When will tablets outsell traditional PCs?

I truly believe, and many others in the company believe, that there will come a day that the tablet market in units is larger than the PC market.

Tim Cook Discusses Q1 2012 Results – Earnings Call Transcript – Seeking Alpha

Question is when?

I began by projecting growth rates of various market participants including the leading Windows PC makers (HP, Acer, Dell, Lenovo and Asus), the combined “others” and the Mac. I also added the iPad, Samsung’s tablets, other Google sanctioned Android tablets and Amazon. I also projected a split between traditional and tablet Windows shipments.

The underlying assumptions are:

  1. Mac growth continues at 25% as it has on average for a few years
  2. Windows grows slightly in 2012 with the introduction of Windows 8 late in the year. However I anticipate Windows 8, including tablet versions, to mostly be upgrades with slow enterprise take-up within this time frame.
  3. The tablet versions of Windows begin shipping in Q4 2012 with 7% of total Windows shipped. The ratio reaches 20% by end of 2013.
  4. iPad growth will flatten for ’12 and ’13 at 100%, similar to iPhone’s historic performance.
  5. Android tablet growth will be significant in the current year and follow iPad growth pattern though settling at 80% during ’13.
  6. Amazon growth will be approximately 80%.

Building the platforms combined growth bottom-up gives the following forecast for the next two years (and historic growth shown for perspective.)

[FF = form factor]

Given these assumptions, the day when the tablet market (by units) will exceed that of traditional PCs will come sometime in the fall of 2013.

As yesterday’s post noted, the tablet market will be additive. This can be seen in the vendor shipments forecast that accompanies the model:

  • RobDK

    Great work Horace! I believe people will truly be shocked as to how the iPad is going to explode in ’12 and ’13, and since there will be no meaningful Windows competition, as you point out, the market it there for Apple to take.

    Horace has already shown in mobile that with well over 50% of the market taken by iPhone and Android, there will be very little left for Microsoft/Nokia to take in ’12-’13 given current adoption rates for the various platforms. 

    The big question is whether this is going to play out in the same way with tablets? Horace’s projection basically says that over the 3-4 years from ’10-’13, MS monopoly is going to disappear, with market share dropping from 95% to under 50%! That is what I call disruption – and it is Apple eating the pie!

  • Eric D.

    The ’90s saw a huge increase in productivity thanks to the widening spread of the PC into enterprise. Consider simply how just email affected secretarial work, internal and external correspondence, and the huge increase in speed and volume of communications. The internet provided the bridge between islands of computing, until it grew into the main destination.

    This was basically a huge infrastructure improvement, similar to the railways of the nineteenth century, or the multi-lane highways of the second half of the twentieth.

    The iOS system (and its imitators) is also a major infrastructure improvement. Finally, there is a relatively secure environment for the development and deployment of software. The costs of packaging, shipping, distribution and piracy have been greatly reduced. Traditional marketing is being supplanted by viral campaigns. When you add ease of use, unprecedented mobility and rapid adoption of these platforms, you have the right conditions for a new, golden age of software.

    For example, Adobe sells the Mac/PC standalone version of Photoshop for US$700. A simplified but still potent version is now available on iOS and Android for $10. Why put out a product that is likely to cannibalize sales of the premium line? First, because Adobe knows that the customer base could be in the tens of millions instead of the current hundreds of thousands. Second, because if tries selling it for $20 or more, hardly anyone will buy it. Instead, consumers will shop among the growing number of competitive alternatives.

    Low-priced apps in turn increase the appeal of iOS, leading to still wider adoption. This dynamic is very difficult to resist.

    While we bemoan the lack of investment in mass transit, high-speed trains, efficient automobiles and so on, we should really take stock of how transformative iOS could be to world economies. It will significantly transform work, education and leisure. There will be huge disruption, but also vast new efficiencies and economic opportunities serving a much broader base than the PC could ever reach. It will help level access to the web and computing.

    Can this new infrastructure stimulate a new round of economic growth? If it does, what will we call it? The Apple boom or the iBoom?

  • David Weintraub

    The problem trying to predict the market in the next four years is that things will be changing quite quickly with the introduction of Windows 8. Will Windows 8 wow people, or will it be another Microsoft dud? The fact its the same operating system on tablets as well as computers has both a plus side and a down side.

    I can imagine Windows 8 being attractive because you can buy a piece of software on the desktop, and you also have it in your tablet. Right now, if I buy something on my tablet, it’s not on my PC. However, I don’t know how the phone piece fits in. Will Windows 8 take over from Windows 7 Phone? My understanding is that W8 is very, very different from W7P, and I don’t know if the software between the two will be compatible. If people are buying a phone and then either a desktop or a tablet, that identical software advantage quickly disappears.

    Another problem is that Windows 8 ARM has that desktop sitting right behind that Metro interface. And, there are somethings you can only do on the desktop. Will that turn people off? Will that make Metro seem like a mere shell?

    Windows 8 is right now a wildcard. Any prediction will depend upon how much of an disruption it is to the current market. Imagine someone in January 2007 making a prediction on how the smart phone market would be in the next five years. They’d look at RIM, Palm, and Windows Mobile 6.5 and continue drawing the various lines:

    “In 2012, Palm will gain back marketshare previously lost to Windows Mobile. Each will have about 20% of the marketspace. RIM will continue to grow and overtake all other manufacturers except for Symbian based phones which will experience a sharp increase as the software becomes more sophisticated. And, that rumored Apple phone might get a few percentage points in share, but won’t make that much of a dent in the marketplace. After all, look how well the ROKR sold.”

    No predictions can take place until the first Windows tablets come out, and we’ll see how much the public takes notice. Then, the question becomes do you say Windows is below 50% when the desktop version is less than 50% of all tablet sales, or do you count the Windows 8 tablets as part of the Windows ecosystem?

    • Anonymous

      The Windows market always says the next thing will be better. It has been this way for at least the last 20 years. And, their customers wait, and hope, that the next thing will be better than the last thing.

      Apple doesn’t talk about the next great thing, or how the new thing will be better. Instead, they ship their best product.

  • poke

    I’d question the assumption that the tablet market will be additive. In the case of feature phones and smartphones there are reasons why smartphones couldn’t simply displace feature phones: price, the cost of a data plan, infrastructure, etc. For these reasons feature phones continue to be important to emerging, high-growth markets even while smartphones displace feature phones in the developed world. This isn’t obviously true with tablets vs. PCs. Tablets do not cost more, they involve no additional fees, they require no additional infrastructure. It could even be argued that tablets are better poised to serve emerging markets than markets that are already invested in existing IT infrastructure. I think the PC market could see considerable losses with many manufacturers exiting the market entirely.

    • Anonymous

      I don’t think Horace is arguing that PC sales will not be impacted by tablet sales, he’s just saying that the value and unit sales of tablets will exceed the losses in value and unit sales of PCs. The data in the last chart showing a roughly 30% increase in PC shipments (including tablets) between 4Q09 and 4Q11 bears that out.

      See yesterday’s post about how disruptive changes increase the overall value of a market rather than merely absorbing existing value.

  • Don Duncan

    I think you’ve worked out a good set of assumptions here.  Of course they’ll be wrong, but they result in a reasonable working hypothesis.
    My own feeling is that Windows will in fact start to pick up momentum in mobile.  When I saw the first discussion of Windows 8, my reaction was, “Aha!  Microsoft finally gets it!”  With Lion, and now Mountain Lion, Apple is on the same track of blending all computer interfaces into common (or at least strongly related) paradigms.  Of course, with Microsoft, the question is always implementation; even with the software for the original Mac, it was clear that MS didn’t really *get* the Mac interface – the relationship between the technology and the user. However, W8 looks promising, and we should never forget that for those who prefer MS, it doesn’t have to be perfect, it only has to be good enough.Remember that Bi (before iPhone), Nokia had 60% of the profits in the business, and are still the big player around the world; they’re the ideal partner for MS, and both know that their futures may well depend on the partnership working.  The stability of the interface – if the carriers don’t screw it up in a desperate attempt to hold onto their old business models – will attract people struggling with spotty Android implementations or less happy about Google.  And never underestimate the hold MS has on enterprise IT people; if their phones and tablets play well with Microsoft enterprise policy management, they’ll have an edge Apple can’t match.  If Google pushes Motorola to develop advanced Android phones, organizations like Samsung may shift emphasis to Windows.  It will be a few years as this all shakes out.Their real problem will be adoption of W8 on desktops.  For a long time, PC people didn’t get just how disruptive upgrades are in large organizations; consider the number of organizations still using XP.  And W8 can be shockingly different; we’ll have to see how that plays out.

    • Anonymous

      I am not sure “good enough” will be really good enough. As well, younger IT generations has no emotional attachment or specific loyalty to MS. True, Nokia/MS partnership can have advantages over others but size and present market share are not a gouranty. Thous, further inovation and BETTER products eventually will over take cheaper and/or convenience purchasing.

      • JohnDoey

        It’s not just loyalty. Once you go over to ARM there is basically no Microsoft there at all. What little there is has hardly any installed base, and is running either end-of-lifed Windows Mobile operating systems or end-of-lifed Silverlight apps on Windows Phone which is about to be end-of-lifed. Also, there are some end-of-lifed Zunes. It’s like 2 million lost souls that might as well be running WebOS for all the compatibility they are going to have with Windows 8 apps. The Windows user shows up totally naked to WOA. Microsoft’s ARM career has not even begun. They bought some desert and promise to build a Las Vegas, but it is tumbleweeds right now.

        It is not that hard to just decide to go over to ARM these days. For many users, if you contemplate switching their main PC from one that runs an Intel chip to one that runs ARM, immediately you see they will get a device that is half the price, half the size and weight, double the battery life, and may have many more advantages also like no viruses, reduced training, reduced support.

        And a lot of the people who you might think would be really loyal to Microsoft are actually more loyal to Salesforce. Yes, they’ve been using Microsoft Windows HP PC’s for 15 years but they have been running Salesforce 75% of the time on them for the past 5 years. They look at an ARM device and they want to know if it has Salesforce, not if it has Windows.

        One thing that I think makes it easier to see what is going on is to remember that an iPad is an iPod. It could just as easily have been called “iPod PC” in the same way that iPhone is really “iPod phone.” So what is happening is iPods (using the generic use of the term) are taking over both the phone and $500 PC markets. A big reason why is that Apple designed a really good iPod-based phone and a really good iPod-based PC, but it is also because most people generally want their phones and PC’s to be as easy to use and maintain as iPods. People have either owned and used an iPod, or they have seen somebody really stupid own and use an iPod. It’s part of the culture now that a handheld touch computer does not require CS/IT training. In that case, of course Apple is doing great. Who else is good at making iPods? That is a matter of opinion. But who is the worst at making iPods? Microsoft. No debate at all. Zune, PlaysForSure, Windows Phone, Windows Mobile, Windows CE, PocketPC — they are all a disaster. They would not exist at all if not supported by profits from Intel-based software licensing sales.

        Apple probably has a bigger installed base in TV set-top boxes than Microsoft has in handheld computing. Microsoft did not prepare for the switch to ARM at all and it is going to be a total reset for them.

      • BoydWaters

        Your points about iPad as a $500 platform for web apps is a good one.


        I am typing this on a bluetooth keyboard to my iPad, just like a mini laptop. It’s great. But an hour ago, I was in hell trying to deal with a PDF sent to me as an email attachment on my iPad. There was no way to “save” the PDF to an iOS app of my choice. I had to jump through some insane hoops, no doubt sending the document across the continent a couple of times before I could get the data from one app “silo” to another.

        This would be a WTF? non-issue on Android or (I presume) Windows 8.

        So make damn sure you’ve trained *everyone* in your enterprise on cloud-based workflows before you take away their Windows (or OS X, or Linux) PCs.

    • Anonymous

      No, you are totally wrong. Apple is on a totally opposite track of keeping the consumer and professional interfaces entirely separate. The fact that they share some common features when it makes sense to do so is a feature, it is not the result of just mashing 2 things together and calling them one.

      Further, there is not one Windows 8. Here is how Apple and Microsoft compare in 2013:

      – notebooks: OS X and Windows 8 (Intel)
      – tablets: iOS and WOA
      – phones: iOS and WOA

      • BoydWaters

        Some good points here, but a couple of things:

        1) From a developer point of view, I am uncomfortable with your congruency argument (Apple, Microsoft have the same strategy)
        I think (having developed for OS X, iOS, Windows desktop) that writing iOS apps is much much closer to writing for OS X than Windows desktop is to Windows 8 on ARM. Or Android is for enterprise Java developers. But I only downloaded Visual Studio Express for Win 8 a few hours ago, so I don’t know.

        But I don’t see how Win32 API or .NET developers are going to ship Win 8. To first order, WOA apps can be repackaged web apps.

      • BoydWaters

        (sorry, some weirdness with my web browser just now, I couldn’t finish my comment…)

        Anyway I think that Windows 8 might be attractive to developers, if the “write apps in JavaScript!!” claims are true. BUT I don’t think that this is the same strategy as their “Windows Phone 7” platform! Are they fragmenting their own developer base again?

        I wish I knew. But I’m concentrating on web applications (client desktop web browsers and iOS apps talking to servers), just like everyone else right now. Windows 8 is very attractive but not worth the risk.

        Will corporate IT be willing to take even more risks than an independent developer?

        I think it will be very interesting to see how Microsoft will pitch Windows 8 development and support to corporate IT.

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  • The big variable is going to be how much of the Tablet market the Android/Amazon platform will grow. 80% growth may be a reasonable figure, but its starting from a very low base. Google and the Android hardware makers have had two years to come up with a viable competitor to the iPad, but have failed dismally to get any traction with anything other than fire-sale priced loss leaders.

    Given the continued legal pressure put on Android device manufacturers by both Apple and Microsoft, combined with the stunning lack of profits to be earned shipping Android tablets, doesn’t this suggest a rush by hardware manufacturers to embrace Windows 8 for their Tablet offerings? Samsung, Dell, HTC, and Lenovo might have to pay Microsoft $40 or $60 for a Windows 8 license, as opposed to getting Android for “free”, but isn’t it worth it to know they won’t be slapped with import bans and hefty legal bills? 

    • Plausible hypothesis, but the same could be said of the most of the smartphone market, and we don’t exactly see manufacturers rushing to WP7.

      I have a feeling that having been burned by the Android tablet debacle, manufacturers will be cautious in spending a lot of resources making Windows 8 tablets, until they see someone getting reasonable traction with them. I’m sure we’ll see a lot of announcements, but I wouldn’t be surprised if the initial build volumes will be low.The problem with Windows 8 tablets is much the same as with most of the Android tablets — lack of ecosystem scale. Only Amazon seems to be getting much traction, and they’re got both low price point and ecosystem working for them.The other potential driver of Windows 8 tablets is the “all Microsoft all the time” corporate IT model, which seems to be breaking down these days. Given that W8 tablets will apparently lack the enterprise management features, I’m not sure corporate uptake will be all that strong. Presumably MS will fix this at some point, but it looks like it’s lacking in the first release.I suppose a deal between MIcrosoft and Facebook to make a Facebook-branded tablet might put some energy behind W8 tablets, but I can’t see much else that would. A Sony deal, maybe — they own a lot of content, but they haven’t been able to leverage it in their products so far, I think mostly because they’ve been more interested in protecting their content than giving the consumer what they actually want.

      • Iain Perkin

        W8 will actually be in two forms; WOA (Windows on Arm) and WOI (Windows on Intel). The WOA tablets lack the enterprise management features but in theory have the longer battery life. The WOI tablets will need some major Intel breakthroughs in power consumption to achieve market penetration beyond Corporate.

      • Walt French

        We’re still in the “7 blind men and the elephant” phase with Windows 8, and people are seeing mostly what they want in it. I think this is pretty much by Microsoft’s design; it’s supposed to be the One OS for all uses. 

        That actually worked once. IBM’s System/360 spanned many different architectures, fabulously well in fact, despite an agonizing gestation. Microsoft at least seems to have avoided the overly-complex issue that almost destroyed that, and DID destroy many more such projects. Another similar effort, the UCSD Pascal project, ran on dozens of different architectures, but only by dumbing down to a too-low lowest common denominator. It ended up having limited impact; System/360 is the only successful example I can think of.

        Microsoft seems to be managing the project passably well, despite having failed badly with what should have been a much less-complex Kin project. But will it actually please users?

        I can’t find my copy of Taking Charge of Change, but IIRC, it posits some people look forward to change; some will find fault with it no matter what, and the challenge is to bring along the other 70% who need to see how the benefits outweigh the effort. The 30% have written previews in the blogs by now; they are opinion shapers whom Microsoft still can bring around.

        But I foresee difficulty in communicating to the 70%. Win8 *can* run old software on more powerful Intel gear, but not in the mobile-oriented metro mode; the highly efficient tablets using ARM chips won’t run those. This will create a bifurcation where companies use Win8 and individuals, who have little need to buy a device that needs to be sync’d up to the office, staying on Apple. Partly this is a technical divide, but it’ll end up also being image and message: Microsoft cannot credibly be all things to all people, and does not now have a base of goodwill, phones & iPods or the rest of the individual suite.

        So maybe the WoI tablets *will* get close enough to ARM power levels, but I don’t see how it’ll be that big a deal. At least for another couple of years, by which time, who knows?

      • Smooth

         You should check out the latest Intel power figures.  They meet/beat ARM and at 22nm, they should easily beat ARM.  BTW, no one, aside from Intel has shown the ability to mfg 22nm in volume.  My best guess is that Apple will need to switch to Intel.  TWT.

    • Anonymous

      It is only worth it if consumers buy the devices. There is no consumer demand for Windows. Windows is what they are relieved to get away from on ARM systems. Windows is what dad uses. There will be no resurrection. The idea is absurd. Microsoft is niche, not mass market. The mass market consumer computer is ARM, where Microsoft has zero installed base with the exception of maybe 2 million placeholder WinCE-based Windows Phone 7 devices which are hideously obsolete and entirely irrelevant to posterity.

      • capnbob67

        Did MS kill your puppy? I generally concur though MS has proven an ability to create a “cool” hardcore multi-million person consumer following in the Xbox. A rebrand away from Windows might do them a power of good?

    • poke

      I’m not convinced that Windows 8 tablets will compete directly with the iPad and Android tablets. The demo tablet devices that journalists and bloggers are currently using to run Windows 8 Consumer Preview are 1.6 ghz Intel i5 machines with 4 gb RAM. When they come out in October they will be priced around the $800-1000 mark if manufacturers are to be believed. Windows on ARM is coming but it’s hard to see how the OS will scale down to an iPad-like device. It looks to me more like Windows 8 is an update of Microsoft’s existing tablet PC initiative and the talk about ARM is mostly vapour.

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  • Walt French

    I know the industry is all about growth rates, but I think this almost begs the question. It tells you what mix of platform growth rates are necessary to hit 50% by late next year.

    Horace, I think you have better command of a better tool for understanding the question, and it’s the “job to be done.”

    I’d draw a 2X2 matrix of business/personal versus mobile/traditional, and look in each box.

    Business•traditional is flat at best. If Win8 has features that support tablets, then the new software will be most easily delivered on new Dells and HPs. More likely, Win8 needs a year to be considered for roll-out, and meanwhile PC sales will languish in this area— maybe, off 25% 2012Q3 vs 2011Q3. Current desktop hardware is well-suited to handle current Enterprise tasks, virtually by definition, so high growth rates are impossible without an unforeseen shift in companies’ modus operandi

    I would tackle Personal•traditional mostly by extrapolating the recent growth rates because the new Win8 features don’t seem to address home PC users, and Macs are ironically growing in value as Apple moves its digital hub strategy from the Mac to the cloud. Outside of the US, however, value considerations mean a relatively high growth rate of inexpensive desktops continues. Much of this demand will migrate to increasingly powerful, lower-cost smartphones.

    Business•mobile gets REAL interesting and needs more than I’ll bore folks with. My company’s intensive use of PCs would benefit very little from tablets because we run complex, customized software with high security needs. Win-on-ARM can’t tackle that (no Active Directory, not enough horsepower), even if we became more unchained from our desks, while X86 tablet is an unproven concept, an unknown for me, especially regards power. Other companies may provision tablets as expensive PDAs; that seems like a medium-volume potential. The real surge will come for new business functionality, mostly by mobile workers (duh!) outside of the current security cocoon: today’s 18,000 iPad purchase for the USAF is a fine example. Regards Apple-v-Win, task-specific app development is roughly a tossup while Microsoft will win on functions that need close connectivity to existing corporate data and the concomitant reduced mobility.

    Personal•mobile is (a) huge, (b) exploding, and (c) in the US, anyway, Apple’s to lose. Demographically, urban under-35 types never slow down enough to sit at a desk; families need a constantly-changing mix of personal devices; and even we oldsters don’t want heavy travel to disrupt our connectedness: I personally just got home last night from three work days on the road while my wife crossed the continent the other direction for a friend’s retirement party. 

    These jobs are primarily connectedness/social and media/entertainment, I think, and everybody craves hugely more bandwidth on these (even introverts such as myself). Many of them were un- or poorly-met by laptops and need more visual bandwidth than smartphones provide. As the functions mature, they become more app- versus web-oriented, Mr. Google. I think the iPad3 rumors point to a “good enough” device if TV comes together for it successfully. But some people’s mix of jobs-to-do (already have big-screen TV and are less mobile) and budget favors less expensive tablets, so there’ll be a two-tier business: just as the introduction of paperbacks vastly expanded the availability of reading by the general public a few decades ago. I see almost every American household owning one or more tablets, with lower penetration rates in other developed and emerging nations.

    Net-net the challenge seems to be production capacity for tablets; the DigiTimes rumors of supplier capacity makes this the possible limiting factor. If Apple can produce 50 million tablets a quarter, and others half as many, you could have the crossover about a year from now.

    • Chandra

      Walt, great post.  A lot of Apps there have to think along these matrix lines to see what cell they want to play in and what functions they want to provide for each cell. Apple’s job is to provide enabling technologies, device features ( new sensors like NFC for example ) and APIs. That trifecta ( Hardware, OS Software and Apps ) powers the jobs to be done for each cell.  In that sense this matrix is a meta-matrix.

      Question: In terms of  social networking and entertainment, are we already pretty much at a ‘good enough’ stage in the Personal-Mobile cell of the matrix for Device and OS features. (There will always be new innovations in Apps like Pinterest which in turn drives the device adoption)

      • Walt French

        I’m not the best expert on social. I love how twitter brings up topics but mostly pass on in-depth ideas to a few close friends. My Facebook page languishes.

        Caveats aside, I think there is a HUGE transition still to come in social. Mostly, this will be Facebook 3.0 but it’ll require hooks all the way down thru the OS into the network. See @martingeddes:disqus for telco examples, but I imagine we’ll develop more and better ways of interacting with our friends and business partners. 

        Ditto TV, where new distribution models will also require new models connecting shows with the right viewers. Netflix’s you-might-like model on steroids. Pricing, too: I think we may have reached Peak Ad, where the cost of your time exceeds the benefit to an advertiser so greatly that pay-for-content will rise.

        NFC is pretty obviously NOT about payments, but rather information capture. Per my ad comments, it will have to be very valuable to disrupt the current plastic system (which already has lots of stored-value cards with all the benefits of NFC). Either that, or it will rely on new competition against a very entrenched oligopoly, one that consumers have come to be fairly happy with, in a way that they are NOT with regards to telcos, cable cos, etc.

  • I wonder when the date would be if we changed the question to “installed base”. Probably not more than two years further out?

  • janeshepard

    Your second sentence may need a correction, as you cited Acer twice.

  • capnbob67

    Looks like Toshiba stopped making PCs 2 quarters ago… did I miss the memo? Also some funky Asus data. Other than that, still ploughing through the excellent comments (as ever). Does missing PC vendor data impact the overall assessment or is it fungible with “Other”?

    • The data shows top five PC makers as reported by Gartner. Toshiba fell out of that list and is now a part of “other”.

  • James Saldana

    I see tablets as additive to a point. They’ve already destroyed PC growth and it’s already running in the red. So in effect it’s expanded the PC market while stunting the growth of traditional PCs.

    As this continues I see tablets sales absorbing more and more PC sales. By 2013 we could see at least 1/3 to 1/2 of that tablet growth coming out of the PC market. Effectively pushing MS under 75% or much lower.

    We’ll lose 1 or 2 PC manufactures in the process of elimination.

    • To take your points a little further…

      To my mind, there are two types of tablet buyers: those who use the device to augment their PC work, and those who do not need a PC at all. That is, the tablet provides all the functionality they need.

      For the former, the market is expanded with new products. For the latter, the tablet will either be a new device, introducing them to the digital world for the first time, or a replacement device, effectively scaling back the PC market.

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  • yetanothersteve

    The market share those projections would give Apple is quite stunning. And yet I think your assumptions about W8 and tablets being additive are actually generous.

    For Apple, that’s a heck of a lot of iPads to build… essentially by hand we now know.

    • fpugsley

      I wonder if Foxconn & other Apple suppliers will adopt robotics and build new plants in other geographies by the end of 2013?

      • Chandra

         I think it makes sense. I hear that Foxconn has a base in India and elsewhere too. They can build up on it to build stuff for Apple

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  • bmldisp1001

    Agree with the observation that the specifics here may be a bit off, but the trend is very likely accurate.  I remember when everybody was criticizing the iPad because it wasn’t as full featured as a PC.  What was missed was that most people don’t NEED the full functionality of a PC all the time.  And it’s often overlooked that all that functionality comes with it’s own set of headaches, including security:

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  • Can you differentiate colors more? Red, green, and orange are repeated and it’s somewhat confusing. 

    • The legend and the data bars are stacked in the same order.

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  • One quantitative  assumption that  you make is the growth rate for Macs to continue at 25%. I believe this is a  big sleeper and the rate will increase significantly.

    While some of that will come from China, that growth will be balanced by lowering growth in the more mature USA and Western Europe consumer markets. However, what is not being factored in here is the growth in the enterprise which was recently reported at 40%. Now, since enterprise  was such a small percentage of overall Mac shipments, this growth did little to effect the overall growth. But, if it continues at 40% or higher while the consumer market is leveling, then it will eventually become a significant driver of the growth rate.

    I think that this year will be the year in which the Mac really turns the corner in the enterprise. I can see it eventually moving to 40% market share of desktop/laptop computers sold. That would be enormous. The Forrester research had some extremely telling points.

    • The 40% enterprise market share  (i.e. of new sales) I see coming in about 6 years in the US in 8-10 years world wide. The ramp up will be an S curve – gradual for the next two years then much more noticeable (maybe 7%, 12%, 18%, 26%, 34%, 40% share). There really is a sea change happening.

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  • Matt Ryall

    > Given these assumptions, the day when the tablet market (by units) will exceed that of traditional PCs will come sometime in the fall of 2013.

    I find it hard to read this on your chart above because you’ve put the Windows tablets between two desktop OSes: OS X and Windows. It would be easier to see if all the tablet OSes were adjacent.

    It will be interesting to see if the take-up on Windows tablets is anything close to 7% in the first quarter after they release. I think that’s where there’s the greatest margin of error in your model.

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  • AryuGaetu

    I am always very cautious about any tech industry predictions. Fundamentally, it’s an oxymoron. There are many events not outside the realm of possibility that could have a major impact:
     – OS X 10.8 can run iOS apps.
     – Creating iOS apps can be easy; think Automator + Keynote + iWeb.
     – OS 11 w/ Siri v2.0 on Mac and iPad; think Star Trek.
     – Your Mac’s screen and its access is mirrored wirelessly on your iPad via internet with a single tap.
     – Apple reinvents the server concept, decentralizing it; more grid, more shared computing, less hub, more secure, self healing.
     – Apple unifies/simplifies streaming video. User just asks for “Young Frankenstein” or “last Friday’s Tonight Show”, and doesn’t have to worry about the source. (When going back to your analog tv’s tuner seems like an improvement over current video search options, you know something must be done.)
     – Siri Online replaces Google; giving intelligent answers to normal sentences rather than archaic vague lists heavily skewed by sponsorship money.

    Any one of these, or a million other ideas unthought of, could easily alter the charts. Placing “statistics” and “technology” in the same article makes my brain crash faster than my friend’s HP playing a Flash video.

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  • Cant you do a Updated Analysis? is Fall 2013 still viable or could it be sooner?

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  • Immanuel Obodo

    Great work Horace! I believe people will truly be shocked as to how the iPad is going to explode in ’12 and ’13, and since there will be no meaningful Windows competition, as you point out, the market it there for Apple to take.

    Horace has already shown in mobile that with well over 50% of the market taken by iPhone and Android, there will be very little left for Microsoft/Nokia to take in ’12-’13 given current adoption rates for the various platforms.

    The big question is whether this is going to play out in the same way with tablets? Horace’s projection basically says that over the 3-4 years from ’10-’13, MS monopoly is going to disappear, with market share dropping from 95% to under 50%! That is what I call disruption – and it is Apple eating the pie! more update at