact iPhones housed. “Nobody else can do such things.” Meanwhile, battery-hogging Android leeches like Samsung slapped larger screens on their phones to hide the fact that they needed significantly larger batteries in order to run for even a few hours (Android phones are notorious for running out of charge).
Far too many otherwise intelligent consumers saw little or nothing of Apple’s considerable engineering superiority (the iPhone 5s is simply the best smartphone anyone has ever produced), these otherwise intelligent consumers only saw iPhone’s smaller screens. They didn’t see Android’s inefficiency or inferior ecosystem, they only saw phones with larger screens.
If we’ve heard from one person who went with an Android phone for a larger screen who in fact really wanted an iPhone – “I’d have gotten an iPhone if only they had a larger screen” – we’ve heard it from a thousand. These are top tier, cream-of-the-crop customers (i.e. Apple’s target demographic), not low information cheapskates. They want to be Apple customers and participate heavily in Apple’s ecosystems, but, for a few years now, Apple has been blowing these sales by failing to deliver the product these high value customers desired. It’s inexplicable; any downsides (fragmentation, inventory management, etc.) are vastly outweighed by the vast sales potential to those who should be Apple customers, but are now carrying a plastic piece of crap from Samsung.
Bottom line: Apple screwed the pooch on this one. Shit or get off the pot, Tim.
