Tablet Contenders Now Likely to Cannibalize Market Share as Worldwide Demand Tops Off

In a press release dated May 1, 2014, titled Worldwide Tablet Shipments Miss Targets as First Quarter Experiences Single-Digit Growth, According to IDC, IDC reported on worldwide tablet shipments for the first calendar quarter of 2014. The title mentions the quarter as a miss, but the forecast is not included in the summary. Year over year growth amounted to just 3.9%.

Microsoft® was no where to be found in the results published in the release, although the “Others” category, which is reported to have grown 11.5%, year over year, certainly includes any/all tablets running Windows 8.1, etc. Samsung was noted as growing its share of the world wide market, year over year, by 32%. Apple shipments were reported as declining, over the same period, by 16.1%.

These statistics lead me to assume markets will likely see vendors intensify competition with what I refer to as “cannibalization” strategies. These efforts can include generous trade in offers, either directly from competitors, or through sales channels (with, I would assume, competitors providing some incentive to channel partners to help pay for the effort). In fact, a visit to BestBuy’s web site on Saturday, May 3, 2014 revealed just such an offer.

As far as the likely impact of worldwide tablet markets hitting a plateau, at least for presently available technologies, on prominent contenders (Microsoft, Apple, Samsung, Google, other Android OEMs), I think it is likely Apple will have to report on some of this sales “pain”, while Microsoft may, as has been rumored, make some move towards the exit on the Surface product line. In contrast, Samsung’s substantial sales growth for these devices, year over year, may amount to good news for their bottom line, and perhaps, provide them with an incentive to proceed further in the direction of implementing their own O/S, or apps, etc.

Behind the scenes, for chip manufacturers, these results may amount to a sober wake up call. One of these, NVIDIA®, has already demonstrated substantial interest in other markets, including automobiles, and even serving graphics consumers with cloud-delivered GPU power.

But it is premature to render a definitive opinion on the impact on Intel® and its widely publicized mobile “catch up” effort. The Samsung Galaxy Tab 3 is powered by the Atom Processor. Microsoft, HP, Lenovo, Dell and Asus are all Intel OEMs, so the results may actually amount to good news for Intel. It will be interesting to read any news Intel may publish directly on its calendar 2014 performance in the Mobile market.

Consumers will likely benefit from the intensified competition. So, if you’re like me, contemplating a purchase of a new tablet, you may want to wait as these results will almost certainly produce some very attractive offers at a lower cost.

Disclaimer: I’m long Microsoft, NVIDIA and Intel, and have no present position in Apple, or Samsung. I am not affiliated with IDC. Finally, I have no substantive information beyond what’s included in IDC’s Press Release to support any of the claims made in this post

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


More Detail on Likely Ceiling for Smart Phone Sales

On Thursday, August 1, 2013, the Wall Street Journal published an article written by Spencer E. Ante and Ryan Knutson, Good Luck Leaving Your Wireless Phone Plan. Some of the information included in this article adds strong support to our contention U.S. consumer interest in high end smart phones has peaked. We see few opportunities for dramatic sales growth for these products (present day architecture), at least for the near future. Here’s what we found:

U.S. Telcos Experience Very Low Rates of Wireless Subscriber Churn
Strong smartphone sales require consumer purchases. U.S. consumers purchase smartphones to connect to wireless telephone services. Messrs Ante and Knutson’s article contends “[t]here are 326 million wireless subscribers in the U.S.”. The U.S. Census Bureau projects a total U.S. population of 316.382 million people as of today, August 3, 2013 (we obtained this information at U.S. and World Population Clock). It doesn’t take a lot of math to conclude most of the people likely to subscribe to wireless telephone services plans are already subscribing to them. These numbers show there are, presently, more plan subscribers, today, than the entire population of the U.S.

But the article goes on to note a mere 19 million subscribers changing carriers. So where are all the millions of new smartphone sales going to come from to support the revenue forecast for prominent platform manufacturers, Apple, Nokia, Samsung, Google, etc?

All of the upside potential for these manufacturers is to be found in emerging markets. But we don’t see these emerging markets buying into high end smartphones in a big way any time soon. No wonder Tim Cook, Apple CEO just traveled to China to meet with China Mobile Chairman Xi Guohua. We plan on writing a blog post on what we’ve read about this visit shortly.

In sum, we maintain a highly skeptical position on this question. We also think “new” technology (for example, Google’s Moto X smartphone introduced on the same day) is largely devoid of anything really “new”. Most of the features any subscriber could want are already included in current offers.

We are much more interested in efforts to incorporate computing intelligence within venues, for example, automobiles, passenger transportation, and homes. These markets present the dramatic sales growth figures we suspect Wall Street is after.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Markets Seem Oblivious to Security Risks of Small Smart Mobile Devices

On July 5, 2013, the TechCrunch website posted an article authored by Ms. Natasha Lomas, “Android ‘Master Key’ Security Hole Puts 99% of Devices At Risk of Exploitation”. Despite our hope they will react otherwise, we think consumer markets will continue to operate “as usual” and continue to purchase small, smart mobile devices built on the Android O/S.

As we wrote over a year ago, we think this complacent market attitude will only change if financial institutions retreat from their long standing commitment to absorb the cost of any breaches of online security systems, and start passing them through directly to consumers. We don’t see these institutions changing this position any time soon. Further, the well publicized intention of the U.S. Dept. of Defense, to protect the security of U.S. Ethernet networks and websites, reinforces the reasonableness of our assumption.

One would think an article like this one, by Ms. Lomas, would prompt consumers to look closer at competitive devices from Microsoft®. After all, Windows 8 is a proprietary operating system. Further, we think Microsoft has expended a considerable energy over the last year, or more, to build a brand for itself as THE most secure cloud services provider. But the continued misses of Microsoft’s public relations and marketing communications efforts for consumer markets will likely undermine any advantage they would otherwise gain from this article.

Pricing also plays a role here. Tablets and smartphones built on the Android O/S are, for most consumers, the least expensive option. In contrast, Microsoft’s Surface Pro tablet is the most expensive “stock” option (the 64GB version is about $70.00 more expensive than a comparable iPad). Consumers will simply expect each Android OEM to provide them with a fix for the security hole publicized in Ms. Lomas’ article. But even if this hole is plugged, others may soon come to light.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


On Using a Coordinated Direct Marketing Campaign in a Lead Generation Program for Highly Competitive Markets

IMB Enterprises, Inc. offers considerable experience producing leads from highly competitive markets. We approach our task with a set of tactics that we refer to as a coordinated direct marketing campaign. We have built our tactics, in part, on some of the work of acknowledged experts in the fields of direct marketing, product marketing, and enterprise sales. These experts include Ernan Ronan, Jeff Thull, and, with regards to competitive markets, Michael Porter.

The remainder of our tool set amounts to a gallery of our own entirely original techniques, which we developed through our work with three entrepreneurs who successfully built businesses that went public. We need to note that two of these three individuals are serial entrepreneurs with several business-building success stories. They each built multiple businesses that successfully went public. We will be happy to present more information about these three entrepreneurs, and our affiliation with each of them, upon request. Please contact us for more information.

We are happy to say that we, ourselves, have successfully managed our own business, in its present form, for over ten years. Therefore, our clients can depend upon our consultants as representatives of a successful business venture, who, as required, can provide overall business counsel, as required.

The tactics that we have developed over the years, which we have used to successfully deliver the results required by our clients, maybe, to some extent, surprising. For example, we are equally comfortable conceptualizing, designing, and, then managing marketing communications efforts (including print and/or electronic media), telemarketing and teleprospecting campaigns, and even some aspects of product marketing. These tactics can be particularly useful to early stage businesses with unique (or seemingly unique) products as well as more mature businesses looking to consolidate several marketing roles into a single resource.

As well, our team includes individuals with expertise of strategic value for growing businesses in 2013. Of particular importance, as we see it today, with specific regard to marketing communications, is an ability to combine graphic design with editorial content into a recipe that stimulates the appetite, and provokes the required interest on the part of prospects, to motivate them to reach out and engage with vendors like our clients. The members of our team possess this expertise.

In our opinion, it is by no means satisfactory for our clients to simply either over emphasize the value of a strictly graphical representation of a concept, or, conversely, to merely portray it through words alone. Rather a combination and balance is required, of graphic elements, text, and video, particularly where the competitive markets of concern are enterprise businesses.

In the next post to this blog we will discuss the second section of our gallery of tools, telemarketing and teleprospecting.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved