everyone loves a tablet, just not in the way you expect deck

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

North American Tablet Survey Webinar

Jan. 24, 2013

TBR

January 2013 | Webinar – North American Tablet Study ©2013 Technology Business Research Inc.2

Presenter

Ezra Gottheil

[email protected]

@egottheil

Senior Analyst, Computing and Storage

PCs Tablets Social Media

TBR


Contents

• Introduction• Multi-device landscape• New devices• Tablet study

• Overview• Emerging Trends• Purchase Drivers• Platform Strengths and Weaknesses• Small Tablets

TBR


Mobile devices drive growth in eyeball-hours, but rapidly change the device and platform mix

Introduction

Mobility increases use of devices, networks, and data, but shifts some of the use away from established systems and platforms toward new ones.

TBR


PCs are mature, smartphones are maturing, tablets are exploding, and smart TVs are just getting started

Overview

• Tablet are cannibalizing users’ secondary PCs; all tablet owners also own PCs

• The PC lifecycle is growing, in part because of device maturity and in part because of mobile devices substituting for PCs for some tasks

• The extending lifecycle is offsetting global economic growth, resulting in flat PC sales

• The rapidly declining entry price for capable tablets is driving accelerating adoption

• While smartphone adoption in mature economies is passing 50%, rapid device evolution and data plan subscriptions keeps the refresh cycle short, driving immense sales

• The Android platform has enjoyed explosive growth, but has not yet become as sticky as competing platforms, because investments in software and content are limited

TBR


Each vendor’s territory has a unique culture and approach which will shape the future of the devices world

Apple will retain and grow its base, but will continue to lose share as competitors grow

Google is driving expansion at the low-end of the mobile market, but is most vulnerable to competition. It will continue to profit from competitors’ platforms, however

Amazon will build its base of lower-priced tablets in its geographically limited content markets, impinging on Google’s growth in those areas

Microsoft will bring a business-centric, content creation approach to mobile devices, but face challenges in its core PC landscape

Overview

TBR

©2012 Technology Business Research Inc.

Device Ecosystems are at the beginning of their evolution

Like living organisms, devices fill niches - or usage models - and when they no longer can live in those niches, they evolve or they die

TEXT

Content

AppsSmart TV

Tablet

Phone

PC

7

School

Work

Home

SettingsCreate need

Customer Usage Models: Work, home, school all drive uniqe

needs and therefore shape device use

Data, Content: Devices are the conduits to users’ key data and

content

Devices: Devices provide access; people

spend most of their waking hours interacting

with at least one of them

WorkData

Overview

TBR


Windows 8 will act as a catalyst for competing tablet vendors to catch up to Apple by creating a new tablet category: general purpose

+

Pre-Windows 8 Post-Windows 8

Usage Model

Data, media, and content consumption by consumers and business users, alike; data entry primarily used in messaging and email

Similar content consumption as Pre-Windows 8 tablets, but with the addition of content creation activities, including integration with key productivity apps and tasks, such as Microsoft Office

New Devices

TBR


Apple has the parts for a device in this category – a lighter weight OS with productivity software, and devices close to this form factor. The company is still challenged in keyboard devices because of the high entry price of Macs, as well as their complexity. A detachable iPad keyboard with a touchpad and small enhancements of iOS would give Apple a strong entry. Company culture will slow progress in this direction, however.

Google and Samsung repositioned the Chromebook as a PC companion instead of a PC substitute, aimed at consumers instead of businesses. Acer introduced its Chromebook positioned as “no-hassle computing.” TBR believes this is a viable category, and perfect positioning. These devices directly address the primary uses of both PCs and tablets in the consumer market – email and the Web, without the keyboard limitations of tablets or the complexity of PCs.

Windows RT devices, including the Surface RT, have similar characteristics, albeit at higher price points. TBR believes RT’s current positioning is unclear, and that too-close association with Windows undermines the potential power of the “no-hassle” message. High compatibility and data portability are major virtues, however, especially in the student market.

New Chromebook Position

Windows RT potential

And iOS based keyboard device would solve problems for Apple

Windows RT and Chromebook are the first devices in a new category: keyboard-based lightweight mobile devices

New Devices

TBR

©2012 Technology Business Research Inc.10 January 2013 | Webinar – North American Tablet Study

TBR collected insights from a wide range of consumer tablet owners and those who intend to purchase

Survey Overview

Total: n=800 surveys

Owners n=600

Amazon Kindle

Fire n=100

Apple iPad

n=250

Others (Acer, ASUS, etc.)

n=250

Work users n=200

Intenders n=200

TBR began survey collection on June 25, 2012

Study Objectives:• Provide insights on the top consumer

decision drivers for tablets. Measure customers’ requirements for device brands and features, including operating systems, hardware design, connectivity, file compatibility, productivity and usage models.

TBR


Owners love the ease of use, power and portability of their tablets and so choose to live with limitations in keyboards, software and compatibility

Executive Summary

Portability

Ease of UseApps

Instant-on

Screen

ProductivityCompatibility

“I would rather have a regular keyboard instead of the touchscreen but I don't want to carry around a separate keyboard.”

“Pricey, but efficient and useful.”

“The overall look and feel is better than I expected it to be.”

“Small, good for accessing email and the Internet. I like the apps, and it is good for reading books.”

TBR Assessment• Overall, customers report satisfaction

with the portability, simplicity and styling of their tablet devices, which make for easy travel, Web browsing, email and using apps.

• Dissatisfaction arises from the trade-offs involved in using a portable device over traditional PC form factors to which customers are accustomed. Touch screen keyboards, which are smaller than traditional PC keyboards and lack tactile feedback, lack of USB ports and limited productivity software are all cited as limitations to the form factor.

• Regardless of how much a consumer paid for their tablet, they generally believe the price could improve.

Keyboard

Price

Look & Feel

Battery

“There is a lot I like, the weight is great … I do need more software functionality.”

Customers praise tablets’ convenience and style; others want more functionality

TBR


Purchase intenders’ expectations of tablet usage reveal a void in current tablets’ productivity offerings

Executive Summary

The tablet productivity toolbox is a key differentiation opportunity for Windows 8

TBR Assessment• TBR research shows that consumers who intend to

buy a tablet expect they will use the devices for many productivity tasks but the response from survey participants shows that most tablet owners are unable to do so. This is largely a result of the limitations of operating systems and form factors of tablets currently in the marketplace.

• The discrepancy between expectations and reality signals a large revenue opportunity for Microsoft to provide a tablet and interface that can achieve tasks consumers still rely largely on PCs to accomplish.

• TBR expects improvements in tablet productivity to be particularly impactful for students and professionals. Among survey respondents, the number of intenders who planned to use their tablet for creating and modifying documents was 12% greater than owners’ actual usage. Similar findings exist for text and video communication and calendar management.

Create and view documents, presentations and spreadsheets

Manage calendar

Communication: Skype, text, IM

Take notes

TBR


While more than 60% of respondents intending to buy a tablet are considering Apple’s iPad, 32% of respondents are considering either Amazon’s Kindle Fire or Samsung’s Galaxy Tab. Of intenders, 56% expect to pay $400 or less for a tablet.

Virtually all respondents owned PCs and most owned smartphones. The tablet, serving as a third device, is favored by a majority for content consumption. Only 19% regarded tablets as their primary device compared to 44% of respondents in TBR’s 2010 iPad survey.

Tablets are firmly ensconced as companions to PCs

Amazon and Samsung are Apple’s closest competitors (before Nexus was announced)

Across all brands and price bands, tablet owners report very high satisfaction with their devices, primarily driven by ease of use and performance. Lower ratings for the keyboard and compatibility did not, according to survey respondents, negatively affect overall satisfaction.

Consumers are happy with tablets as content-consumption devices

Tablet buyers are more familiar with the capabilities of the devices, resulting in higher satisfaction despite perceived device limitations

Executive Summary

TBR


Of intended purchasers, 63% plan to buy their tablet at a brick-and-mortar store. We believe this reflects the personal nature of tablets and underscores the need of the customer to handle the devices. Many survey respondents visited stores before buying online.

Owners and prospective buyers indicated only moderate interest in bundled content and discounts on peripherals and services. The most popular items were cases, keyboards, warranties, insurance and productivity tools.

Most BYOD tablets are used for the same activities as at home — email and Web

Content, accessory and service bundles are moderately attractive to tablet purchasers

Prospective buyers prefer to try the product before they buy

Three-quarters of tablets purchased by users but used at work were used for email and Web viewing — but were neither subsidized by employers nor supported by them. Subsidized tablets were more likely to be used for productivity and company applications.

Tablets have been adopted as personal devices specifically assigned to common, frequently-performed tasks

Executive Summary

TBR


iPad owners are very happy with their devices but some want a keyboard, Flash, USB and productivity software — and everyone wants it cheaper

Tablet Brands

Surveyed iPad owners weigh in on the tablet’s design and abilities

“Great product … found more uses for it than I ever imagined.”

“The iPad was even better than I thought it was going to be. It’s portable, intuitive, fast and has had no issues.”

“I really love how you can expand the size of a picture or article to see and read it better ... great detail!”

“I am not a tech savvy person, but have been able to use the iPad with little problem.”

“Wish Apple would fix the problem of being unable to download Adobe flash player. Major stumbling block toward accessing a good bit of www content.”

“I think a longer [lasting] battery isn't really too much to ask for that price.”

“It needs a USB port and actual word processing and editing software to make it truly be able to replace a PC or some Android-based tablets.”

TBR Assessment

Although iPad owners are typically highly satisfied by the tablet, survey respondents identified weaknesses such as software compatibility and connectivity issues.

iPad Strengths

• Screen/clarity• Simplicity• Large app store• Portability• Replaces PC for entertainment

iPad Weaknesses

• No flash compatibility• Lack of USB ports• Needs productivity software• Keyboard• Battery life

TBR


“Features could be better, but for the money they are great.” — Amazon Kindle Fire customer

High overall satisfaction scores show tablet owners are happy with their devices

5.435.92 6.14

5.775.07 5.35 5.41 5.50 5.60

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Acer Amazon Apple ASUS Dell HP Samsung Sony Toshiba

Overall Tablet Satisfaction by Brand TBR

SOURCE: TBR

Note: Satisfaction is based on 7-point Likert scale, 1 being "extremely dissatisfied" and 7 being "extremely satisfied." Sony sample size is less than N=30.

“Very portable and easy to use. Like the use of Flash player.” — Samsung Galaxy Tab customer

“It's great not needing a desk, and the instant-on is terrific.” — Apple iPad customer

TBR Assessment• Ease of use was the primary driver of overall

satisfaction, followed by performance. Consumers appreciate a product that completes a task easily and efficiently, and are finding that balance in tablets by using them for what they do best.

Tablet Brands

Reference: Q1 and Q11 in Survey Instrument Appendix

TBR


TBR Findings• When compared to other devices, which TBR defined for this study as notebook PCs, desktop PCs and

smartphones, tablet users stated they are substantively more satisfied with their tablets overall and to an even larger degree when the devices are used purely for entertainment.

• The comparative ease-of-use of a tablet’s all-in-one user interface to perform specific tasks (entertainment-related activities such as playing casual games, browsing the Internet or watching online videos) versus desktops or notebooks was shown to be an important influencer in user satisfaction.

PCs are losing their luster as entertainment hubs; users report higher overall satisfaction with tablets for content and media consumption

Tablet Uses: Primary Device — by Satisfaction

Note: Satisfaction is based on 7-point Likert scale, 1 being

6.005.68

4.004.254.504.755.005.255.505.756.006.256.50

Tablet Other Device

SOURCE: TBR

Satisfaction by Overall Primary Device

TBR

6.03

5.41

4.004.254.504.755.005.255.505.756.006.256.50

Tablet Other Device

SOURCE: TBR

Satisfaction by Primary Device for Entertainment

TBR

Note: Satisfaction is based on 7-point Likert scale, 1 being "extremely dissatisfied" and 7 being "extremely satisfied."

19%

54%

6%

81%

46%

94%

0% 20% 40% 60% 80% 100%

Overall

ForEntertainment

ForProductivity

Tablet Other (Notebook, Desktop, Smartphone)

Primary Device: Tablet vs. Other

SOURCE: TBR

TBR


TBR


TBR Findings• According to survey respondents, prior to ownership, tablets are intended to be used as multipurpose platforms,

especially for video calling (e.g., Skype), text or IM communications, photo and video sharing, document creation and file viewing.

• Once acquired, however, activity on the devices streamlines and transforms the tablet from a content-management (create and view) to primarily a content-viewing device.

Tablet users’ activities shift after purchase from communication and creation to gaming, Internet browsing and social networking

Tablet Uses: Activities — Expected vs. Actual Usage

Tablet Activities Intender OwnerDifference in

Expectations vs. ActualBrowse the Internet 71% 83% 11%Email 77% 77% 1%Use social networking (i.e. Facebook, Twitter or LinkedIn) 50% 58% 7%Play casual games 39% 54% 15%Read digital books or magazines 56% 53% -3%Online shopping 52% 48% -3%Find places/get directions using maps or navigation 48% 44% -4%View online videos (i.e. YouTube) 42% 44% 2%Watch TV/movies 46% 40% -6%Listen to music 37% 37% 0%Online banking 38% 36% -2%Share photos or videos with others 40% 29% -11%Manage my calendar 38% 28% -10%View documents, spreadsheets or presentations 32% 23% -9%Take notes 30% 22% -8%Communicate with others using voice or video (i.e. Skype) 39% 21% -18%Send texts or Instant messages 33% 17% -17%Check into places/location awareness 20% 15% -5%Create and modify documents, spreadsheets or presentations 25% 13% -12%Play heavy-duty games 4% 5% 0%SOURCE: TBR

Activities Analysis: Owners' Usage vs. Intenders' Expected Usage TBR

Reference: Q6 in Survey Instrument Appendix

TBR


TBR Findings:• Email, unsurprisingly, is the leading activity for workers’ tablets. Workers also use their tablets for viewing and

editing documents, managing calendars and using company-specific applications.• The vast bulk of tablet activities in the work place, however, are unambiguously not work related, such as using

social networking, online shopping, and viewing and sharing YouTube videos.

Tablets are used for some productivity applications, but non-work activities account for a high proportion of use

Tablet Uses: Work Users

Rank ActivityPercent of Work Users

1 Email 75%2 Browse the Internet 69%3 View documents, spreadsheets or presentations 43%4 Manage my calendar 42%5 Use social networking (i.e. Facebook, Twitter or LinkedIn) 34%6 Find places/get directions using maps or navigation 31%7 Read digital books or magazines 31%8 Take notes 30%9 Online shopping 26%10 View online videos (i.e. YouTube) 25%11 Create and modify documents, spreadsheets or presentations 22%12 Send texts or Instant messages 20%12 Input data/information into forms or applications 20%14 Communicate with others using voice or video (i.e. Skype) 17%15 Use company-specific applications 17%16 Share photos or videos with others 15%17 Check into places/location awareness 11%

Work Tablet Usage: Activities by Popularity

SOURCE: TBR

TBR

Reference: Q6 in Survey Instrument Appendix

TBR


TBR Findings• Android-based tablet vendors such as Samsung and ASUS are trying to combat the dominance of the iPad (high

end) and the Kindle Fire (low end) in the tablet market by creating a niche market between the two price bands.• However, the hardware compromises vendors make to be less expensive than higher-end tablets, or the more

costly components they elect to choose to differentiate their products from low-end competitors, muddy the value proposition of these products, resulting in the lowest satisfaction.

Note: Satisfaction is based on 7-point Likert scale, 1 being "extremely dissatisfied" and 7 being "extremely satisfied."

Tablet users are least satisfied with devices that aim to provide high functionality but make compromises to reduce price

Tablets at Home: Satisfaction by Price Band


TBR


Presenter

Ezra Gottheil, Senior Analyst, Computing and Storage

[email protected]

@egottheil

@TBRincwww.slideshare.net/TBR_Market_Insightwww.youtube.com/user/TBRIChannel

For further information, please contact:

John SpoonerDirector, Computing [email protected]

James McIlroyVice President, [email protected]

mailto:[email protected]



About Us

Technology Business Research is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors.

Serving a global clientele, TBR provides timely and accurate market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996.

To learn how our analysts can address your unique business needs, please visit our website or contact us today.

Contact Us

[email protected] Merrill DriveHampton, NH 03842USA

This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.

All reports are available in PowerPoint and PDF. If you are viewing a PDF and require access to data, tables, etc. for use in internal documents, please visit www.tbri.com

and download the PowerPoint version.


http://www.tbri.com/

http://www.tbri.com/