IDC at CES 2015 · IDC at CES 2015 Day 1 – Jan. 6 . Cannibalize This! ... Device Internet...

IDC at CES 2015 Day 1 – Jan. 6

Cannibalize This! The Evolution of Usage and Its Impact on the Device Market

Tom Mainelli, IDC Program VP Twitter: @tommainelli

1. Historic Device Jobs

2. The Rise of Tablets

3. Cannibalization Writ Large

4. Essential Guidance

Agenda

3

Once Upon a Time, a Mobile Phone’s Job to be Done was Pretty Clear…

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 4

And the PC Did, Well, Everything Else


The Arrival of the Modern Smartphone Had Little Initial Impact Upon PCs


Total WW Smartphone & PC Shipments From 2004-2010


0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

2004 2005 2006 2007 2008 2009 2010

PCs Smartphones

11.4% 5-year CAGR

40.2% 5-year CAGR

Source: IDC Mobile Phone and PC Trackers

Then the Tablet Was Reborn…


What Do I Do With It?


I Want One!

Device Internet Activities – WW (2012)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

By Computer By Smartphone By Tablet

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 10 PC: n = 46,308 Smartphone: n = 28,648 Tablet: n = 10,267

QI5: Which of the following activities have you done on the Internet in the past month for personal reasons?

Source: ConsumerScape 360°, 2012

Device Internet Activities – WW (2013)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

By Computer By Smartphone By Tablet

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 11 PC: n = 46,308 Smartphone: n = 28,648 Tablet: n = 10,267

QI5: Which of the following activities have you done on the Internet in the past month for personal reasons?

Source: ConsumerScape 360°, 2012

Total WW Smartphone, PC, & Tablet Shipments From 2010-2013


0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

2010 2011 2012 2013

PCs Smartphones Tablets

49.6% 3-year CAGR

-4.2% 3-year CAGR

124.8% 3-year CAGR

Source: IDC Mobile Phone, Tablet, and PC Trackers

2014: The Tablet Market Hits a Wall


WW growth rates drop from 52.5% YoY in 2013 to 7.2%, and WW iPad shipments actually declined YoY for the first time.

In mature markets people don’t stop liking and

using their tablets, they just stop buying new ones. Lifecycles extend as people find new jobs to be done for old tablets.

In 2014 the Phablet (5.5-inch+ phone) enters

the mainstream, and for some it obviates the need for a tablet. Big phones are now cannibalizing tablet shipments and usage.

Why Tablet Lifetimes Have Extended


2015: Artificial Market Silos Fracture


What is a PC? What if 20% of shipments are non Windows? What if the keyboard is optional? What if its cheaper than a tablet?

What is a Tablet? What if it has a larger

screen, a keyboard and multiple-app viewing? What if you can make voice calls?

What is a Smartphone? What if it is docked

with a monitor at your desk? What if it is strapped to your wrist with a 1-inch screen?

Cannibalization impacts ALL categories

CYOU (Choose Your Own Usage)


Consumers don’t care what WE call these devices, they’re just looking for products that let them complete the jobs to be done.

As hardware iteration slows and lifetimes

extend, devices will move between users and between usage models.

Personal data, stored locally & in the cloud, is

what becomes most important to people. Driving replacement cycles in existing markets

becomes much more difficult.

Finding Success in A Changing Market


Create higher quality, design-focused apps that do fewer things, but do them well on a range of devices.

Increase device segmentation, acknowledging

that the mid-market will be squeezed between general-purpose value devices and premium, purpose-built ones.

Build services that tie together a person’s

devices to drive a more unified and enjoyable experience across them.

Show a willingness to cannibalize your market

share today for success tomorrow

Key Examples… Shipping Today


Total WW Smartphone, PC, Tablet, & Smart Wearable Shipment Forecast


0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

2014 2015 2016 2017 2018

Smartphones PCs Tablets Smart Wearables

Source: IDC Mobile Phone, Tablet, and PC Trackers

Essential Guidance


A device’s job to be done will evolve over its useful lifespan, plan for this to happen

Cannibalization will become more

pervasive, and will have a lasting impact on growth rates

Matching services & apps to the

hardware people have is the key to long-term success

You must cannibalize your own

products, or somebody else will

Questions?

21

Tom Mainelli IDC Program VP [email protected] Twitter: tommainelli

Predicting Wearables in 2015: Where Momentum, Desire, and Value Lie

Ramon Llamas, Research Manager

2014 in the Rearview Mirror

21.0 million units shipped worldwide


Entry of Apple, Android Wear, and Microsoft

Still a solution in search of a problem?

Watches taking off

Can’t seem to get enough of health trackers Google Glass, where are you?

Yes, but it is becoming clearer Health is getting better, just scratching surface

Applications are just getting started

2015: Year of the Watch, Or S1? Apple Watch: a clear first-generation device (so far)

• UI is interesting, but altogether on par with others • App story yet to be told • Competition can still breathe


Apple’s results in 2015: 22 million units shipped • 85%/14.5%/0.5% split among Watch/Sport/Edition • Reaches 7.7% of worldwide iPhone installed base • Moving forward: replacement rates.

The future of Apple wearable computing: S1 processor Entire computer on a single chip Enables a wide range of wearables beyond Watch: eyewear, headphones,

screenless bands S1 chip to maintain growth for Apple as iPhone, iPad slow down

Glass Pivots away from Consumers, Embraces Commercial Oppty. Pieces falling into place

• Launch of Glass At Work in 2014 • Multiple companies showing interest • Same underlying theme: productivity


Verticals ripe for wearables • Energy • Manufacturing • Public safety • Health care

Partnership with Intel • Intel with ever-expanding wearables ecosystem • Leaves door open to return to consumers

The Next Hot Wearable: Shirts The wearable that’s already a wearable!

• We know shirts, we know wearables • Lots of sensor contact, close to vital organs • Smart textiles more durable, sensitive


Yes, it is another health/fitness tracker Monitor for SIDS Real-time alerts to family, physicians Monitor workouts/hazards for athletes of different stripes

The Next Hot Wearable: Shirts Which of the following activities are you most interested in for shirts? Tracking my physical activities during the day Tracking my sleep at night Learning about my UV exposure Contact physician if there is a medical emergency Connecting via GPS Tracking calories I consume Gaining insights on how to live a healthier life Insights about possible long-term illness Monitoring a chronic disease Insights about possible short-term illness Comparing my results against others’ results Monitoring my medication intake


IDC ConsumerScape 360 Emerging Technology Survey, Dececmber 2014. N = 252

30% 30 24 23 21 21 18 17 14 13 13 7

Applications to Reach 8 K 2014 wearables app market in review

• 2.5 K applications • Pebble and Tizen led market (~1K each) • Android Wear, Glass following with low 100


Developers bullish on wearable apps • 87.9% interested in apps for business • 79.7% interested in health/fitness apps • 75.0% believe wearables will be a priority for app developers

Keep close eye on applications distribution by platforms Microsoft offers Health on WP, Android, and iOS Breaks down the sandbox walls quickly Trouble for Apple?

Mobile Developer Survey, October 2014. N = 2197

IT Decision Maker Survey, October 2014. N = 121

Project Ara: Wearables Edition Google broadens Project Ara to include wearables

• Processor • Sensors (GPS, accelerometer, ambient light, UV) • Camera • Battery

Bringing Project Ara partners – Rockchip, Lattice


Larger implications • Recognizes that style changes, so can device • Reduces e-waste • Leaves space for future development • Slows down replacement rate/encourages use

Fewer Health and Fitness Trackers, More Wearables 2.0 Applications Not all health and fitness trackers will make it

• Lots of look-alike devices, experiences • Gold is in harvesting data


Wearables 2.0 applications take off • Data collected and communicated in real-time to HC providers • Diagnose long-term and short-term diseases • Major investment by major platforms

Approach with caution

• Wearable or medical device? • High degree of reliance on sensors

BlackBerry Gets into Wearables BlackBerry history and DNA a perfect fit

• Mission-critical hardware • Messaging • Security • Already an installed base of enterprise users


Software is key differentiator • Deep developer/ISV community focusing on enterprise • BlackBerry as a software-focused company • Emphasis on security

Wearables Forecast 2014 - 2018

0

20

40

60

80

100

120

2014 2015 2016 2017 2018 Basic Wearables Smart Wearables


(M) Basic Wearables are those devices that do not run 3rd party applications. They function the same exact way as they did first out of the box. Fitbit devices, Jawbone Up, and OM Signal shirts are examples that fall into this category.

Smart Wearables are those devices that run 3rd party applications. Users can download them either directly or through a smart compute device. Pebble Watch, Moto 360, and Google Glass are examples that fall into this category.

Source: Worldwide Wearable Technology Device 2014 – 2018 Forecast, Dec 2014 253091

Wearables Forecast 2014 - 2018

0

20

40

60

80

100

120

2014 2015 2016 2017 2018 Clothing Eyewear Modular Wristwear Other


(M)

0

5

10

15

20

25

30

35

40

2014 2015 2016 2017 2018

($B)

Source: Worldwide Wearable Technology Device 2014 – 2018 Forecast, Dec 2014 253091

Essential Guidance Experiment with form and function.


Wearable applications will be in high demand. Where’s yours?

Health is the low-hanging fruit for wearables. It’s also just getting started. The enterprise opportunity is warming up quickly. Plenty of problems waiting to be solved.

Contact Information


Ramon T. Llamas (p) 508.935.4736 (e) [email protected] (t) idcrllamas

mailto:[email protected]

Home IoT: A Long Time Coming, An Exciting Road Ahead

Jonathan Gaw Research Manager

Connected Consumer

Agenda

Where we are, where we want to go What consumers tell us How fast, how high Essential Guidance


IDC’s Definition of Home IoT

The Internet of Things is “a network of networks of uniquely identifiable end points (or things) that communicate without human interaction (by either wired or wireless access) using IP connectivity.” Home IoT solutions meet the above definition and are also designed to be used primarily in the home by a consumer.


Where We Are


Where We Want To Go


What Consumers Tell Us: Pragmatic Over Prosaic

0% 20% 40% 60%

Have sensors monitor for fire, smoke, water, or CO2 at home and report to you wherever you are

Have sensors monitor the opening and closing of doors and windows and report activity to you wherever you are

See and record who comes to the front door using a video camera

Have multiple changes occur in the home simultaneously as a result of triggers

Lock and unlock your doors through your smartphone when you're away from home

Control all lights, home appliances, and entertainment devices in my home from anywhere

Change lighting, home appliances or entertainment device settings while I am away from home

Automatically adjust the use of appliances and temperature based on real-time energy prices Highly

Interested

Already Doing It


Q. Imagine your home's thermostat, home entertainment system, doors and lights all were connected to the Internet. They could be controlled both in traditional ways and through devices like smart phones, tablets, and personal computers. How interested would you be in using the system to do each of the following?:

Note: N=1,122 U.S. adults Source: IDC ConsumerScape 360 Emerging Technology Survey, December 2014

What Consumers Tell Us: Cost and Reliability

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

Cost of on-going use Cost of installation Cost of equipment

Ease of use Reliability

Overall value Ease of installation Overall experience

I need more information about them More uses for home control


Q. Thinking about what would make you more interested in home control applications to get you to actually purchase and set-up such a system, on a scale of 1 to 10, where 1 = Not at all important and 10 = Extremely Important, how would you rate the following in terms of needing to improve before you would purchase a home control system?

Note: N= 681 respondents who gave an interest score of 8 or higher for any home automation application, but has not actually implemented a home automation application.

Source: IDC ConsumerScape 360 Emerging Technology Survey, December 2014

What Consumers Tell Us: “I Can Do It!”

0% 10% 20% 30% 40% 50% 60% 70%

Program a thermostat

Turning on and off a

water heater

Install a new front door

lock

Replace a light switch

Replace a thermostat

Have done task previously

Comfortable with task


Q. On a scale of 1 to 10, with 1 being "Not at all comfortable" and 10 being "Extremely comfortable", how comfortable would you be doing each of the following activities without hiring help? If you have done so previously, please also indicate that.

Note: N=1,122 U.S. adults. Source: IDC ConsumerScape 360 Emerging Technology Survey, December 2014

Drivers The cost side: Moore’s Law The benefits side: Metcalfe’s Law Mobile devices ecosystem Consumer technology maturity


Home IoT Forecast, 2013-2019


-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

-

50,000

100,000

150,000

200,000

250,000

2013 2014 2015 2016 2017 2018 2019

Hom

e Io

T So

lutio

ns In

stal

led

(000

s)

Hom

e Io

T H

ouse

hold

s (0

00s)

U.S. Home IoT Households

Worldwide Home IoT Households

U.S. Home IoT Solutions Installed

Worldwide Home IoT Solutions Installed

Source: Worldwide and U.S. Home Automation, Monitoring and Control Forecast, 2013-2019 (January 2015)

Essential Guidance

If you want to go fast, go alone …


If you want to go far, go together.

Contact me

Jonathan Gaw Research Manager Connected Consumer 612-729-4730 [email protected] Twitter @jonathangaw

47

How Low Power Intelligent Silicon Enables Home IoT and Wearables

Mario Morales CES 2015

Agenda

Home IoT Opportunities and Challenges for Tech Suppliers

Low power is where innovation still needs to happen

Enabling Technologies: Sensors to processors Market Forecast Essential guidance

Transforming the Home into a platform that engages the consumer

Starts with remote monitoring and control Connected lifestyle beyond our phone Health and well being through constant monitoring and analytic driven systems Providing personal and engaging experiences

Addressing Home IoT Opportunities and Challenges

Core challenges to bridging the analog and digital world for the consumer

User engagement begins with management and convenience Trust, security, and privacy Contextual awareness Low power and cost Smaller form factors Engaging user interfaces

Extending IoT to the Home – The Home IoT Opportunity

Telephone

Power Line Cable Fiber

Cloud

Monitor, manage, and control the home Convert existing home products into connected systems and new device categories Service providers will provide a key channel into the home Energy consumption and integration are key challenges

Intersection of Fashion and Technology

Leverage relevant connected data around us

Suppliers and brands have an opportunity to redefine computing

Smart headsets always on always listening, more intuitive interaction, emergence of apps; wrist worn technology (fitness, fashion, safety, personal ID)

A highly scalable platform, from tech toy to powerful, personal system

Wearables – In Sync with Home IoT Applications Across Many Consumer Markets

Gaming

Smart Watches

Payment

52

Fitness & Healthcare

Home IoT and Wearables have multiple requirements for processing

Striking a balance between processing vs. power • ARM - Cortex M7 and optimized

single core Cortex-A processors • Imagination – MicroAptive and

InterAptive cores, Creator board, repositioning of networking products

• Intel (Atom and Quark) Local Intelligence needed for

creating contextual awareness

Smaller optimized cores, Linux and Android stacks enables scale of platforms

Processing

Driving transparent computing and HMI – Changing how we interact with devices

Bridging the physical and digital worlds – tracking our activity and managing our environment

Sensor suppliers and software partners expanding capabilities to capture data and enable context awareness

Sensors integrated in low power solutions

Analytics begins with sensors and enable engagement

Sensors & Actuators

Connectivity plays the critical role of bridging dispersed systems and wearables

Variety of combinations Key challenges

remains power consumption versus bandwidth and range

Silicon integration is the key way to reduce power and cost

Emerging standards drive interoperability and attempt to break through walled gardens

Connectivity

Market Forecasts

Home IoT Opportunity

-

200

400

600

800

1,000

1,200

1,400

2013 2014 2015 2016 2017 2018 2019

Syst

ems

Ship

men

ts (M

u)

Home Systems Unit Forecast

Smart Appliance Energy Mgt. Entertainment HVAC Lighting Security Gateway

-10%

10%

30%

50%

70%

2012 2013 2014 2015 2016 2017 2018 2019

Inte

llige

nt S

yste

ms

Pene

trat

ion

Intelligent Systems Penetration In The Home

Smart Appliance Entertainment HVAC

Lighting Security Gateway

Source: IDC Embedded & Intelligent Systems Market Model, 2014

Note: Does not include Energy Mgt. due to 100% Intelligent Systems penetration.

Note: Home systems do not include STBs, digital surveillance cameras, or standard home networking devices. Core Systems have the potential for a CPU and generally include an HMI function

Home IoT-Connectivity Penetration

16% 23%

32% 41%

48% 54% 58%

2013

2014

2015

2016

2017

2018

2019

Wearables Semiconductor Forecast by Type

0

500

1,000

1,500

2,000

2,500

3,000

2013 2014 2015 2016 2017 2018

Rev

enue

s ($

M)

Semiconductor Revenue Forecast

Complex Accessories Smart Accessories Smart Wearables

Source: IDC Enabling Technologies and Semiconductor Research, 2014

2014-18 CAGR: Complex Accessories – 55% Smart Accessories – 129% Smart Wearables– 226%

Snapshot of Semiconductor Markets in 2019

5% 1%

26%

11%

7% 11%

46%

2019

IoT Wearables Mobile PC Tablet Auto Other

N=$389 B

CAGR

48% 50% 4% -3% 3% 10% 3%

Essential Guidance Suppliers must investment

in optimized platforms and domain expertise

Addressing Interoperability and low power consumption are key to enable scale of solutions-begins with intelligent silicon

Home IoT and Wearables Opportunity– is about engaging with the consumer

Over $10 Billion Semiconductor market by 2019

60

Contact Information

Mario Morales [email protected] +1 650.350.6498

61

mailto:[email protected]

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