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Development Trends of the Worldwide PC System Industry Market Intelligence & Consulting Institute (MIC) Institute for Information Industry Coverage of PC Systems
Desktop Notebook Tablet
Convertible NB Detachable Tablet
1 Contents
Global Market Trends Product Development Trends Highlighted Topics Conclusion
2 Global PC System Market Volume, 2014-2019
600,000 Thousand Units Growth 100%
500,000 80%
400,000 60%
300,000 40%
200,000 20%
100,000 0%
0 -20% 2014 2015(e) 2016(f) 2017(f) 2018(f) 2019(f) Tablet Vol 242,140 214,258 190,138 180,631 175,212 176,964 DT Vol 131,976 120,110 119,450 118,772 117,530 115,374 NB Vol 172,130 167,482 166,310 165,645 165,976 166,806 NB GR(%) -0.3% -2.7% -0.7% -0.4% 0.2% 0.5% DT GR(%) 4.0% -9.0% -0.5% -0.6% -1.0% -1.8% Tablet GR(%) 1.3% -11.5% -11.3% -5.0% -3.0% 1.0% Source: MIC, July 2015 Note 1: GR is Year-on-Year Growth Rate Note 2: AIO PCs were consolidated into DT PC market volume The recently ended replacement demand for commercial models, Microsoft’s unclear subsidy policy for Windows notebook PCs, and the deferred launch of Intel’s new platform all have contributed to a huge slump in global PC demand; the global tablet market has been shrinking as well, due largely in part to cannibalization of large screened smartphones, also known as phablets
3 Industry Concentration Further Intensified Due to Changing Growth Drivers
Notebook PC Market Volume Share by Desktop PC Market Volume Share by Branded Vendors, 2012-2015 Branded Vendors, 2012-2015 20% 20%
16% 15%
12% 10%
8%
5% 4% HP Lenovo Dell Acer ASUS Apple Toshiba Samsung 0% HP Acer Dell Lenovo Apple 2012 2013 2014 2015(e) 0% 2012 2013 2014 2015(e) Source: MIC, July 2015 With second-tier notebook PCs fading out and the continued low-priced trend of notebook PCs, market share of first-tier notebook PCs continues on the rise; the industry concentration of desktop PCs is expected to be further intensified owing to the increasing share of commercial desktop PCs and first-tier brands’ continued attention into emerging market developments 4 Windows PC Share Falls Below 90%
Global PC Shipment Volume Share by Operating Global Desktop PC Shipment Share by Operating System, 2012-2015 System, 2015
100% Others Mac 29.8% 80% 4.0% Windows 60% 64.0% Chrome 40% 0.10% Android 2.1% 20% Global Notebook PC Shipment Share by Operating 0% 2012 2013 2014 2015(e) System, 2015 Others 30.1% 30.9% 29.4% 28.2% Mac 5.8% 5.7% 6.5% 7.0% Others, 26.9% Chrome 0.1% 0.9% 2.1% 3.2% Windows, Android 0.0% 0.2% 0.7% 0.9% 58.2% Windows 64.0% 62.2% 61.3% 60.7% Mac, 9.3%
Source: MIC, July 2015 Chrome, Android, 5.5% Note: Tablets were excluded here 0.0% Owing to increasing sales of Chromebooks and Macbooks, the room of Windows OS has been significantly squeezed; the launch of Microsoft Windows 10 however is expected to only have a limited contribution to PC market share, given the fact that the latest commercial replacement just ended and Microsoft would offer free upgrades to Windows 10 5
Mobile Computing Market Starts to Witness Year-on-Year Decline in 2015 Global Mobile Computing Market Volume, 2012 - 2019 600,000 Thousand Units Growth 100% 90% 500,000 80% 70% 400,000 60% 50% 300,000 40% 30% 200,000 20% 100,000 10% 0% 0 -10% 2012 2013 2014 2015(e) 2016(f) 2017(f) 2018(f) 2019(f) Mobile Computing Device 333,240 411,532 414,270 381,740 356,448 346,276 341,188 343,770 Tablet Vol 140,884 238,930 242,140 214,258 190,138 180,631 175,212 176,964 NB Vol 192,356 172,602 172,130 167,482 166,310 165,645 165,976 166,806 Mobile Computing Device GR 92.0% 23.7% -0.3% -2.7% -0.7% -0.4% 0.2% 0.5% NB GR 24.0% -10.3% 1.3% -11.5% -11.3% -5.0% -3.0% 1.0% Tablet GR -1.6% 69.6% 0.7% -7.9% -6.6% -2.9% -1.5% 0.8% Tablet/Mobile Computing Device 42.3% 58.1% 58.4% 56.1% 53.3% 52.2% 51.4% 51.5% Source: MIC, July 2015 Strong sales of 7” low priced models led to significant tablet market growth over the past 2 years; the tablet market has been losing steam since 2014, affected mainly by phablets and low-priced notebook PCs
6 White-box Tablet Begins to Lose Momentum
Tablet Market Share by Branded Vendors, Tablet Market Share by Operating System, 2012-2015 2012-2015 Apple Samsung Amazon 80% Windows Android Chrome 50% Google ASUS Acer 70% iOS Others White Box
40% 60%
50% 30% 40%
20% 30% 20% 10% 10%
0% 0% 2012 2013 2014 2015(e) 2012 2013 2014 2015(e) Source: MIC, July 2015 Almost two-thirds of tablets embrace Android OS and the widespread use of reference designs have led to a high level of homogeneity and limited differentiation among tablets; the tablet market thus has inevitably fallen into a vicious cycle of price competition Growing popularity of phablets has significantly eaten into the market of 7” tablets and slowed growth momentum of white-box vendors, thereby reshuffling their market positions 7 Contents
Global Market Trends Product Development Trends Highlighted Topics Conclusion
8 New Product Line to Bring Added-value to Notebook PCs NB Product Line Pricing Distribution Price • Hinge Up • Slim Panel Slim Gaming/ • Hinge Up New Workstation • Battery Macbook Macbook Air Ultrabook • Mac OS & Core Slim • Thermal Design
Slim, 2-in-1/ Slim Retina Convertible
Detachable/C • Hinge Design onvertible • Marketing
Netbook Chrome OS Chromebook
Source: MIC, July 2015 Efficiency With the notebook PC market declining, to prevent from falling into the price competition that erodes profits, notebook PC vendors have started to increase new products lines featuring slim and lightweight form factor, HD, cloud-based applications; for instance, Chrome OS leverages cloud computing to cut down hardware costs while maintaining product efficiency 9 Gaming NB Brands Face Fierce Competition
Gaming NB Mainstream New Expansion of Competitors Gaming NB Brands
High End
Mainstream
To ensure the sustainability of gaming PC business, HP and Acer both launched sub- brand for PC gaming for the sake of marketing Established gaming brands MSI and Gigabyte have capitalized on their product specialization to go high-end and mainstream 10 Branded Vendors Have Different Deployment Strategies for Gaming PC
Starting Price (US$)
$4,499.99
$1,599.99 $1,499.99 Acer $849.99 Dell $699.99 Lenovo $599.99 HP $499.99 Console Desktop Tower Form Factor Note: HP embraces only one model but consumers are allowed to select technical specs required online Source: Respective companies, compiled by MIC, July 2015 In the desktop PC market segment, gaming PC is the area still enjoying positive growth; SFF PC, Media Center PC and AIO PC are hitting growth ceilings Vendors have different deployment strategies for gaming PCs: Dell focuses on comprehensive deployment, HP on highlighted deployment; Acer on concentrated deployment; L on both entry-level and high-end deployment 11 Small Form Factor Desktop PCs Looks to Catch Coming Wave of IoT
Acre Revo One Asrock Beebox ASUS ROG G20 A world of entertainment in a The world’s first Intel The World’s most powerful mini PC. NUC Mini PC with a compact desktop USB Type-C Port.
In 2014, Intel launched NUC (Next Unit of Computing) platform, thereby driving the development of small form factor desktop PCs with weight less than 1kg; the enhanced efficiency of mobile key components and improved heat dissipation technology also help minimize the volume of gaming PCs
12 2-in-1 Form Factor to Jump-start Consumer Demand for Tablets 2-in-1 Tablet Shipment Volume, Thousand Units 2-in-1 Tablet Market Share by Branded 2013-2015 Vendors, 2015 15,000 8%
6% 26.6% 10,000 35.2%
4%
5,000 2% 6.7% 24.3% 7.1% 0 0% 2013 2014 2015(e) WW Tablet 238,930 242,140 214,258 ASUS Microsoft Acer HP Others 2-in-1 1,725 8,027 13,045 Source: MIC, July 2015 2-in-1/Tablet 0.7% 3.3% 6.1% Note: 2-in-1 tablets were consolidated into total tablet market volume To avoid stiff price competition, several branded vendors have actively developed 2-in-1 tablets in 2015; among them, Microsoft and ASUS are the most outstanding players; MIC estimates the 2-in-1 tablet market will grow 62.5% in 2015 compared to 2014
13 Contents
Global Market Trends Product Development Trends Highlighted Topics Conclusion
14 Windows 10 Comes in 6 Editions to Cater More Consumer Needs Windows 10 and Licensing Types Different UI Windows Hello Windows 10 Desktop Edition High End
Windows Education Licensing fee Licensing In-Place Windows Enterprise Mainstream Upgrade Windows Pro
Continuum Cortana Low End
Windows Home • Size
• CPU Universal Apps • Memory • Storage Source: MIC, July 2015 • Market
During the development of Windows 10, Microsoft obtained user feedbacks from its Insider Program to ensure that it caters more to user needs with improved UI and application designs in the consumer market; additionally, Microsoft has been increasing the levels of safety and installation convenience for its Windows 10 users in the commercial market Other than the availability of Windows 10 Education, Microsoft has also cut down licensing fees to help its partners reduce hardware prices such that their products are price competitive compared to other Chromebook-like products 15 Chrome OS Applications Aim for Market Expansion
Chromebook Shipment Volume, 2012-2015 Chrome OS Partners
10,000 Thousand Units 6% Hardware
8,000 5% 4% Virtual 6,000 Platform 3% 4,000 2%
2,000 1% Applications
0 0% 2012 2013 2014 2015 Channels/ Volume 420 2,760 6,330 9,230 Markets NB Ratio 0.2% 1.6% 3.7% 5.5%
Source: MIC, July 2015 Europe and the United States have been introducing notebook PCs for the purpose of K-12 education, thereby benefiting Chromebooks that are often priced lower and are able to provide cloud-based applications To exploit opportunities in the commercial market, Google has actively cooperating with hardware makers and channel distributors in the hope of capitalizing its cloud-based applications to capture more traction in this area 16 Processor Battlefield Shifting to Chrome OS Products
Tablet Notebook Desktop
High High End
Middle Middle End
Low Low End
Source: respective companies, compiled by MIC, July 2015 Affected by the declining tablet market demand, Chrome OS products have become a new battlefield for ARM processors 17 Low-power Core M Processors Getting Slimmer and Lighter
Tablet Detachable Convertible Ultra-slim Clamshell
Cherry Trail Braswell Broadwell Y Broadwell U Broadwell H
Atom Celeron/Pentium Core M Core i3/i5/i7
Type Ultra-slim with Core M Efficiency Comparison of Intel’s Processors Brand Apple Lenovo Asus GFLOPS Model New Macbook Yoga 3 11 Zenbook UX305
CPU Core M-5Y31 Core M 5Y10c Core M 5Y10 Iris 6000 Display 12.0” Retina 11.6” FHD 13.3” FHD/QHD+ HD 6000 Thickness 13.1mm 15.7mm 12.3mm HD 5500 HD 4400 Weight 920g 1.2kg 1.18kg Price US$1,299 US$699 US$700~1,000 Source: MIC, July 2015 Intel launched a series of Core M processors, codenamed Broadwell, which is designed to continue Y- series processors’ low power consumption advantage and to better 2-in-1 NB/tablet market positioning and marketing strategies With the improved efficiency provided by Intel’s built-in processors, Intel is able to boost low-powered BroadwellＹprocessor to provide basic efficiencies 18 Valve Continues on Gaming Ecosystem Expansion
Developer Tools ＆OS Brand Alienware Gigabyte Asus Source Engine 2 SteamOS Snap- shot
Model Steam Machine BRIX Pro ROG GR8S
App Store & UGC Platforms Core i3~ CPU Core i7-4770R Core i5/i7 Core i7 Steam Gaming Steam Workshop Iris Pro graphics GPU GTX 2GB GeFroce 9 series 5200 500GB/1TB 500GB~2TB Mechanical Storage 1 x 6Gbps Mechanical Type Entertainment Devices Device SATA3 Type 128GB ~ Steam Machine Steam Controller 512GB SSD
Price USD 479.99~ USD 599.99 USD 699.99~ Steam Link SteamVR With built-in Steam OS, Steam Machine is able to help Valve become more independent from Microsoft’s Windows and provide more flexible Source: Valve, compiled by MIC, July 2015 hardware specs 19 Taiwanese PC System Industry’s Global Share Taiwanese PC System Industry’s Global Share, Global Share of Operating Systems Adopted 2012-2015 by Taiwanese PC Systems, 2012-2015
Source: MIC, July 2015
The increasing in-house manufacturing ratio of Chinese makers has continued to narrow the room of development for Taiwanese companies; on the rise of emerging market demands, Chinese companies have increased the production share of local suppliers or EMS, thereby constraining the development of Taiwanese players 20 While PC System Market Share Sliding, Revenue Share on the Rise PC Products’ Revenue Share of Established PC Vendors 100% and ODM Makers Intel Network Comm. 80% Acer Product
Lenovo Consumer 60% Electronic Microsoft Product
Asus 40% IoT Product TW ODM
20% HP
Apple Others (eg Solar） 0% 2012 2013 2014 Source: MIC, July 2015 When it comes to revenue share of individual products, PC products’ share of established brands and ODM makers is decreasing and they have been turning to network communications, consumer electronics and IoT applications instead
21 Wearables Remain the Most Popular IoT Applications in the Short Run Global Smart Wearable Market Volume, 2013-2019 Smart Watch/Wristband Types
250 Million Units 2013~2019 CAGR 62.4% 231.9 160% Smart Smart Watch 200 192.9 Wristband 120% 154.5 150 Accessory Integrated 114.2 80% 100 74.9 Standalone Detachable 40% 50 31.5 12.7 0 0% 2013 2014 2015 (e) 2016 (f) 2017 (f) 2018(f) 2019(f) Volume Growth Rate
Source: MIC, July 2015 RTOS
Despite the proliferation of smart wearables, without clear product and market positioning, the development of wearables is still at the infancy stage; due to low entry barriers and price tags, smart wristbands and watches are expected to continue claiming the largest share of IoT applications in the short run
22 IoT Applications Put Vendors’ Manufacturing Flexibility to the Test Smart Wristband Shipment Volume by Smart Watch Shipment Volume Branded Vendors, 2014 by Branded Vendors, 2014 Thousand Units Thousand Units 8,000 4,000 (4)
6,000
4,000 2,000 (2) (4) (4) 2,000 (4) (1) (2) (1) (2) (1) (2) - - Fitbit Garmin Xiaomi Nike Sony Samsung Others Samsung Garmin Pebble Sony Casio Others Source: MIC, July 2015 Note: Figures included in the bracket indicates the number of models currently available IoT has become the future of the ICT industry; however as hardware specs remain one of critical success factors for companies developing IoT, the establishment of a new business model should be highlighted as it is expected to add value to the ICT industry Taiwanese ICT vendors have been long dedicated to contract manufacturing services; however, affected by the availability of new technology, vendors focus more on strengthening their system integration and flexible manufacturing capabilities instead 23 Contents
Global Market Trends Product Development Trends Highlighted Topics Conclusion
24 Conclusion Following the recently ended replacement of commercial models, global PC market is expected to witness another setback; coupled with a higher baseline in 2014, notebook PCs and desktop PCs have both witnessed significant declines in 2015 Affected by the increasing number of homogeneous products and prevalence of phablets, the global tablet market has started to witness decline in 2015; with various home appliances brands aggressively stepping into the development of large-sized 2-in-1 tablets, MIC predicts that 2-in-1 tablets will grow considerably in 2015 compared to 2014 To take Chrome OS seriously, Microsoft has set a different pricing strategy for its Windows OS; with the tablet market declining, ARM has been gearing up its adoption in products running Chrome OS; in the gaming sector, Steam Machine allows gaming PC development to be more flexible Taiwanese contract manufacturers, though dominating the PC industry for years, need to strengthen their system integration and flexible manufacturing capabilities to produce more specialty products in small volume in the IoT era
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