In 2015, one out of every two devices shipped worldwide will be an Android device. According to research firm Gartner, 2.5 billion devices (PCs, tablets, ultra mobiles and mobile phones) will be shipped in 2014, accumulating the growth rate of 6.9%. Interestingly, both traditional PCs and Tablets will feature almost identical shipments in 2014, however, tablet shipments will surpass traditional PCs for the first time in 2015. Shipments of devices running on Android OS are projected to cross 1 billion mark during 2014.
PCs Evolving Into Tablets And Ultramobiles
Traditional PCs are undoubtedly facing decline, but not as quickly as during earlier years. This slow down can be attributed to the bottoming out of the shift from traditional desktop to tablets. In other words, users are increasingly becoming more comfortable about devices which they feel are genuinely useful to them. Consumers will rationalize or increase their portfolio of devices and try to work out what they require from each device. This explains the 76% growth forecast for ultramobile devices in 2014. As compared to 21.1 million units in 2013, an estimated 37.2 million units of Hybrid and clamshell ultramobile devices will be sold in 2014.
Gartner’s forecast pegs the tablet market to grow 38.6% as overall adoption continues to grow in markets other than North America. Tablets have been a powerhouse of growth in recent years, and a shift from iOS tablets to low-price Android tablets is a key factor contributing to growth. Increased market saturation will bring down the cost of these devices. Price remains the key factor, but new users will look for smaller screens and greater portability, while current tablet users will demand better connectivity in their tablet replacements.
Mobile phones are the largest segment of the overall device market. An estimated 1.9 billion devices will be shipped in 2014, a 4.9% increase from 2013. Gartner predicts the growth to come from the lower end of the premium phone market and the higher end of the basic phone market. This presents an enormous opportunity for upper-mid range of smartphones price tagged with between $550 and $650 and entry-level smartphones falling under $120 – $200 price range. Replacement cycles declined in 2013 due to lack of compelling hardware innovation. However, in emerging markets including Asia-pacific and Latin America, phones are continuously being upgraded, compensating for a maturing of the mobile phone market.
No Stopping The Growth Of Android
An estimated 1.17 billion devices, to be shipped in 2014, will run on Android OS. Shipments of Android products will increase by 33% in 2014. Google Inc. (NASDAQ:GOOG) owned Android continues to be benefited in a market where device margins are shrinking. This also depicts that Android shipment growth rate will slow down in 2015. This implies that Android OS will apparently hit saturation point in all the device categories mentioned. Hence the aggressive expansion into wearables, smart TVs, Notebooks and even Cars, are a bet on the company’s long term future.
Apple Inc. (NASDAQ:AAPL) is estimated to ship 286.4 million devices in 2014 through its iOS and Mac OS powered devices. As per the report, shipments of Apple products will grow at a rate of 18% in 2014, followed by 13% in 2015. This decline is bound to hurt its long-term prospects. Already, sales of iPads are on a decline in North America and to increase iPad growth, Apple will need to reinvigorate its replacement cycle. Currently, the Cupertino giant has dropped the prices of its flagship phone models, iPhone 5S and iPhone 5C by US$100 to tap the mid range smartphone market. Rumours are also surfacing of plans to release a large screen iPhone, purported as iPhone 6. Besides, Apple also has an opportunity to enter the wearables market and target niche categories such as fitness.
Shipments of Windows OS products are estimated to reach 339.1 million this year. This represents only a modest 4.3% increase from last year. The projections also depict that Windows is on track to increase growth to 11.8% throughout 2015. Decline of traditional computing devices will force Windows OS to adapt to tablets and Smartphones. Recently Microsoft Corporation (NASDAQ:MSFT) has announced to offer its OS for free to all smartphone and tablet vendors, extended its key services and has added a voice assistant named Cortana.
Manufacturers are likely to consider a mix of Android and Windows devices in their portfolio. The device market looks set to reach saturation point with the growth rate of device shipments declining to 5.9% in 2015. If this prediction proves to be correct, this might be the year where device growth peaks to its limits. All tech companies, hardware and software alike will be looking to expand into new territories.