Thundering Herd Update

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    Posted: 15 June 2012 02:15 PM #181

    My overall impression is that Minyanville is a poor source. This one article today helps change that opinion…just a bit.

    IDC’s 1% Tablet Forecast Increase Masks a Huge Decrease in Expectations for Google Android

    When we take the new 2012 Google Android tablet market share forecast of 36.5% and multiply it by the new 107.4 million unit forecast for the market, we get 39.2 million units.

    That 39.2 million number is a whopping 16.4% decrease from the 46 million unit forecast from March 13.

    Likewise, IDC’s forecast for Apple iOS units has gone from 58 million units to 67.1 million units (62.5% X 107.4 million units = 67.1 million units)—a boost of 15.5%!

    I suspect that these numbers aren’t making the rounds because the mainstream media outlets didn’t bother to do the math.

    http://www.minyanville.com/sectors/technology/articles/aapl-goog-amzn-bks-ipad-tablet/6/15/2012/id/41765?camp=syndication&medium=portals&from=yahoo

    The author ends with some lines that make me wonder if he reads AFB.

    There is no tablet market.

    There is only an iPad market.

    Get the picture?

         
  • Posted: 15 June 2012 03:39 PM #182

    I’ve been looking at the IDC numbers. A couple of observations and an opinion:

    1) IDC has underestimated the number of tablets with every single estimate.

    2) IDC’s numbers DO NOT include the anticipated Window RT and Windows 8 tablets. IDC is going to add those tablets into their numbers starting next month.

    My conclusion is that overall tablet sales are growing much, much faster than IDC and others realize. Let’s take a look at the numbers. (Remember, these are shipments, not sales).

    2010: Apple introduced the iPad in April, 2010. Total shipments of all tablets: 19.5 million.

    2011: Apple had a full year of production as did most Android tablets. Amazon joined the party in the fourth quarter. Total shipments: 69.6 million.

    2012: The year isn’t over, but since IDC is making a mid-year course correction, we can reasonably assume that their end of the year numbers will be close to accurate, remembering, of course, that they are not counting in Windows tablets. Total shipments: 107.4 million.

    2016: Now let’s look at how many total tablets IDC expects all manufacturers to ship four years from the end of this year: Shipments: 222.1 million.

    Let’s look at those numbers again.

    - There were 19 million additional tablets sold in 2010.

    - There were 50.1 million (69.6 - 19.5) additional tablets sold in 2011

    - There will be 36.5 million (106.1 - 69.6) additional tablets sold in 2012. Based on IDC’s track record, the number will be much higher than that, but let’s go with it for now).

    For IDC’s projection of 222.1 million tablets shipped in 2016 to hold true, tablet shipments would have to increase by an average of only 29 million (222.1 - 106.1 / 4) additional tablets a year for 4 straight years. In other words, IDC expects tablet sales to slow, when all the evidence indicates that tablet sales are rapidly increasing.

    Just to put it into perspective, iPads have been growing at a 150% clip year over year for two straight years. But in 2016, IDC is projecting total tablet growth of less than 15% - admittedly from a much, much larger base -  for the entire industry!

    So what am I trying to say? I’m saying that people have no idea of the size of the tablet tsunami that is about to hit them. This is purely speculative, but tablets sales will probably exceed PC sales by 2015 or 2016. Maybe sooner if PC sales decline.

    And I believe that many of these sales will be additive. For example, there were approximately 50 million tablets and 400 million traditional PCs sold in 2011. Let’s say, for arguments sake, that there were 300 million tablets and 300 million traditional PC’s sold in 2015 or 16. That’s a loss of over 100 million traditional PC sales but its a total of 600 million units and an overall net gain of 150 million computing units.

    Never have there been 600 million personal computers sold in a year. Not only do I think it’s doable, I think it’s a mortal lock. I think we’re on the verge of a whole new era in computing. Most of the uses for tablets haven’t even been discovered yet.

         
  • Posted: 15 June 2012 04:02 PM #183

    FalKirk - 15 June 2012 06:39 PM

    I’ve been looking at the IDC numbers. A couple of observations and an opinion:

    1) IDC has underestimated the number of tablets with every single estimate.

    2) IDC’s numbers DO NOT include the anticipated Window RT and Windows 8 tablets. IDC is going to add those tablets into their numbers starting next month.

    My conclusion is that overall tablet sales are growing much, much faster than IDC and others realize. Let’s take a look at the numbers. (Remember, these are shipments, not sales).

    2010: Apple introduced the iPad in April, 2010. Total shipments of all tablets: 19.5 million.

    2011: Apple had a full year of production as did most Android tablets. Amazon joined the party in the fourth quarter. Total shipments: 69.6 million.

    2012: The year isn’t over, but since IDC is making a mid-year course correction, we can reasonably assume that their end of the year numbers will be close to accurate, remembering, of course, that they are not counting in Windows tablets. Total shipments: 107.4 million.

    2016: Now let’s look at how many total tablets IDC expects all manufacturers to ship four years from the end of this year: Shipments: 222.1 million.

    Let’s look at those numbers again.

    - There were 19 million additional tablets sold in 2010.

    - There were 50.1 million (69.6 - 19.5) additional tablets sold in 2011

    - There will be 36.5 million (106.1 - 69.6) additional tablets sold in 2012. Based on IDC’s track record, the number will be much higher than that, but let’s go with it for now).

    For IDC’s projection of 222.1 million tablets shipped in 2016 to hold true, tablet shipments would have to increase by an average of only 29 million (222.1 - 106.1 / 4) additional tablets a year for 4 straight years. In other words, IDC expects tablet sales to slow, when all the evidence indicates that tablet sales are rapidly increasing.

    Just to put it into perspective, iPads have been growing at a 150% clip year over year for two straight years. But in 2016, IDC is projecting total tablet growth of less than 15% - admittedly from a much, much larger base -  for the entire industry!

    So what am I trying to say? I’m saying that people have no idea of the size of the tablet tsunami that is about to hit them. This is purely speculative, but tablets sales will probably exceed PC sales by 2015 or 2016. Maybe sooner if PC sales decline.

    And I believe that many of these sales will be additive. For example, there were approximately 50 million tablets and 400 million traditional PCs sold in 2011. Let’s say, for arguments sake, that there were 300 million tablets and 300 million traditional PC’s sold in 2015 or 16. That’s a loss of over 100 million traditional PC sales but its a total of 600 million units and an overall net gain of 150 million computing units.

    Never have there been 600 million personal computers sold in a year. Not only do I think it’s doable, I think it’s a mortal lock. I think we’re on the verge of a whole new era in computing. Most of the uses for tablets haven’t even been discovered yet.

    And then remind yourself what this means for Apple. Its “computer” market share will go from single digits in 2009 to >50% in six short years.

         
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    Posted: 15 June 2012 04:19 PM #184

    Another Zune or Xbox?

    On Monday, Microsoft is expected to introduce a tablet computer of its own design that runs a new version of its Windows operating system, the first time in the company?s 37-year-old history…For Microsoft, making a tablet is an especially risky venture because of the enormous profits the PC business produces for Microsoft…Its plans could erode the commitment the company?s hardware partners have to Windows since it will effectively be competing with them for sales.

    http://www.nytimes.com/2012/06/16/technology/microsoft-expected-to-introduce-tablet.html?partner=yahoofinance

    Paul Thurrott chimes in.

    No one really knows what Microsoft is going to announce Monday, at least not yet. I can tell you that reports about this being a Windows RT event are wrong, based on multiple categorical denials I?ve seen. But there are some good theories. I like the idea of a Microsoft, Xbox-branded tablet. (Which, actually, would probably be Windows RT-based.) Or a Barnes & Noble eBook reader (which, yes, would also be Windows RT based).

    http://www.winsupersite.com/article/paul-thurrotts-wininfo/wininfo-short-takes-june-15-2012-143450

         
  • Posted: 15 June 2012 04:22 PM #185

    Drew Bear - 15 June 2012 07:19 PM

    Another Zune or Xbox?

    That presupposes that the Xbox is a “profitable” hit. How much did Microsoft throw at the Xbox project? I can think of at least two 1 Billion dollar payouts over the years.

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  • Posted: 15 June 2012 04:45 PM #186

    .... - 15 June 2012 07:22 PM
    Drew Bear - 15 June 2012 07:19 PM

    Another Zune or Xbox?

    That presupposes that the Xbox is a “profitable” hit. How much did Microsoft throw at the Xbox project? I can think of at least two 1 Billion dollar payouts over the years.

    It is generous to describe the Xbox as a “hit.”

    The hardware had a high failure rate, and I suspect the margins are quite low in this hotly contested market. 

    Mr. Softie has a very poor record with its hardware efforts.  I am skeptical this time with both the hardware and the software.

         
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    Posted: 15 June 2012 04:59 PM #187

    .... - 15 June 2012 07:22 PM
    Drew Bear - 15 June 2012 07:19 PM

    Another Zune or Xbox?

    That presupposes that the Xbox is a “profitable” hit. How much did Microsoft throw at the Xbox project? I can think of at least two 1 Billion dollar payouts over the years.

    I totally agree! I doubt Microsoft has yet dug out of the Xbox money pit. I guess I didn’t make it clear that either way Microsoft is not likely to fare well out of this rumored venture into another hardware product.

    Zune = death
    Xbox = years of heavy losses before marginal profits

    Not completely pertinent to this thread, but Microsoft really loves to throw away money. How many billions have they dumped into Bing and Skype? Now another rumored billion or so for Yammer?

    Edit: Jay Yarow at Biz Insider reminds me about another spectacular Microsoft hardware product: The Kin.

    [ Edited: 15 June 2012 05:15 PM by Drew Bear ]      
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    Posted: 15 June 2012 05:50 PM #188

    Drew Bear - 15 June 2012 07:19 PM

    Paul Thurrott chimes in.

    No one really knows what Microsoft is going to announce Monday, at least not yet. I can tell you that reports about this being a Windows RT event are wrong, based on multiple categorical denials I?ve seen.

    On one of his podcasts Thurrott says that he doesn’t think this will be a big deal. The invitation was sent to literally everyone in the press. It was sent on short notice. He’s already booked to go to So.Cal. for a Windows Phone event on Tuesday, so is not going to change his travel plans for this event.

    What’s funny is that Microsoft is getting pretty good press for this because it’s a bit like what Apple does with their iPhone and iPad events. The problem is that if they do not deliver something Apple-esque on Monday, the press will not trust them the next time they try this ploy.

         
  • Posted: 15 June 2012 06:23 PM #189

    adamthompson32 - 15 June 2012 07:02 PM

    And then remind yourself what this means for Apple. Its “computer” market share will go from single digits in 2009 to >50% in six short years.

    Right. Astonishing. Industry changing.

         
  • Posted: 15 June 2012 06:29 PM #190

    .... - 15 June 2012 07:22 PM
    Drew Bear - 15 June 2012 07:19 PM

    Another Zune or Xbox?

    That presupposes that the Xbox is a “profitable” hit. How much did Microsoft throw at the Xbox project? I can think of at least two 1 Billion dollar payouts over the years.

    Don’t denigrate the X-Box. Project Glass shows that Microsoft has big plans for the X-Box, which is a recognized and respected brand located in far more living rooms that the Apple TV is.

    However, the next X-box won’t be out until 2013. So that’s not it.

    I’m wondering if the announcement on Monday will be one of those “pre-announcments” where Microsoft doesn’t show anything but simply tells us what they’re going to show us. If it had anything to do with hardware, something would have leaked long ago.

         
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    Posted: 15 June 2012 06:55 PM #191

    Technically it’s Xbox (360). wink

    If you’re gonna have an Input 2 or whatever it’s called, it better be cheap, easy-to-use and setup, and work very well with popular devices such as iPod touches, iPhones, iPads and Macs (one example:  Apple TV).  Otherwise you will be selling to demographics increasingly disinterested in the traditional console experience.

    If you develop an Input 1 that also works astonishingly well with popular devices, such iPod touches, iPhones, iPads and Macs…well…console makers and TV manufacturers alike hope that day never arrives.

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    Posted: 15 June 2012 06:56 PM #192

    FalKirk - 15 June 2012 09:29 PM

    Don’t denigrate the X-Box. Project Glass shows that Microsoft has big plans for the X-Box, which is a recognized and respected brand located in far more living rooms that the Apple TV is.

    I’m not sure that Microsoft’s “success” with the Xbox will help them with their tablet. It hasn’t helped them with their phones.

    Apple hasn’t brought everything together yet, but you can begin to see everything starting to line up: iPhone, iPad, Mac, AppleTV, Siri, AirPlay, iCloud? most of the pieces are already there. Once everything gels together, Apple’s presence in the living room could be very quickly in the hundreds of millions.

         
  • Posted: 15 June 2012 07:54 PM #193

    Drew Bear - 15 June 2012 09:56 PM
    FalKirk - 15 June 2012 09:29 PM

    Don’t denigrate the X-Box. Project Glass shows that Microsoft has big plans for the X-Box, which is a recognized and respected brand located in far more living rooms that the Apple TV is.

    I’m not sure that Microsoft’s “success” with the Xbox will help them with their tablet. It hasn’t helped them with their phones..

    I don’t think I ever suggested that it would.

    And I agree with everyone else who has posted that Xbox was not nearly the financial success that most assume it is.

    However, the Xbox is ubiquitous and its clear that Microsoft is pouring resources into making it the hub of their home strategy. I have zero idea where Microsoft is headed but I think they have very big plans for the next iteration of the Xbox.

         
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    Posted: 15 June 2012 08:14 PM #194

    I’m on my 3rd Xbox 360.  1st red ring of death, 2nd DVD drive.  It is getting close, but the fan noise means its a bit loud.  Xbox live is best of class.  We have about every game console known and the only one with consistent everyday play is the Xbox 360.  Microsoft got a lot right with the interface, but hardware is not one of them.  we go through machines, headsets, controllers, batteries.  What keeps you coming back is the game play.  For gamers this is a gaming machine, does it get used for video and such like the ATV, sure saves buying another box, but it is definitely a input 2 device and makes too much noise for my livingroom, but works great in the gameroom?

         
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    Posted: 15 June 2012 08:27 PM #195

    Wall Street Journal jumps on the rumor bandwagon. They have nothing new to add to the original rumor. This is interesting because Google I/O arrives the week after with the rumored Google Nexus tablet.

    Microsoft Plans Its Own Tablet

    http://online.wsj.com/article/SB10001424052702303410404577468910054141438.html