Computing Devices Benchmark Review Webinar Slides

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

TBR’s Computing Business QuarterlySM

Research Highlights and OutlookTechnology Business Research (TBR) Quarterly Webinar Series

Oct. 18, 2012

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2 TBR Quarterly Webinar Series | 10.18.12 | www.tbri.com | ©2012 Technology Business Research Inc.

Computing Business Quarterly Research Highlights and Outlook: Webinar Presenters

Ken HyersSenior Analyst

Email: [email protected]: @kenhyers

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• Windows 8 tablets will shake up an already competitive market when they go on sale in 4Q12.

• However, Windows 8 tablets face an uphill battle: Apple continues to dominate the market and Google’s Nexus made an entrance to strongly positive reviews.

The Windows 8 sales boost will not come until at least 4Q12, but positive reviews build anticipation and promise high demand

CBQ 2Q12 Research Highlights and 2012 Outlook

Computing Devices Vendor Trends for 2012

• PC sales are being hit by Windows 8 deferrals caused by customer anticipation and the shift to tablets.

• Windows 8 will drive sales, but not until late 4Q12/1Q13.• Tablets are generating all the industry buzz.

SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES

• Nokia faces its make-or-break moment with the Windows 8-based reboot to its Lumia smartphone platform in 4Q12.

• A miss with Windows 8 could spell doom for the former leader in global smartphone share.

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• PC vendors are focused on selling into emerging markets in advance of an anticipated Windows 8 rush.

• Enterprise buyers will wait until 2013 for Windows 8.


PC Vendor Trends for 2012

• PC sales are sluggish as consumers and even some enterprise buyers wait for Windows 8.

• Tablets sales are affecting PCs — the TBR CSAT shows many businesses are trading low-end laptops for tablets.

• To date, Ultrabooks have been a disappointment for many.• Numerous Ultrabook models were promised for 1H12, but few

were actually delivered.• In 2H12, as vendors deliver, will consumers step up?

Windows 8 anticipation will continue to defer sales for premium-priced PCs in 3Q12

IMAGE SOURCE: WEALTHMANAGEMENT.COM

IMAGE SOURCE: SLASHGEAR

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Lenovo Group

COMPUTER BUSINESS QUARTERLYSM

Publish Date: Sept. 7, 2012

Authors: Ezra Gottheil ([email protected]), Computing Practice Senior Analyst; Beau Skonieczny, Computing Practice AnalystContent Editor: John Spooner, Computing and StoragePractice Director

Second Calendar Quarter 2012First Fiscal Quarter 2013 Ended June 30, 2012

TBR OUTLOOK — POSITIVE TBR SCORE (0-10 SCALE)

h 5.10

Dell and HP are playing the profitability game but losing traction against more agile PC growth leaders

HPYear-to-year PC revenue declines in 2Q12 are due to the impact of low-priced competitors and increased competition from tablets.

LenovoA balanced approach to profitability and pricing drove Lenovo’s PC sales and increased its traction in international markets.

DellChoosing not to participate in heavy PC discounting in the run-up to Windows 8, Dell’s desktop and notebook revenue declined by 9% and 19%, respectively.

CBQ 2Q12 Research Highlights and 2012 Outlook: PC Vendors


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Hewlett-Packard Corp.

Second Calendar Quarter 2012Third Fiscal Quarter 2012 Ended July 31, 2012

Publish Date: Sept. 13, 2012Authors: Ezra Gottheil ([email protected]), Computing Practice Senior Analyst; Jack Narcotta ([email protected]), Computing Practice AnalystContent Editor: John Spooner, Director of Computing Practice

TBR OUTLOOK — NEGATIVE TBR SCORE (0-10 SCALE)

4.07

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Dell Inc.

Second Calendar Quarter 2012Second Fiscal Quarter 2013 Ended Aug. 3, 2012


h 5.04


Author: Christian Perry ([email protected]), Computing Practice Senior Analyst; Krista Macomber, Computing Practice Analyst

Content Editor:John Spooner, Computing Practice Director

Dell, HP and Lenovo will unveil a barrage of Windows 8 models in 4Q12

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• TBR studies show large, pent-up demand for Windows 8 tablets.

• The Windows 8 tablet can and will cannibalize some PC sales.


Tablet Vendor Trends for 2012

• Google’s Nexus and Amazon’s Fire 2 HD will expand the market for Android but only at the low-end of the price-band range.

• Windows RT tablets offer little performance enhancements over the best Android tablets, but are too expensive.

• Windows 8 tablets will open a new front against Apple by establishing a higher-priced category for tablets.

• Apple and iOS will dominate tablets well into 2013.• Apple will maintain its lead in unit sales and revenue in 1H13,

driven by the Mini.

Pent-up demand for Windows 8 tablets will drive new device sales starting in 4Q12 and continuing in 1Q13

IMAGE SOURCE: MICROSOFT

IMAGE SOURCE: INTOMOBILE

IMAGE SOURCE: BGR

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Lenovo Group



Authors: Ezra Gottheil ([email protected]), Computing Practice Senior Analyst; Beau Skonieczny, Computing Practice AnalystContent Editor: John Spooner, Computing and StoragePractice Director

Second Calendar Quarter 2012First Fiscal Quarter 2013 Ended June 30, 2012


h 5.10

Lower-priced tablets will be Android vendors' most competitive offerings as device vendors await Windows 8 to tap into new growth avenues

AsusAsus led the quarter in non-iOS tablet sales, as the launch of the $199 Nexus 7 tablet aided the company’s relatively strong sales of the premium-priced Transformer tablet.

LenovoStrong demand by public sector customers for the ThinkPad Tablet fueled tablet revenue growth for Lenovo in 2Q12; however, tablet sales grew from a relatively small sales base.

AppleiPad revenue in 2Q12 was driven by Apple’s aggressive international rollout of the new iPad, which helped drive double-digit tablet growth across all regions.

CBQ 2Q12 Research Highlights and 2012 Outlook: Tablets

The consumer tablet market has divided, with Apple in the top tier and Android at the bottom; however, the commercial market is still undefined.


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Asus


Publish Date: Sept. 20, 2012Author: Beau Skonieczny ([email protected]), Computing Practice AnalystContent Editor: Ezra Gottheil , Computing Practice Senior Analyst

Second Calendar Quarter 2012Second Fiscal Quarter 2012 Ended June 30, 2012

TBR OUTLOOK – POSITIVE TBR SCORE (0-10 SCALE)

h 5.08

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Apple Inc.


Publish Date: August 14, 2012Authors: Ezra Gottheil ([email protected]), Computing Practice Senior Analyst; Beau Skonieczny, Computing Practice AnalystContent Editor: John Spooner, Computing Practice Director

Second Calendar Quarter 2012Third Fiscal Quarter 2012 Ended June 25, 2012


h 6.47

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• Samsung won the industry shift from low-margin feature phones to high-end smartphones.

• Apple’s iPhone dominates the high-end market.• Few vendors have the scale to compete across all price bands

and markets.


Smartphone Vendor Trends for 2012

• Smartphone sales are rapidly expanding, but few vendors are profiting.

• Differentiation is the key to profits.

• Windows 8 offers Nokia an opportunity to reboot its Lumia smartphone platform.

• If Nokia is to survive, failure is not an option.

Global demand for smartphones continues to increase rapidly, but fickle consumer tastes make targeting the mass market risky for vendors

IMAGE SOURCE: NOKIA

IMAGE SOURCE: SAMSUNG

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Motorola


Publish Date: May 18, 2012Authors: Ken Hyers, Computing Practice Senior Analyst ([email protected]), and Jack Narcotta, CP Analyst ([email protected])Content Editor: John Spooner, Computing Practice Director

Second Calendar Quarter 2012Second Fiscal Quarter 2012 Ended June 30 2012


h 5.18

HTC

Smartphone vendors will invest in portfolio development as they look for ways to stand out from the competition

SamsungStrong worldwide demand for Samsung’s flagship Galaxy smartphones supported the company’s second-place position in 2Q12 smartphone revenue.

HTCDespite a year-to-year revenue decline of 27.1%, HTC was able to record the third-highest smartphone revenue in 2Q12.

AppleAnticipation for the iPhone 5 led to a sequential iPhone sales decrease of 28.4% in 2Q12.

CBQ 2Q12 Research Highlights and 2012 Outlook: Smartphones

The iPhone 5 will slow adoption of competing premium smartphones


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Nokia


Publish Date: Aug. 9, 2012Authors: Jack Narcotta, Computing Practice Analyst ([email protected])Content Editor: John Spooner, Computing Practice Director

Second Calendar Quarter 2012Second Fiscal Quarter 2012 Ended June 30, 2012

TBR OUTLOOK — NEGATIVE TBR SCORE (0–10 SCALE)

5.00

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Apple Inc.


Publish Date: August 14, 2012Authors: Ezra Gottheil ([email protected]), Computing Practice Senior Analyst; Beau Skonieczny, Computing Practice AnalystContent Editor: John Spooner, Computing Practice Director

Second Calendar Quarter 2012Third Fiscal Quarter 2012 Ended June 25, 2012


h 6.47

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Questions?


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For further information, please contact:

John Spooner James McIlroyDirector, Computing Practice Vice President, [email protected] [email protected]

Ken HyersSenior Analyst

[email protected]@kenhyers

Computing Business Quarterly Research Highlights and Outlook: Webinar Presenters

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Backup

CBQ 2Q12 Research Highlights and 2012 Outlook: Backup

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Acer

Apple

ASUSDell

Fujitsu devices

HPLenovo

Samsung

Sony

Toshiba

Panasonic

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

-20% -10% 0% 10% 20% 30%

PC G

ross

Mar

gin

PC Revenue Growth YTY

2Q12 PC REVENUE GROWTH VS. PC GROSS MARGIN TBR

SOURCE: TBR AND COMPANY DATA

PC sales slowed on the verge of a Windows refresh, leaving lower-priced vendors able to penetrate emerging markets and gain global share

CBQ 2Q12 Research Highlights and 2012 Outlook: Key Trends


Sluggish sales for PCs are temporary

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Acer

Amazon

Apple

ASUSDell

Fujitsu devices

Lenovo

Motorola Mobility

RIM

Samsung

Sony

Toshiba

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

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

Gro

ss M

argi

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Tablet Revenue Growth YTY

2Q12 TABLET REVENUE GROWTH VS. TABLET GROSS MARGIN TBR



With Apple dominating the consumer tablet space, Windows 8 will create opportunities for vendors to capitalize on commercial sales


Android has failed to make inroads into the enterprise

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Apple

HTC

LGDell

Acer

Motorola Mobility

Nokia

RIM

Samsung

ASUS

Huawei

Sony

ZTEFujitsu Devices

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

-150% -100% -50% 0% 50% 100% 150% 200% 250% 300% 350% 400%

Gro

ss M

argi

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Smartphone Revenue Growth YTY

2Q12 SMARTPHONE REVENUE GROWTH VS. SMARTPHONE GROSS MARGIN TBR


//3000%

Lenovo,2966.7% YTY


The iPhone 5 launch will slow adoption of competing premium smartphones and negatively impact Samsung’s sales in 2H12


Samsung’s and Apple’s dominance in smartphones leaves little room for competitors

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About TBR

CBQ 2Q12 Research Highlights and 2012 Outlook: About TBR

TBR


TBR’s Computing Business Quarterly (CBQ) reports deliver unique insight and value through in-depth analysis in a concise, consumable format • TBR reports are unique due to their deep,

holistic analysis of leading vendor businesses.

• Financial modeling and TBR insights help customers gain a better understanding of vendor business models.

• TBR reports and webinars are responsive to client timelines, clear and concise, and provide insights across multiple layers of a vendor’s organization and infrastructure.

• TBR’s strategic assessment provides an impartial check on a vendor’s progress in its strategic objectives.

CBQ 2Q12 Research Highlights and 2012 Outlook: Webinar Overview

TBR Computing Business Quarterly Portfolio

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Computing Devices BenchmarkSecond Calendar Quarter 2012


Authors: Ken Hyers, Senior AnalystEzra Gottheil, Senior AnalystJack Narcotta, AnalystBeau Skonieczny, AnalystAngela Lambert, Research Analyst

Content Editor: John Spooner ([email protected]), Computing Practice Director

TBR


Windows 8 will continue to impact the PC and tablet space in 3Q12 by creating growth opportunities for vendors

CBQ 2Q12 Research Highlights and 2012 Outlook: 3Q12 Research Topics

Quarterly Focus Areas TBR Perspective

The Impact of Windows 8

• Uncover how PC vendors are leveraging Windows 8 to gain traction in the consumer and commercial space.

• Discuss how Windows 8 will counter the consumerization trend.

PC & Tablet Vendor Ecosystems

• Explore how poorly curated app stores create opportunities for PC and tablet vendors.

• Examine how cloud services and content sharing is impacting vendor revenue streams and brand loyalty.

Tablet Price Wars

• Analyze vendors’ approach to the low-cost tablet space and what it means to broader tablet sales strategies.

• Determine how Windows RT and x86 Windows 8 tablets will be successful.

Partners and M&A

• Reveal how vendors are using M&A as a lever for rapid share growth and brand penetration.

• Uncover the underlying partner strategies vendors are using to drive technology improvements and patent apprehension.

Vertical-specific Differentiation

• Reveal how Windows 8 tablets will target specific verticals, such as education and financial institutions.

• Determine the impact content will have on vendors effectively tapping into new vertical markets.

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Vendors that establish more robust device ecosystems and differentiated capabilities will gain competitive advantages in 2H12

CBQ 2Q12 Research Highlights and 2012 Outlook: 3Q12 Research Topics

Quarterly Focus Areas TBR Perspective

The Impact of Windows 8

Discuss how Windows Phone 8 will help Microsoft gain traction in smartphones.

Mobile Device Ecosystems

• Explore whether the Windows 8 mobile device app ecosystem is rich enough to meet customer expectations.

• Consider how tablet vendors are building ecosystems around specific verticals.

Tablet Price Wars

• Discuss how tablet vendors will use pricing as a lever to target specific customer segments.

• Determine the impact of a lower-priced iPad on the market.

Software & Service Differentiation

• Provide insight on how content partnerships and media offerings will promote device sales and brand loyalty.

• Offer perspective on how advanced search services such as Siri will evolve and impact mobile devices.

iPhone 5 Counters

• Examine how the release of the iPhone 5 will impact smartphone sales.• Analyze the impact of Apple Passbook across the ecosystem of mobile

wallet solutions. • Show how and where maps issues create opportunities for other

smartphone vendors.

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About TBR

Technology Business Research (TBR) 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.

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