Apple is now the largest buyer of semiconductors in the world, according to market research firm Gartner. The Cupertino-based company trailed both Samsung and HP in 2010, however Apple’s spending is estimated to have jumped 34.6% in 2011. The company spent $17.3 billion on semiconductors in 2011, or 5.7% of the total share of chip purchases. Coming in second was Samsung, which spent $16.7 billion or 5.5% of all chip purchases, and HP came in third with $16.6 billion. Leading electronics manufacturers spent a total of $105.6 billion on semiconductor purchases last year, representing a year-over-year increase of $1.8 billion. ”The major growth drivers in 2011 were smartphones, media tablets and solid-state drives (SSDs),” said Masatsune Yamaji, principal research analyst at Gartner. “Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand. Media tablets were also a growth driver for the semiconductor market throughout 2011.” Gartner’s press release follows below.

Gartner Says Apple Became the Top Semiconductor Customer in 2011
Top 10 Original Equipment Manufacturers Represented $105.6 Billion of Semiconductor Demand, Accounting for 35 Percent of Total Semiconductor Chip Revenue in 2011

STAMFORD, Conn., January 24, 2012—

Leading electronic equipment manufacturers remained the center of the semiconductor world in 2011, accounting for $105.6 billion of semiconductors on a design total available market (TAM) basis — 35 percent of semiconductor vendors’ worldwide chip revenue, according to Gartner, Inc. This represented a year-over-year increase of $1.8 billion, or 1.8 percent from 2010.

Design TAM represents the total silicon content in all products designed by a certain electronic equipment manufacturer or in a certain region, while purchasing TAM represents the total silicon content purchased directly by a certain electronic equipment manufacturer or in a certain region. Design TAM is a useful index for semiconductor vendors when they are considering how to allocate their sales or field application engineer resources by customer or region. Purchasing TAM is a useful index for semiconductor vendors when they are considering how to establish an efficient distribution network by customer or region.

“The major growth drivers in 2011 were smartphones, media tablets and solid-state drives (SSDs),” said Masatsune Yamaji, principal research analyst at Gartner. “Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand. Media tablets were also a growth driver for the semiconductor market throughout 2011.”

“Given the rapidly changing competitive structure of the IT and electronics industry, no semiconductor device vendor can afford just to monitor the requirements of the current market leaders,” Mr. Yamaji said. “Vendors need to be constantly looking for new market entrants who will, in turn, be tomorrow’s market leaders.”

Within the top 10 rankings, three companies were from the Americas, three from Asia/Pacific, three from Japan and one from Europe, the Middle East and Africa (EMEA). Apple led the market in 2011 (see Table 1), achieving significant growth, as it has done for the past five years. As a result, Apple became the biggest customer of semiconductor chip vendors in 2011, climbing two places in the ranking, from third in 2010.

Apple gained a much greater share of the smartphone market, and its media tablet business was also highly successful in 2011. While DRAM prices fell drastically in 2011, and many PC vendors decreased their total semiconductor demand accordingly, the success of the MacBook Air enabled Apple to increase semiconductor chip demand even in its PC business.

Mr. Yamaji said that as more brand-name companies are increasing their production outsourcing to original design manufacturers (ODMs) and electronics manufacturing services (EMS) providers, semiconductor procurement by ODMs and EMS providers has increased year over year. Currently, three of the top 10 purchasing TAM companies are so-called contract manufacturers.

“Semiconductor chip vendors must pay attention not just to the design TAM and purchasing TAM by company, but also by region,” said Mr. Yamaji. “This is the key to avoiding inappropriate sales resource allocation. They must keep an eye on design-win opportunities in the U.S., while also establishing a strong distribution network in China.”

Google’s Android platform continued to grow rapidly in the third quarter of 2011 as shipments of Apple’s iPhone declined. New data released by market research firm Gartner on Tuesday shows that Android powered more than half of the smartphones that sold to end users last quarter at 52%. In the same quarter last year, Android was found on just 25.3% of smartphones sold. The second largest share last quarter belonged to Symbian according to Gartner, though it’s share was nearly halved from 36.3% in the third quarter last year to 16.9% last quarter. Read on for more.

With sales that dropped roughly 3 million units sequentially, Apple’s iOS platform was found on just 15% of smartphones sold last quarter, also down from 16.6% in the third quarter of 2010. Gartner attributes the decline to slowed purchases in anticipation of the iPhone 4S launch in October.

“Android benefited from more mass-market offerings, a weaker competitive environment and the lack of exciting new products on alternative operating systems such as Windows Phone 7 and RIM,” Gartner analyst Roberta Cozza said in a statement. “Apple’s iOS market share suffered from delayed purchases as consumers waited for the new iPhone. Continued pressure is impacting RIM’s performance, and its smartphone share reached its lowest point so far in the U.S. market, where it dropped to 10 percent.”

RIM’s share of smartphone sales dipped to 11% in the third quarter, down from 15.4% in the third quarter last year, and Microsoft’s share dropped from 2.7% to 1.5% over the same period.

Total channel sales of mobile phones reached 460 million units globally last quarter according to Gartner, and sales to end users grew 5.6% to 440.5 million units. Nokia was the top vendor overall, having sold 105.4 million mobile phones last quarter, and the vendor was followed by Samsung (78.6 million), LG (21 million), Apple (17.3 million) and ZTE (14.1 million).

Smartphone sales to end users totaled 115 million units last quarter, up 42% from the same period last year but down 7% sequentially. Gartner’s full press release follows below.

Gartner Says Sales of Mobile Devices Grew 5.6 Percent in Third Quarter of 2011; Smartphone Sales Increased 42 Percent

- Android OS Rose to Account for More Than 50 Percent of Smartphone Sales

Egham, UK, November 15, 2011—

Worldwide sales of mobile devices totaled 440.5 million units in the third quarter of 2011, up 5.6 percent from the same period last year, according to Gartner, Inc. Non-smartphone devices performed well, driven by demand in emerging markets for low-cost devices from white-box manufacturers, and for dual-subscriber identity module (SIM) devices.

Sales into the channel reached 460 million units. Gartner analysts said this increase was because of inventory build-up in the channel partly because of the shipping of new devices late in the quarter but mostly to prepare the channel for the holiday season. Gartner expects most of the build-up to be sold by the first quarter of 2012.

“Our forecast for the end of the year remains broadly in line at a worldwide level as regions such as Asia/Pacific and the Middle East and Africa make up for weaker performance in the Western European market,” said Annette Zimmermann, principal analyst at Gartner based in Munich.

Smartphone sales to end users reached 115 million units in the third quarter of 2011, up 42 percent from the third quarter of 2010. Sequentially, smartphone sales slowed to 7 percent growth from the second quarter of 2011 to the third quarter of 2011. Smartphone sales accounted for 26 percent of all mobile phone sales, growing only marginally from 25 percent in the previous quarter.

“Strong smartphone growth in China and Russia helped increase overall volumes in the quarter, but demand for smartphones stalled in advanced markets such as Western Europe and the U.S. as many users waited for new flagship devices featuring new versions of the key operating systems,” said Roberta Cozza, principal research analyst at Gartner. “Slowdowns also occurred in Latin America and the Middle East and Africa.”

“Some consumers held off upgrading in the third quarter because they were waiting for promotions on other new high-end models that were launched in the run-up to the fourth quarter holiday season,” Ms. Cozza said. “Other consumers were waiting for a rumored new iPhone and associated price cuts on older iPhone models; this affected U.S. sales particularly.”

Despite a drop in market share, Nokia continued to be the worldwide leader in mobile device sales as it accounted for 23.9 percent of global sales (see Table 1). The second quarter of 2011 was the low point for Nokia, and the third quarter brought signs of improvement. Dual-SIM phones in particular, and feature phones generally, maintained Nokia’s momentum in emerging markets. Heavy marketing from both Nokia and Microsoft to push the new Lumia devices should bring more improvement in the fourth quarter of 2011. However, a true turnaround won’t take place until the second half of 2012.

Table 1
Worldwide Mobile Device Sales to End Users by Vendor in 3Q11 (Thousands of Units)

Vendor	3Q11  Units	3Q11 Market Share (%)	3Q10  Units	3Q10 Market Share (%)
Nokia	105,353.5	23.9	117,461.0	28.2
Samsung	78,612.2	17.8	71,671.8	17.2
LG Electronics	21,014.6	4.8	27,478.7	6.6
Apple	17,295.3	3.9	13,484.4	3.2
ZTE	14,107.8	3.2	7,817.2	1.9
Research In Motion	12,701.1	2.9	12,508.3	3.0
HTC	12,099.9	2.7	6,494.3	1.6
Motorola	11,182.7	2.5	8,961.4	2.1
Huawei Device	10,668.2	2.4	5,478.1	1.3
Sony Ericsson	8,475.9	1.9	10,346.5	2.5
Others	148,990.9	33.8	135,384.1	32.5
Total	440,502.2	100	417,085.7	100

Source: Gartner (November 2011)

Samsung became the No. 1 smartphone manufacturer worldwide as sales to end users tripled year over year to reach 24 million; sell in was high as the channel built inventory. Samsung was the No. 1 smartphone manufacturer for the first time, ahead of Nokia in Western Europe and Asia. Gartner attributes this to the strong performance of Samsung’s Galaxy smartphones, which now cover a broad range of prices, and a weaker competitive market. Analysts expect more competition in the fourth quarter of 2011, not least because sales of the iPhone 4S, 4 and 3GS will capture share from Android manufacturers.

Apple shipped 17 million iPhones, an annual increase of 21 percent, but down nearly 3 million units from the second quarter of 2011 because of Apple’s new device announcement in October. Gartner believes Apple will bounce back in the fourth quarter because of its strongest ever preorders for the iPhone 4S in the first weekend after its announcement. Markets such as Brazil, Mexico, Russia and China are becoming more important to Apple, representing 16 percent of overall sales and showing that the iPhone has a place in emerging markets, especially now that the 3GS and 4 have received price cuts.

The Android OS accounted for 52.5 percent of smartphone sales to end users in the third quarter of 2011 (see Table 2), more than doubling its market share from the third quarter of 2010.

“Android benefited from more mass-market offerings, a weaker competitive environment and the lack of exciting new products on alternative operating systems such as Windows Phone 7 and RIM,” Ms. Cozza said. “Apple’s iOS market share suffered from delayed purchases as consumers waited for the new iPhone. Continued pressure is impacting RIM’s performance, and its smartphone share reached its lowest point so far in the U.S. market, where it dropped to 10 percent.”

Table 2
Worldwide Smartphone Sales to End Users by Operating System in 3Q11 (Thousands of Units)

Operating System	3Q11  Units	3Q11 Market Share (%)	3Q10  Units	3Q10 Market Share (%)
Android	60,490.4	52.5	20,544.0	25.3
Symbian	19,500.1	16.9	29,480.1	36.3
iOS	17,295.3	15.0	13,484.4	16.6
Research In Motion	12,701.1	11.0	12,508.3	15.4
Bada	2,478.5	2.2	920.6	1.1
Microsoft	1,701.9	1.5	2,203.9	2.7
Others	1,018.1	0.9	1,991.3	2.5
Total	115,185.4	100	81,132.6	100

Source: Gartner (November 2011)

More money is being spent purchasing music online than ever before according to a new report from Gartner. The firm’s data suggests that consumer spending on online music will reach $6.3 billion this year, up from $5.9 billion in 2010. “As consumers opt for connected devices — media tablets, smartphones and connected media players — across world regions, their desire for access to and consumption of music and content is growing as well,” Gartner research vice president Mike McGuire said. “The primary stakeholders in the music industry are facing wrenching changes and a somewhat uncertain future. However, the next four to five years portend solid growth.” Read on for more.

Subscription services will account for $532.1 million in end-user spending this year, and that figure is expected to grow to $808 million next year, no doubt spurred by the recent introduction of services such as Spotify, MOG and Rdio. A projected $3.62 billion will be spent on downloaded music and $2.17 million will be spent on “personalization services” this year.

Gartner said that growth rates are slowing in the United States, Western Europe, Asia/Pacific and Japan as the technology matures. The highest growth rates will occur in the Middle East, Africa and Latin America. “For music labels, artists and publishers, challenges abound,” McGuire said. “However, there remain real opportunities to reinvent the business based on consumers who are adopting connected devices and who are showing they will pay for content in multiple ways.” The full press release from Gartner follows below.

Gartner Says Worldwide Online Music Revenue from End-User Spending Is on Pace to Total $6.3 Billion in 2011

Online Music Subscription Services Will be Main Growth Sector in Evolving Market

STAMFORD, Conn., November 8, 2011—

Worldwide online music revenue from end-user spending is on pace to total $6.3 billion in 2011, up from $5.9 billion in 2010, according to Gartner, Inc. Online music revenue is forecast to reach $6.8 billion in 2012, and grow to $7.7 billion in 2015. By comparison, consumer spending on physical music (CDs and LPs) is expected to slide from approximately $15 billion in 2010 to about $10 billion in 2015.

“As consumers opt for connected devices — media tablets, smartphones and connected media players — across world regions, their desire for access to and consumption of music and content is growing as well,” said Mike McGuire, research vice president at Gartner. “Music labels, artists, publishers and new distribution intermediaries are developing new business models to address consumers’ changing behavior.

“The music industry was the first media sector to feel the full impact of two major forces — the Internet and technology-empowered consumers. It has staggered through the first decade of the 21st century, and entered the second bedraggled financially and facing a powerful set of intermediaries, which are creating borderless global ecosystems that defy the industry’s previous notions of control and monetization. The primary stakeholders in the music industry are facing wrenching changes and a somewhat uncertain future. However, the next four to five years portend solid growth.”

In the past 10 years, CD sales, the largest revenue stream for the industry, have eroded, while the online music revenue share is rapidly increasing. Digital downloads and streaming music services — referred to as subscription services — are the clear drivers in the online music industry for the coming years. Gartner estimates that subscription services will account for nearly one-third (29 percent) of end-user online music spending in 2015 (see Table 1).

Table 1. Online Music End-User Spending by Type of Service, Worldwide, 2008-2015 (Millions of Dollars)

	2011	2012	2015
Subscription Services	532.1	808.9	2,218.4
Download Services	3,629.8	3,847.4	4,050.3
Personalization Services	2,172.8	2,141.2	1,460.9
Total	6,334.7	6,797.6	7,729.6

Source: Gartner (October 2011)

As the shift from physical to digital music content quickens across the world, different regions are at different stages. Online music in North America is maturing, so the double-digit growth rates will be harder to maintain, and analysts expect to see solid, but flat, growth over the next five years. Western Europe, Asia/Pacific and Japan will see similar growth, while the highest growth rates will be in regions such as Latin America and the Middle East and Africa, which have not historically been strong markets for paying for tracks or albums from online services or stores.

As online distribution revenue starts to overtake physical revenue, which will happen beyond Gartner’s forecast to 2015, Gartner analysts said stakeholders in the music industry will continue to realign their businesses to maintain their places in the value chain. Consumers are likely to continue to take advantage of the applications, devices and services that provide them with multiple ways of discovering, consuming and communicating about music. As more music-related transactions, such as concert ticket sales and merchandise, have moved online, online music services, downloads or subscription services will have to find ways to make those related transactions available to their customers.

Mr. McGuire said the key issue that will affect the fortunes of many stakeholders in the music industry is how each sector addresses consumer data (specifically their behavior patterns), and how consumers find and share data about music and information. This issue will likely remain a point of contention among labels and artists and the online music services. Stakeholders will need to agree to broadly beneficial standards, such as extensions of OpenID, to minimize the number of times a consumer has to proffer an ID/password for multiple social media tools.

“For music labels, artists and publishers, challenges abound,” Mr. McGuire said. “However, there remain real opportunities to reinvent the business based on consumers who are adopting connected devices and who are showing they will pay for content in multiple ways. These sorts of changes offer the potential for many new types of service and business models aimed at allowing music fans to manage and access their music libraries while also integrating social media and content payment options.

“In particular, communications service providers (CSPs) should focus business development investigations into the potential for providing managed services options — such as cloud storage — as part of their consumer-facing services. However, CSPs must balance these potential opportunities with a careful examination of how any deployment addresses consumer concerns over privacy and ‘net neutrality’ issues,” said Stephanie Baghdassarian, research director at Gartner.

Additional information is available in the Gartner report “Media IAS Online Music Forecast, 2011-2015: Social Media, Subscriptions and the Cloud” at http://www.gartner.com/resId=1794215.

Apple’s wildly popular iPad 2 will have “free run” in the tablet market this holiday season according to market research firm Gartner. As many Apple competitors continue to spin their wheels, Gartner says global tablet sales are on pace to total 63.6 million units in 2011. Only 17.6 million consumer tablets were sold in 2010, and Apple accounted for the overwhelming majority of sales. The firm anticipates that Apple will account for 73.4% of tablets sold in 2011 — a figure that coincides with earlier estimates — and Gartner says Android will be a distant second in the tablet space this year. “We expect Apple to maintain a market share lead throughout our forecast period by commanding more than 50 percent of the market until 2014,” said Gartner VP Carolina Milanesi in a statement. “This is because Apple delivers a superior and unified user experience across its hardware, software and services. Unless competitors can respond with a similar approach, challenges to Apple’s position will be minimal.” Gartner’s full press release follows below.

Gartner Says Apple Will Have a Free Run in Tablet Market Holiday Season as Competitors Continue to Lag

Gartner Special Report Examines How Media Tablet Market Will Continue to Evolve

STAMFORD, Conn., September 22, 2011— Worldwide media tablet sales to end users are on pace to total 63.6 million units, a 261.4 percent increase from 2010 sales of 17.6 million units, according to Gartner, Inc. Media tablet sales will continue to experience strong growth through 2015 when sales are forecast to reach 326.3 million units.

Apple’s iPad is projected to account for 73.4 percent of worldwide media tablet sales in 2011, down from 83 percent share in 2010. Beyond Apple iOS and the Android operating system (OS), Gartner does not expect any other platforms to have more than 5 percent share of the tablet market in 2011.

“We expect Apple to maintain a market share lead throughout our forecast period by commanding more than 50 percent of the market until 2014,” Carolina Milanesi, research vice president at Gartner. “This is because Apple delivers a superior and unified user experience across its hardware, software and services. Unless competitors can respond with a similar approach, challenges to Apple’s position will be minimal. Apple had the foresight to create this market and in doing that planned for it as far as component supplies such as memory and screen. This allowed Apple to bring the iPad out at a very competitive price and no compromise in experience among the different models that offer storage and connectivity options.”

Android tablets are on pace to ship 11 million units in 2011 (see Table 1), accounting for 17.3 percent of media tablet sales. This is up only slightly from Android’s 2010 market share of 14.3 percent. Gartner’s forecast for the Android OS has been lowered by 28 percent from last quarter’s projection. The reduction would have been greater had it not been for the success of lower-end tablets in Asia, and the expectations around the launch of Amazon’s tablet.

“So far, Android’s appeal in the tablet market has been constrained by high prices, weak user interface and limited tablet applications” Ms. Milanesi said. “Google will address the fragmentation of Android across smartphone and tablet form factors within the next Android release, known as ‘Ice Cream Sandwich,’ which we expect to see in the fourth quarter of 2011. Android can count on strong support from key OEMs, has a sizeable developer community, and its smartphones application ecosystem is second only to Apple’s.”

Table 1
Worldwide Sales of Media Tablets to End Users by OS (Thousands of Units)

OS	2010	2011	2012	2015
Android	2,512	11,020	22,875	116,444
iOS	14,685	46,697	69,025	148,674
MeeGo	179	476	490	197
Microsoft	0	0	4,348	34,435
QNX	0	3,016	6,274	26,123
WebOS	0	2,053	0	0
Other Operating Systems	235	375	467	431
Total Market	17,610	63,637	103,479	326,304

Source: Gartner (September 2011)

Gartner analysts said Research In Motion’s QNX OS is a promising platform, but it is still in the early stages of development. RIM’s main challenge will be to attract more support from application developers as the company is going through a tough period, with considerable pressure on its smartphone business.

The current buzz around Windows 8 driven by the demonstrations seen at the Build conference might be short-lived if Microsoft’s push to use the new OS across devices comes at a compromise in usability. Moreover, the late arrival might limit its appeal, especially to consumers, as Apple and Android will be more entrenched by then. Microsoft’s platform will find its biggest opportunities in the enterprise segment, where IT departments could benefit from smoother integration with existing Microsoft software.

As more vendors will arrive in 2012, Gartner analysts said it’s important they concentrate on delivering a rich user experience based on a strong tie between smartphones and tablets, a good set of apps, an intuitive user interface, and the ability to share content easily between devices.

“Most of Apple’s competitors are struggling to meet Apple’s prices without considerably sacrificing margins. Screen quality and processing power are the two hardware features that vendors cannot afford to compromise on,” said Roberta Cozza, principal analyst at Gartner. “They should consider everything else ‘nice to have,’ rather than essential, in order to keep bills-of-materials costs competitive with those of the iPad.”

Additional information is in the Gartner report “Competitive Landscape: Media Tablets” at http://www.gartner.com/resId=1793120, and “Forecast: Media Tablets by Operating System, Worldwide, 2008-2015, 3Q11 Update” athttp://www.gartner.com/resId=1794315.

Gartner released a report on Friday that suggested Google’s Gmail solution is ready to take on Microsoft in the enterprise email arena despite having just a tiny fraction of the market. “While Gmail’s enterprise email market share currently hovers around 1 percent, it has close to half of the market for enterprise cloud email,” Gartner research vice president Matthew Cain said. “While cloud email is still in its infancy, at 3 percent to 4 percent of the overall enterprise email market, we expect it to be a growth industry, reaching 20 percent of the market by year-end 2016, and 55 percent by year-end 2020,” Cain added, noting that Gmail should “now be considered a mainstream cloud email supplier.” Microsoft Exchange and Gmail are the only two services that have gained momentum during the past few years while other solutions, such as Novell GroupWise and IBM Lotus Notes/Domino have started to fade out. Cain said that companies should consider splitting their email services between the cloud and on-premises servers which, for now, “plays to Microsoft’s strengths.” Gartner also suggested the Google/Microsoft rivalry will make it tougher for other competitors to enter the industry. Gartner’s full press release follows after the break.

Gartner Says Google Gmail is Now a Viable Alternative to Microsoft in the Enterprise Email Market

Outlook for Cloud Email to Be Discussed at Gartner Symposium/ITxpo

STAMFORD, Conn., September 16, 2011—  After being in the market for five years, Google’s enterprise Gmail is building momentum with commercial organizations with more than 5,000 seats, and it now presents a viable alternative to Microsoft Exchange Online and other cloud email services, according to Gartner, Inc.

“The road to its enterprise enlightenment has been long and bumpy, but Gmail should now be considered a mainstream cloud email supplier,” said Matthew Cain, research vice president at Gartner. “While Gmail’s enterprise email market share currently hovers around 1 percent, it has close to half of the market for enterprise cloud email. While cloud email is still in its infancy, at 3 percent to 4 percent of the overall enterprise email market, we expect it to be a growth industry, reaching 20 percent of the market by year-end 2016, and 55 percent by year-end 2020.”

Mr. Cain said that, other than Microsoft Exchange, Google Gmail is the only email system that has prospered in the enterprise space over the past several years. Other enterprise email providers — Novell GroupWise and IBM Lotus Notes/Domino — have lost market momentum, Cisco closed its cloud email effort and VMware’s Zimbra is only now refocusing on the enterprise space.

Google’s journey to enterprise enlightenment, however, is not complete. Google focuses on capabilities that will have the broadest market uptake. Large organizations with complex email requirements, such as financial institutions, report that Google is resistant to feature requests that would be applicable to only a small segment of its customers. Banks, for example, may require surveillance capabilities that Google is unlikely to build into Gmail given the limited appeal.

While Google is good at taking direction and input on front-end features, it is more resistant to the back-end feature requests that are important to larger enterprises. Large system integrators and enterprises report that Google’s lack of transparency in areas such as continuity, security and compliance can thwart deeper relationships.

“Email is not a commodity, and cloud email is still maturing,” Mr. Cain said. “We believe that, for most organizations, performing one more on-premises upgrade, which will take an organization through 2014, is the most prudent approach. A less-risky approach to cloud email is via a hybrid deployment, where some mailboxes live in the cloud and some are located on premises. This hybrid model plays to Microsoft’s strengths given its vast dominance of the on-premises email market.”

“The intense competition between Microsoft and Google will make both vendors stronger and enable them to apply cloud expertise to other enterprise cloud endeavors,” Mr. Cain said. “The rivalry will make it difficult for other suppliers to compete directly in the cloud email and collaboration space.”

Additional information is available in the Gartner report “Google Gmail Emerges as a Significant Threat to Microsoft in the Enterprise” at http://www.gartner.com/resId=1770424.

Mr. Cain will provide additional analysis on the cloud email at the Gartner Symposium/ITxpo.

According to research reports from Gartner and IDC, Microsoft’s Windows Phone operating system will grab about 20% of the smartphone market by 2015, enough to propel the OS past Apple’s iOS platform to take the No. 2 spot globally. Research firm Gartner believes Android will have a 49% market share in 2015, followed by Windows Phone at 19.5%, and Apple’s iOS growth will slow so much that it will only maintain a 17% share. IDC believes Windows Phone will have a 20.3 percent share in 2015. During the IFA trade show in Berlin on Friday, Windows Phone marketing head Achim Berg told Bloomberg those Windows Phone growth estimates are conservative. “This is a completely new platform, it takes time,” Berg said. “It took time with Android, it took time with Apple. We have to show that we’re very capable and that we have the fastest and easiest phone.” Gartner suggests Windows Phone’s growth is expected to surge thanks to help from big-name manufacturers such as HTC. Read on for more, including a statement from HTC’s president of Europe, the Middle East and Africa.

“We’re seeing an extremely positive response [to the operating system],” HTC’s Europe, Middle East and Africa president Florian Seiche told Bloomberg. “We’re now thinking that this year is a great time to get that momentum accelerated, to reach out to a broader group of customers.” HTC revealed its latest Windows Phone Mango handsets, the Radar and Titan, on September 1st. The analyses from IDC and Gartner aren’t the only such reports that project explosive growth for Microsoft’s emerging mobile platform. Pyramid Research is even more bullish on the OS, having said in May that Windows Phone will surpass Android’s market share as soon as 2013.

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Gartner on Thursday issued its global mobile phone sales data for the second quarter, which shows that the industry grew 16.5% from the same quarter last year, to 428.7 million units. Smartphone sales jumped 74% year-on-year, with 107.7 million smartphones having been sold to end users around the world. “Smartphone sales continued to rise at the expense of feature phones,” said Roberta Cozza, principal research analyst at Gartner, in a statement. “Consumers in mature markets are choosing entry-level and midrange Android smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions.” Android was the top smartphone operating system in the second quarter with a market share of 43.4% and unit sales totaling 46.78 million devices, and Symbian’s 23.85 million devices secured it a No. 2 position with 22.1% of the smartphone OS market. Apple’s iOS held 18.2% of the smartphone market last quarter, followed by RIM’s BlackBerry OS at 11.7%, Samsung’s Bada OS at 1.9% and Microsoft mobile platforms at 1.6%. Gartner also said Nokia was the world’s top smartphone vendor in the second quarter, though it did not provide data to support this claim in its press release, which follows below.

Gartner Says Sales of Mobile Devices in Second Quarter of 2011 Grew 16.5 Percent Year-on-Year; Smartphone Sales Grew 74 Percent

ZTE Became Fifth-Largest Mobile Phone Manufacturer and RIM Dropped to No. 6

Egham, UK, August 11, 2011—

Worldwide sales of mobile devices to end users totaled 428.7 million units in the second quarter of 2011, a 16.5 percent increase from the second quarter of 2010, according to Gartner, Inc. (see Table 1).

The channel built up stock at the end of the first quarter of 2011 in preparation of possible component shortages following the Japanese earthquake. As a result, sell-in demand slowed in the second quarter of 2011 to 421.1 million units, a 4.4 percent decrease from the previous quarter.

Sales of smartphones were up 74 percent year-on-year and accounted for 25 percent of overall sales in the second quarter of 2011, up from 17 percent in the second quarter of 2010.

“Smartphone sales continued to rise at the expense of feature phones,” said Roberta Cozza, principal research analyst at Gartner. “Consumers in mature markets are choosing entry-level and midrange Android smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions.” However, replacement sales in Western Europe showed signs of fatigue as smartphone sales declined quarter-on-quarter.

Table 1
Worldwide Mobile Device Sales to End Users by Vendor in 2Q11 (Thousands of Units)

Vendor	2Q11 Units	2Q11 Market Share (%)	2Q10 Units	2Q10 Market Share (%)
Nokia	97,869.3	22.8	111,473.7	30.3
Samsung	69,827.6	16.3	65,328.2	17.8
LG	24,420.8	5.7	29,366.7	8.0
Apple	19,628.8	4.6	8,743.0	2.4
ZTE	13,070.2	3.0	6,730.6	1.8
Research In Motion	12,652.3	3.0	11,628.8	3.2
HTC	11,016.1	2.6	5,908.8	1.6
Motorola	10,221.4	2.4	9,109.4	2.5
Huawei Device	9,026.1	2.1	5,276.4	1.4
Sony Ericsson	7,266.5	1.7	11,008.5	3.0
Others	153,662.1	35.8	103,412.6	28.1
Total	428,661.2	100.0	367,986.7	100.0

Source: Gartner (August 2011)

In smartphones, Nokia’s sales into the channel in the second quarter of 2011 were low. This was partly due to a very competitive market that deflated demand for Symbian, but also to inventory management issues in Europe and China in particular. The channel bought less and worked hard to reduce stock levels, partly by cutting prices on older products. These factors reduced Nokia’s average selling price for smartphones, compared to the first quarter of 2011. “The sales efforts of the channel, combined with Nokia’s greater concentration in retail and distributors’ sales, saw Nokia destock more than 9 million units overall and 5 million smartphones, helping it hold on to its position as the leading smartphone manufacturer by volume,” said Ms. Cozza. “However, we will not see a repeat of this performance in the third quarter of 2011, as Nokia’s channel is pretty lean.”

Samsung achieved strong growth in sales of mobile devices. For example, the Galaxy S II sold well, and this model went on to chalk up 5 million sales by the end of July. A strong performance in the smartphone market helped Samsung increase its market share, to become the third-largest smartphone vendor. However, its overall share dropped year-on-year, and grew only marginally quarter-on-quarter, mainly due to Samsung’s weaker presence in more price-sensitive market segments.

Apple continued to exceed expectations, even though the iPhone 4 will soon be replaced by a new model. Part of its growth came from the 42 new carriers and 15 new countries that it entered in the second quarter of 2011, which brought its total coverage to 100 countries. This expansion caused its inventory to grow a little by the end of the second quarter of 2011, when sales to end users stood at 19.6 million units. In mainland China, Apple is the seventh-largest mobile phone vendor and the third-largest smartphone vendor.

Research In Motion’s (RIM’s) share of the smartphone market declined to 12 percent in the second quarter of 2011, from 19 percent a year ago. Also, the company lost its No. 5 position in the worldwide ranking of mobile device vendors to ZTE. Demand for RIM’s devices in the second quarter was impaired by an ageing portfolio and delays in shipping products. In the coming quarters RIM will have to deal with increased competition to its messaging offering and manage a platform migration from BlackBerry 7 to QNX.

Google and Apple are the obvious winners in the smartphone ecosystem. The combined share of iOS and Android in the smartphone operating system (OS) market doubled to nearly 62 percent in the second quarter of 2011, up from just over 31 percent in the corresponding period of 2010 (see Table 2). Gartner analysts observed that these two OSs have the usability that consumers enjoy, the apps that consumers feel they need, and increasingly a portfolio of services delivered by the platform owner as well.

Table 2
Worldwide Smartphone Sales to End Users by Operating System in 2Q11 (Thousands of Units)

Operating System	2Q11 Units	2Q11 Market Share (%)	2Q10 Units	2Q10 Market Share (%)
Android	46,775.9	43.4	10,652.7	17.2
Symbian	23,853.2	22.1	25,386.8	40.9
iOS	19,628.8	18.2	8,743.0	14.1
Research In Motion	12,652.3	11.7	11,628.8	18.7
Bada	2,055.8	1.9	577.0	0.9
Microsoft	1,723.8	1.6	3,058.8	4.9
Others	1,050.6	1.0	2,010.9	3.2
Total	107,740.4	100.0	62,058.1	100.0

Source: Gartner (August 2011)

“We expect manufacturers and distributors to remain cautious about raising their stock levels in the second half of 2011, following the recent uncertainty on the world financial markets,” said Annette Zimmermann, principal research analyst at Gartner. Gartner expects sales of mobile devices to grow around 12 percent in 2011.

For more information, see the Gartner report “Market Share: Mobile Communication Devices by Region and Country, 2Q11” which is available on Gartner’s website at http://www.gartner.com/resId=1764117.

Mobile data connections are poised grow 11% in 2011, driving global mobile data revenue to $314.7 billion. Market research firm Gartner on Thursday said mobile data connections will reach 5.6 billion this year compared to 5 billion in 2010, driving global revenue from mobile data up 22.5% from the $257 billion earned last year. “Mobile data traffic will increase significantly as more people will have access to mobile data networks, there is a migration toward smartphones and an increase in sales of media tablets,” said Gartner analyst Jessica Ekholm in a statement. “Mobile data volumes will continue to grow as mobile data networks become faster and more ubiquitous, while at the same time the number of data users and data usage per user is expected to grow.” Gartner sees global mobile data connections growing steadily over the next few years, reaching 7.4 billion in 2015 creating $552 billion in revenue. Preparing networks for this growth is something carriers need to focus on. “What carriers currently need are innovative ways to increase data revenue while finding smart solutions to manage a growing demand in data,” said Gartner research director Sylvain Fabre. “Ultimately, it will be the consumer who chooses the content he or she wants to use, and carriers need to ensure that the quality of experience is good. A substandard user experience may lead to higher churn.” Gartner’s full press release follows below.

Gartner Says Worldwide Mobile Connections Will Reach 5.6 Billion in 2011 as Mobile Data Services Revenue Totals $314.7 Billion

STAMFORD, Conn., August 4, 2011—

Worldwide mobile connections will reach 5.6 billion in 2011, up 11 percent from 5 billion connections in 2010, according to Gartner, Inc. Mobile data services revenue will total $314.7 billion in 2011, a 22.5 percent increase from 2010 revenue of $257 billion.

“Mobile data traffic will increase significantly as more people will have access to mobile data networks, there is a migration toward smartphones and an increase in sales of media tablets,” said Jessica Ekholm, principal research analyst at Gartner. “Mobile data volumes will continue to grow as mobile data networks become faster and more ubiquitous, while at the same time the number of data users and data usage per user is expected to grow.”

“Data revenue will continue to grow but at a much slower rate,” Ms. Ekholm said. “This is causing a decoupling between revenue and data traffic, and it is also creating an increase in network costs for carriers as they try to sustain growing data traffic.”

Worldwide mobile connections will experience steady growth through 2015 when mobile connections are forecast to reach 7.4 billion, and mobile data revenue will reach $552 billion.

In calculating its forecast, Gartner assumed there are four major mobile data traffic drivers: growth in the number of mobile connections, increasing availability of higher-speed data-centric mobile networks, smartphones, and data-consuming content and applications.

A growing number of mobile connections will lead to higher demands on communication service providers’ (CSPs’) data networks as more people access the networks to use mobile data and to send text messages. In addition to the total number of connections growing, Gartner also expects that mobile data usage per connection will increase throughout the forecast period and that there will be a shift in mobile users’ perception of mobile data around the world, as data plans go from being seen as a luxury, to being considered a nice-to-have service, to finally being perceived as potentially essential.

Gartner expects communications service providers (CSPs) to increasingly start moving toward offering more flexible and more personalized data plans, which should help capture a larger mobile data user base. CSPs have also upgraded their networks by offering faster download and upload speeds to consumers, which have helped improve the general perception of data quality and thus led to increased data uptake.

“What carriers currently need are innovative ways to increase data revenue while finding smart solutions to manage a growing demand in data,” said Sylvain Fabre, research director at Gartner. “Ultimately, it will be the consumer who chooses the content he or she wants to use, and carriers need to ensure that the quality of experience is good. A substandard user experience may lead to higher churn.”

Gartner analysts said carriers should investigate the pros and the cons of more customized pricing plans, such as tiered pricing, a la carte and usage-based plans, carefully weighing additional costs and future benefits. Additionally, CSPs should look to offer increased flexibility in pricing and introduce add-on pricing models, in which users are able to add data access when they want to. These add-on pricing models could include paying for additional usage and additional speed, and charging a fee for voice over Internet Protocol (VoIP) or for gaming.

“Carriers should focus on increasing the level of clarity and the transparency of their mobile data contracts in order to make the majority of customers feel more at ease in using data services. This is particularly important when it comes to data roaming,” Ms. Ekholm said. “Offering clients various ways of being able to track and monitor their data usage would help carriers receive a larger amount of revenue from more profitable lower-usage, medium-pay users.”

Additional information is available in the Gartner report “Forecast: Mobile Data Traffic and Revenue, Worldwide, 2010-2015″ at http://www.gartner.com/resId=1737114.

Market research firms Gartner and IDC have both released preliminary data for global PC sales in the second quarter of 2011, and the reports paint a much improved picture compared to the first quarter of the year. Lenovo was the biggest winner globally in terms of growth according to Gartner, having shipped 10.23 million PCs for a 12% share of the market. The China-based vendor’s PC market share grew a whopping 22.5% compared to the same quarter a year prior, and Lenovo now finds itself in the No. 3 spot globally. HP was still the top vendor with shipments totaling 14.89 million units, and Dell remained in the No. 2 spot with 10.62 million units shipped. Acer and ASUS rounded out the top-5 with 9.30 million units and 4.47 million units, respectively. Though Apple’s operating system share continued to climb last month, the firm still doesn’t sell enough units to bump it from the “Others” category on Gartner’s global table. In the U.S., however, Apple showed the biggest market share gains last quarter with 8.5% growth over the same quarter last year. While IDC’s numbers vary compared to Gartner’s, the end results are the same. IDC has Lenovo’s global growth pegged at 22.9% over the second quarter last year, and it shows that Apple grew even faster than Gartner estimates with 14.7% growth in the U.S. compared to the same quarter a year prior. The two firms agree that Acer was the biggest loser globally. Acer’s share of the worldwide PC market was down 20.4% from the second quarter of 2010 according to Gartner, and down a less alarming 10.1% according to IDC. Taiwan-based Acer was the biggest loser in the U.S. as well, as its share was down 22.6% year-over-year according to Gartner and 25.4% according to IDC. Full press releases from both firms follow below.

Gartner Says Worldwide PC Shipments Increased 2.3 Percent in Second Quarter of 2011

STAMFORD, Conn., July 13, 2011—

Worldwide PC shipments surpassed 85.2 million units in the second quarter of 2011, a 2.3 percent increase from the same period last year, according to preliminary results by Gartner, Inc. These results are below Gartner’s earlier projection for 6.7 percent growth.

“After strong growth in shipments of consumer PCs for four years, driven by strong demand for mini-notebooks and low-priced consumer notebooks, the market is shifting to modest, but steady growth, said Mikako Kitagawa, principal analyst at Gartner. “The slow overall growth indicates that the PC market is still in a period of adjustment, which began in the second half of 2010.”

“Vendor’s performances have become variable as they have had to deal with significant inventory buildup, changes to their product mix, and the fact that growth has been coming mostly from emerging markets. Vendors are having to shift resources away from mature consumer markets. They are also invested in developing media tablets, many of which launched in the first half of 2011.”

HP continued to be the worldwide leader, as it accounted for 17.5 percent of worldwide PC shipments in the second quarter of 2011 (see Table 1). The company performed better than average in most regions, but it was pulled down by its performance in Asia/Pacific. Globally, HP achieved solid growth in the professional PC market, but it continued to face challenges in the consumer segment.

Table1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q11 (Units)

Company	2Q11 Shipments	2Q11 Market Share (%)	2Q10 Shipments	2Q10 Market Share (%)	2Q10-2Q11 Growth (%)
HP	14,888,086	17.5	14,454,971	17.4	3.0
Dell	10,621,436	12.5	10,283,074	12.3	3.3
Lenovo	10,225,358	12.0	8,349,272	10.0	22.5
Acer	9,298,989	10.9	11,689,255	14.0	-20.4
Asus	4,467,611	5.2	4,306,241	5.2	3.7
Toshiba	4,411,400	5.2	4,497,576	5.4	-1.9
Others	31,306,987	36.7	29,732,493	35.7	5.3
Total	85,219,865	100.0	83,312,882	100.0	2.3

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablets such as the iPad. Final estimates will be subject to change.
Source: Gartner (July 2011)

Dell moved into second place in the worldwide PC market for the first time since the fourth quarter of 2008. Dell did well in Asia/Pacific, where it has invested heavily lately. Professional PC refreshments definitely boosted Dell’s growth. Lenovo experienced the strongest growth among the top-tier vendors, as shipments increased 22.5 percent. Lenovo achieved strong growth in Asia/Pacific, the U.S. and Latin America with both desktop and mobile PCs.

Acer dropped from No. 2 to the No. 4 position in the worldwide PC market in the second quarter of 2011. It had a great deal of inventory in the distribution channel in the Europe, Middle East and Africa (EMEA) region. Acer’s problems stemmed from its low-price, high-volume business model, which is no longer effective.

In the U.S., PC shipments totaled 16.9 million units in the second quarter of 2011, a 5.6 percent decline from the second quarter of 2010. The major inhibitor was clearly a weak consumer PC market.

“Given the hype around media tablets such as the iPad, retailers were very conservative in placing orders for PCs. Instead, they wanted to secure space for media tablets. Some PC vendors had to lower their inventory through promotions, while others slimmed their product lines at retailers,” Ms. Kitagawa said.

“The professional PC sector was the bright spot in the U.S. market,” Ms. Kitagawa said. “Large enterprises were in the middle of their refreshment purchase period, which started last year. Small and midsize businesses (SMBs) were also at the peak of their refreshment periods. Due to budgetary constraints, the public sector had a slow start in the second quarter of 2011, even though the second quarter is typically a period of high PC sales.”

Based on preliminary results, Apple showed the strongest growth among the top-tier vendors in the U.S., as it climbed from fifth place to third, overtaking Acer and Toshiba (see Table 2). The preliminary findings show Apple’s performance far exceed the industry average, partly driven by an iMac refreshment that attracted both consumers and buyers in the education sector.

Table 2
Preliminary United States PC Vendor Unit Shipment Estimates for 2Q11 (Units)

Company	2Q11 Shipments	2Q11 Market Share (%)	2Q10 Shipments	2Q10 Market Share (%)	2Q11-2Q10 Growth (%)
HP	4,552,777	26.9	4,608,280	25.7	-1.2
Dell	3,821,759	22.6	4,236,303	23.6	-9.8
Apple	1,814,000	10.7	1,671,500	9.3	8.5
Toshiba	1,616,400	9.6	1,565,000	8.7	3.3
Acer	1,570,257	9.3	2,028,284	11.3	-22.6
Others	3,539,666	20.9	3,803,974	21.2	-6.9
Total	16,914,859	100.0	17,913,341	100.0	-5.6

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablet such as the iPad. Final estimates will be subject to change.
Source: Gartner (July 2011)

PC shipments in EMEA totaled 23.1 million units in the second quarter of 2011, a 4.8 percent decline from the second quarter of 2010 (see Table 3).

Table 3

Preliminary EMEA PC Vendor Unit Shipment Estimates for 2Q11 (Units)

Company	2Q11 Shipments	2Q11 Market Share (%)	2Q10 Shipments	2Q10 Market Share (%)	2Q11-2Q10 Growth (%)
	4,930,934	21.4	4,757,512	19.6	3.6
Acer	3,255,000	14.1	5,001,106	20.6	-34.9
Dell	2,416,497	10.5	2,217,815	9.2	9.0
Asus	2,005,809	8.7	2,054,264	8.5	-2.4
Lenovo	1,333,857	5.8	1,299,758	5.4	2.6
Others	9,128,114	39.6	8,901,074	36.7	2.6
Total	23,070,211	100.0	24,231,529	100.0	-4.8

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablet such as the iPad. Final estimates will be subject to change.

Source: Gartner (July 2011)

“For the second consecutive quarter the PC market in EMEA showed decline,” said Ranjit Atwal, research director at Gartner. “The PC market in the region remained weak due to slow consumer demand and lower sell-in with PC shipments. In addition, high inventory adjustments by Acer worsened the downside view of the market.

The impact of the Acer inventory clearance saw Acer shipments decline 34.9 percent year-on-year, as some 3 million mobile PCs were cleared out of distribution. Acer’s weak performance contributed nearly 55 percent to the decline of the EMEA PC market in the second half of 2011. “If we remove Acer, the EMEA PC market would have showed a 3 percent growth year-on-year,” said Mr. Atwal. “While this may be an impractical view of the market, it is important to separate supply issues of one vendor against the general trends in the market.”

Demand in the professional PC market has picked up as organizations released budgets to migrate aging PCs to Windows 7. Dell in particular seemed to benefit from this upturn in the professional market.

Acer and Asus were the only vendors of the top five vendors ranking to show decline in shipments and market share in the second quarter of 2011. HP retained the No. 1 spot with encouraging growth in the professional PC market. Lenovo’s takeover of Medion did not have any impact on the overall results this quarter but the professional market bolstered the vendor’s growth. Overall shipments of media tablets took place late this quarter and volumes remained low, minimizing any impact of the media tablets for PC substitutions in the second quarter of 2011.

“There is no doubt that the continued weak consumer demand within Western Europe and economic issues in Southern Europe had some impact on consumer confidence across Western Europe,” said Mr. Atwal. “The feedback from retail channels remained pessimistic, especially in most of Southern Europe, with only France and Germany reporting stronger end-of-quarter shipments as channels cleaned out inventory.” Overall growth in the Central and Eastern Europe and the Middle East and Africa markets could not compensate for the weak shipments in Western Europe.

In Asia/Pacific, PC shipments reached 30.5 million units in the second quarter of 2011, a 9.6 percent increase from the same period last year. The PC market continued to grow moderately, cushioned from the volatility in other regions. However, individual market performances were mixed, with indications of channel inventory issues and delivery postponements in some Southeast Asian countries. India showed weaker-than-expected consumer demand, while China’s PC market grew 10.9 percent year over year. China’s growth was attributed to the release of pent-up demand for consumer PCs.

The PC market in Latin America grew 15 percent in the second quarter of 2011, as shipments totaled 9.2 million units. Concerns over Brazil’s overheating economy are abating with news that the country’s gross domestic product (GDP) for the first quarter of 2011 grew by 1.3 percent. Inflation in May was down from the previous seven months. Able Brazilian PC vendors are trying to expand in response to increased foreign competition. Local vendors are looking to make up for lost growth in their home country by entering foreign markets where multinational PC vendors are unlikely to venture.

PC shipments in Japan grew 5.5 percent in the second quarter of 2011, with shipments reaching 3.9 million units. The biggest contributor to growth in the professional market in the second quarter of 2011 was a supply-side factor. Many of the shipments in the second quarter had been postponed from March due to the earthquake and tsunami. In the consumer segment, demand for PCs to replace desktop PCs was the main driver of growth. All-in-one desktops and notebooks with large screens sold well at retail stores.

These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. Additional research can be found on the Computing Hardware section on Gartner’s website at http://www.gartner.com/it/products/research/asset_129157_2395.jsp.

PC Market Returns to Positive Growth in Line with Expectations, Though Gains Remain Small, According to IDC

FRAMINGHAM, Mass., July 13, 2011 – Worldwide PC shipments increased 2.6% in the second quarter of 2011 (2Q11), according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. The results are just short of IDC’s May projections for 2.9% growth and represent a combination of a hangover from the more than 20% growth in the first half of 2010 as well as competition from smartphones, other consumer products and pressure from lackluster economic conditions. As in 1Q11, the United States and Western Europe were among the weaker regions, reflecting constrained demand in more mature markets, while emerging regions – particularly Latin America and Asia/Pacific (excluding Japan) – fared better.

“These preliminary results continue to reflect pressure from competing consumer and business products as well as cautious spending,” said Jay Chou, senior research analyst with IDC’s Worldwide Quarterly PC Tracker. “Nevertheless, product refreshes and promotions in the second half of the year as well as easier year-ago data should boost growth in the second half of the year.”

“The U.S. PC market continued to contract in 2Q11, largely as a result of three factors. The first is an ongoing contraction in the Mini Notebook (Netbook) market and related inventories. The second is the impact of 2Q10′s difficult-to-sustain 12% growth. And third, demand has softened as corporate buyers continue to focus on increasing share of their IT budget in new IT solutions such as cloud and virtualization, and consumer interest shifts to media tablets,” says Rajani Singh, research analyst, United States Quarterly PC Tracker. “Given the weakness of 2H10, we expect a better market environment in 2H11 with mid-single digit growth rates in the third quarter’s back to school and fourth quarter’s holiday season.”

Regional Outlook

• United States – With a decline of 4.2% year over year, the market was still downcast from a combination of exuberant consumption a year ago and a tenuous economic recovery, but the quarter also marked substantial growth from 1Q11, and total shipments topped over 17.8 million.

• Europe, Middle East, Africa (EMEA) – The EMEA PC market continued to contract in 2Q11, in line with IDC’s forecast, as sustained high levels of inventory prevented stronger sell-in, particularly in Western Europe, where budget cannibalization from media tablets and smartphones continued to contribute to weak consumer demand and slow stock depletion. However, Central and Eastern Europe (CEE) and the Middle East and Africa (MEA) continued to expand and enjoyed positive growth overall.

• Japan – The impact of the earthquake on PC buying proved to be limited, thus the market produced stronger results than expected, with 3% growth. Many commercial projects commenced as earlier fears of inventory shortage did not materialize. Coupled with continued average selling price (ASP) declines since the beginning of 2011, consumer shipments also fared better than expected.

• Asia/Pacific (excluding Japan) – returned to double-digit growth of just over 12% as the market came in slightly above forecasts. A weak consumer market weighed down India, but other key markets like China continued their momentum to help offset this, despite the ongoing inflation challenges there.

Vendor Outlook -

• HP grew 3% compared to the second quarter of 2010. The vendor saw good growth in key emerging markets and also EMEA, but also had a slight drop in volume compared to the previous quarter.

• Dell saw growth of 2.8% worldwide. It managed to slow the pace of declines in key markets compared to the first quarter, with good gains in key emerging markets.

• Lenovo outpaced Acer Group to become the number 3 vendor worldwide. It continued to reap the results of its channel expansion in markets outside of Asia/Pacific, garnering notable gains in the U.S. and Japan. All regions saw positive growth and total volume increased by nearly 23% on the year.

• Acer shipments continued to decline from a year ago, but at a slower pace than in the first quarter as the company was affected by a review of inventory handling, as well uncertainties from its recent management shake-up.

• ASUS grew 6% to overtake Toshiba for the number 5 spot. While the vendor has had some difficulties adjusting for the decline in Mini Notebook PCs, it mainstream notebooks did well, especially in emerging markets.

Top 5 Vendors, Worldwide PC Shipments, Second Quarter 2011 (Preliminary)

(Units Shipments are in thousands)

Rank	Vendor	2Q11 Shipments	Market Share	2Q10 Shipments	Market Share	2Q11/2Q10 Growth
1	HP	15,263	18.1%	14,823	18.0%	3.0%
2	Dell	10,927	12.9%	10,626	12.9%	2.8%
3	Lenovo	10,276	12.2%	8,363	10.2%	22.9%
4	Acer Group	9,160	10.9%	10,190	12.4%	-10.1%
5	ASUS	4,468	5.3%	4,216	5.1%	6.0%
	Others	34,320	40.7%	34,070	41.4%	0.7%
	All Vendors	84,413	100.0%	82,289	100.0%	2.6%

Source: IDC Worldwide Quarterly PC Tracker, July 13, 2011

Table notes follow the last table

Top 5 Vendors, United States PC Shipments, Second Quarter 2011 (Preliminary)

(Units Shipments are in thousands)

Rank	Vendor	2Q11 Shipments	Market Share	2Q10 Shipments	Market Share	2Q11/2Q10 Growth
1	HP	4,692	26.3%	4,721	25.3%	-0.6%
2	Dell	3,959	22.2%	4,408	23.7%	-10.2%
3	Apple	1,917	10.7%	1,671	9.0%	14.7%
4	Toshiba	1,617	9.1%	1,560	8.4%	3.7%
5	Acer Group	1,513	8.5%	2,028	10.9%	-25.4%
	Others	4,159	23.3%	4,243	22.8%	-2.0%
	All Vendors	17,857	100.0%	18,632	100.0%	-4.2%

Source: IDC Worldwide Quarterly PC Tracker, July 13, 2011

Table Notes:

• Some IDC estimates prior to financial earnings reports.
• Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.

PCs include Desktops, Portables, Mini Notebooks and do not include handhelds, x86 Servers and Media Tablets (i.e. iPad and Android-based Tablets). Data for all vendors are reported for calendar periods.

Gartner Says Spending on Gaming to Exceed $74 Billion in 2011

Gaming Software Spending Dominates but Online Gaming Growing Fastest Over the Next Five Years

Egham, UK, July 5, 2011— 

The gaming ecosystem is undergoing major technology and business model transitions that will last beyond 2015. Gartner, Inc. estimates that worldwide spending on the gaming ecosystem* will exceed $74 billion in 2011, up 10.4 percent from 2010 spending of $67 billion. By 2015, spending will reach $112 billion.

Overall, Gartner estimates that the gaming software component will represent $44.7 billion in 2011, and it will continue to dominate the overall gaming market in the next five years as it absorbs almost two-thirds of consumers’ gaming budgets.

“This large market size means that many consumers embrace gaming as a core piece of their entertainment budget and will continue to play as long as game publishers deliver compelling and fun games,” said Fabrizio Biscotti, research director at Gartner.

In 2011, the gaming software spending will be followed at a distance by gaming hardware and online gaming, reaching $17.8 billion and $11.9 billion, respectively (see Table 1).

Table 1: Total Gaming Market Spending, 2010-2015 (Millions of Dollars)

	2011	2013	2015
Gaming Hardware	17,797	24,621	27,354
Gaming Software	44,730	51,129	56,512
Online Gaming	11,899	21,453	28,298
Total	74,426	97,204	112,163

Source: Gartner (June 2011)

Within the gaming software market, mobile gaming will experience the largest growth opportunity with its share growing from 15 percent in 2010 to 20 percent in 2015.

“As the popularity of smartphones and tablets continues to expand, gaming will remain a key component in the use of these devices. Although they are never used primarily for gaming, mobile games are the most downloaded application category across most application stores,” said Tuong Nguyen, principal research analyst at Gartner. “For this reason, mobile gaming will continue to thrive as more consumers expand their use of new and innovative portable connected devices.”

The segment that will drive the largest revenue will come from video game consoles (hardware and software). In 2010, it generated more than two-thirds of the gaming ecosystem revenue, and Gartner predicts revenue to grow 4 percent in 2011.

Over the next five years, gaming hardware’s market share will remain constant while software spending will lose share to online-gaming spending, the fastest-growing segment. Gartner estimates consumer spending on global online gaming (subscriptions and microtransactions) will show a compound annual growth rate of 27 percent through 2015, with consumer spending on subscription fees slightly declining while spending on virtual goods will grow exponentially.

“We find that subscription fees are giving way to ‘freemium’ models, in which the game is provided for free to gamers but is monetized through advertising (both in-game advertising and display advertising) and in-game microtransactions, such as the sale of value-added services or virtual-good purchases,” said Brian Blau, research director at Gartner. “This trend is prevailing given the rise of social gaming, in which online gaming is connected to social networking sites and social networking platforms.”

“Users have become multichannel-oriented by choice and expect vendors to continue to deliver quality content and experiences by extending their gaming possibilities across multiple platforms,” said Mr. Blau. “If today’s mobile technology does not evolve quickly enough, the gaming industry is set to see the rate of innovation severely decline. Alternatively, it will provide opportunities in technology and content genres that we can’t foresee today.”

Additional information is available in the Gartner report “Market Trends: Gaming Ecosystem, 2011″ at http://www.gartner.com/resId=1724014.

According to a new research report from Gartner, consumers are on track to spend a record $2.1 trillion on digital information and entertainment products this year. That figure is expected to hit $2.8 trillion by 2015. $1.2 trillion — 62% — is spent on subscription-based communication services such as mobile, voice, and data services, broadband packages, video services, online gaming, and cable TV subscriptions. $600 billion, 28% of the total $2.1 trillion, is spent on devices themselves, and 10% is spent on content such as computer software, video on-demand, and pay-per-view services. “The three key technology areas that will offer the best opportunity for vendors during the next three years are: wireless broadband, which will enable constant connectivity; location-based services (LBS), which will personalize and take advantage of the constant connected state; and operating systems, which are the foundation for integration applications that can bring it all together,” Mikako Kitagawa, principal research analyst at Gartner, said. Read on for the full release.

Gartner Says Consumers On Track to Spend $2.1 Trillion Globally on Digital Information and Entertainment Products and Services in 2011

STAMFORD, Conn., June 27, 2011— 

In 2010, consumers globally spent $2 trillion on digital information and entertainment products and services, and this will increase to $2.8 trillion by 2015, according to Gartner, Inc. Worldwide consumer spending on digital information and entertainment products and services is projected to reach $2.1 trillion in 2011.

The trend among vendors to offer a diversified portfolio of products and/or services puts them in a better position to seize a larger share of the consumer wallet. Gartner defines consumer wallet spending as the money spent by consumers for digital technology devices and services that are for accessing, consuming and creating content. This wallet is divided into three basic spending types — content, devices and services.

“While a vendor can be a leader in specializing within just one segment of the consumer wallet, there are a mounting number of examples that suggest diversification may be the optimal path forward in the consumer electronics industry,” said Amanda Sabia, principal research analyst at Gartner. “Vendors that diversify their offerings across multiple consumer spending segments earn revenue across the full ecosystem and take legacy services to transform to newer products and services.”

Of the $2 trillion consumers spent globally in 2010 on digital information and entertainment products and services, the largest spending segment (62 percent) was for communications subscription-based access and usage services. The $1.2 trillion included mobile and wired voice services; mobile data services, such as SMS/TXT and broadband; fixed broadband services; video services, such as subscriptions to pay TV; and online gaming.

The second-largest spending segment (28 percent) was for devices. The $600 billion is made up of consumer electronic devices, such as mobile/handheld devices, PCs and related devices, and stationary entertainment equipment, such as television sets and game consoles.

The smallest spending segment (10 percent) was for content and software for a total of $200 billion. Video content that has been purchased/rented/streamed/downloaded, as well as premium channel/pay per view (PPV)/video on demand (VOD), and that portion of pay TV subscriptions allocated to licensing fees made up half of this segment, while the other half was for PC and gaming software, digital music and books, and purchases from mobile apps stores.

“There are two basic strategies that vendors have used to capture consumer spending that will enable their interconnected consumer experience,” said Mikako Kitagawa, principal research analyst at Gartner. “The first is to concentrate in one consumer spending segment, and the second is to diversify into other consumer spending segments.”

“The challenge to vendors choosing to be hyperfocused on one wallet spending segment is the relentless pursuit of innovation required to maintain segment sales leadership in this one specific segment,” Ms. Kitagawa said. “There are two ways to achieve leadership in this instance: by diversifying the portfolio suite of offerings and by expanding the target audience or usage model of the products and services.”

Vendors choosing to diversify into other consumer spending segments can benefit from the fact that consumers are increasingly using alternative services that will move their spending from one segment to the other, such as fixed voice to mobile voice; fixed broadband to mobile broadband; physical content, such as CDs, DVDs and books to online/digital versions; and linear broadcast TV to over the top (OTT) video. All of these alternative services provide business opportunities that would replace or would be in addition to legacy products and services, thus enabling a vendor to pursue the consumers’ spending in more than one segment.

“Technology innovation opens windows of opportunity for vendors to consider diversification,” said Ms. Kitagawa. “However, technology innovation also opens a window for change among consumers to switch vendors in the pursuit of cost savings or lifestyle-changing technology.”

“The three key technology areas that will offer the best opportunity for vendors during the next three years are: wireless broadband, which will enable constant connectivity; location-based services (LBS), which will personalize and take advantage of the constant connected state; and operating systems, which are the foundation for integration applications that can bring it all together.”

Additional information is available in the Gartner report “Market Trends: Diversification Trends Capture More of Consumer Technology Spending.” The report presents what products and services make up the consumer wallet, and a high-level analysis of the varying strategies to capture that spending within and among the various segments. The report is available on Gartner’s website at http://www.gartner.com/resId=1717114.

Market research firm Gartner on Wednesday said that growth of PC sales would slow to 9.3% in 2011 as consumers reduce spending and hold onto their PCs longer. Gartner had previously projected that PC sales would grow 10.5% this year. Beyond belt tightening, Gartner notes that the slowed PC growth is due in part to strong sales of Apple’s iPad line and other tablets. The issue is not that tablets are replacing personal computers, however, as Gartner says these media tablets have just caused consumers to delay new PC purchases. “Consumer mobile PCs are no longer driving growth, because of sharply declining consumer interest in mini-notebooks,” said Gartner research director Ranjit Atwal in a statement. ”Mini-notebook shipments have noticeably contracted over the last several quarters, and this has substantially reduced overall mobile PC unit growth. Media tablets, such as the iPad, have also impacted mobile growth, but more because they have caused consumers to delay new mobile PC purchases rather than directly replacing aging mobile PCs with media tablets. We believe direct substitution of media tablets for mobile PCs will be minimal.” Gartner’s full press release follows below.

Gartner Says PC Unit Growth in 2011 will Slow to 9.3 Percent as Consumers in Mature Markets Remain Cautious

Near-Term PC Growth Reliant on Professional Replacements

STAMFORD, Conn., June 8, 2011—

Throughout much of the last decade, PC unit growth was powered by consumers. With consumers from mature markets maintaining a tight rein on their spending in response to continuing economic uncertainty, and a lack of compelling reasons for consumers in general to replace their PCs, PC unit growth has slowed and must once again rely on businesses to drive it.

“Consumer mobile PCs are no longer driving growth, because of sharply declining consumer interest in mini-notebooks. Mini-notebook shipments have noticeably contracted over the last several quarters, and this has substantially reduced overall mobile PC unit growth,” said Ranjit Atwal, research director at Gartner. “Media tablets, such as the iPad, have also impacted mobile growth, but more because they have caused consumers to delay new mobile PC purchases rather than directly replacing aging mobile PCs with media tablets. We believe direct substitution of media tablets for mobile PCs will be minimal.”

PCs are transitioning from a one-size-fits-all computing platform to a more-specialized device, prized for its ability to complement other devices. “The PC market is experiencing dramatic structural changes,” said Mr. Atwal.” Moving forward, PCs will no longer be a market by themselves, but part of a larger device market that ranges from smart televisions to the most-basic-feature phones. Within this market, consumers and professionals will increasingly use the combination of devices that best suits their particular needs.”

Over the next 18 months, PC growth will be supported by healthy professional replacements. “Businesses sharply reduced replacements and extended PC lifetimes in response to the recession,” said Raphael Vasquez, research analyst at Gartner. “Businesses have begun replacing aging PCs more vigorously. We expect the growing urgency for businesses to migrate away from Windows XP will drive significant professional replacements.”

Gartner has reduced expected 2011 Japanese PC unit growth to 2.4 percent in response to the March earthquake and tsunami. “Desk-based PC shipment growth has been significantly affected and business continuity plans are accelerating the shift to mobile PCs and alternate computing models,” said George Shiffler, research director at Gartner. “However, the impact of Japan’s twin disasters on worldwide PC shipment growth has been minor, and PC vendors have so far managed the threat of Japanese component disruptions.”

Additional analysis is available in the Gartner on Demand webinar “Gartner PC and Media Tablet Forecast Update, 2Q 2011.” The webinar is available at http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=1635714&ref=Webinar-Calendar.

Does the number 36 mean anything to you? If you’re an Android fan it should. A report from analytics firm Gartner indicates that 36.3 million Android handsets were sold during Q1 of 2011 giving the mobile operating system a 36% share of all smartphones sold during that same period. An impressive figure on its own, but even more-so when considering that Android saw sales of 5.2 million units and held a 9.6% share of sales in Q1 just one year prior. Nokia’s Symbian operating system sold 27.6 million units in Q1 and Apple’s iOS accounted for 16.9 million of the 100.8 million total smartphone units sold. Moral of the story: Android is killing it. The full report is after the break.

Gartner Says 428 Million Mobile Communication Devices Sold Worldwide in First Quarter 2011, a 19 Percent Increase Year-on-Year

Apple, Samsung and HTC Reported Strongest Results in an Increasingly Smartphone-Dominated Market

Egham, UK, May 19, 2011—

Worldwide mobile communication device sales to end users totaled 427.8 million units in the first quarter of 2011, an increase of 19 percent from the first quarter of 2010, according to Gartner, Inc. Smartphones continued to outpace the rest of the market, and a newly competitive mid-tier smartphone market will drive smartphones into mass adoption and accelerate this trend.

“Smartphones accounted for 23.6 percent of overall sales in the first quarter of 2011, an increase of 85 percent year-on-year,” said Roberta Cozza, principal research analyst at Gartner. “This share could have been even higher, but manufacturers announced a number of high-profile devices during the first quarter of 2011 that would not ship until the second quarter of 2011. We believe some consumers delayed their purchases to wait for these models.”

Overall, the earthquake and tsunami in Japan will have a smaller effect on the mobile communication devices market than initially anticipated. There is currently about six to seven weeks worth of inventory of finished products in the channel and about four weeks worth of inventory for components. Gartner estimates that manufacturers’ sales into the channel will drop in the second quarter of 2011, while sales through to consumers will be flat.

Nokia sold 107.6 million mobile devices in the first quarter of 2011 (see Table 1). Its market share declined 5.5 percentage points year-on-year, and its share has reached its lowest since 1997. Nokia will aggressively lower average selling prices (ASPs) in markets where communications service providers (CSPs) control the sales channels, in order to maintain shipments of Symbian devices while waiting for its first Windows Phone 7 devices to reach the market. However, Nokia will face challenges from Android competitors and from some Japan-induced supply constraints.

Table 1
Worldwide Mobile Terminal Sales to End Users in 1Q11 (Thousands of Units)

Company	1Q11 Units	1Q11 Market Share (%)	1Q10 Units	1Q10 Market Share (%)
Nokia	107,556.1	25.1	110,105.4	30.6
Samsung	68,782.0	16.1	64,897.1	18.0
LG	23,997.2	5.6	27,190.1	7.6
Apple	16,883.2	3.9	8,270.1	2.3
RIM	13,004.0	3.0	10,752.5	3.0
ZTE	9,826.8	2.3	6,104.3	1.7
HTC	9,313.5	2.2	3,378.4	0.9
Motorola	8,789.7	2.1	9,574.5	2.7
Sony Ericsson	7,919.4	1.9	9,865.7	2.7
Huawei Technologies Co. Ltd.	7,002.9	1.6	5,236.1	1.5
Others	154,770.9	36.2	104,230.3	29.0
Total	427,846	100.0	359,605	100.0

Source: Gartner (May 2011)

Samsung experienced its strongest first quarter ever. The shift to higher end smartphones, such as the Galaxy line, led to an increase in ASPs. This helped to offset an increase in materials costs. Samsung made numerous product announcements during the first quarter of 2011. These included numerous Galaxy smartphone announcements (such as the Galaxy S II), a bada device (Wave 578), and new models of the Galaxy Tab tablets (10.1 and 8.9). These new devices, along with the effects of seasonality and expansion into emerging markets with touch and dual-SIM devices, should help improve Samsung’s performance in the second quarter of 2011.

Apple sold 16.9 million units to end users worldwide, more than doubling its sales of iPhones year-on-year. This market-beating growth came from all regions: the iPhone is now available in 90 countries from 186 CSPs. “This strong performance helped Apple consolidate its position as the fourth largest brand in the mobile communication market overall,” said Carolina Milanesi, research vice president at Gartner. “Considering the higher than average price of the iPhone this is a remarkable result and highlights the impact that a strong aspirational brand can have on a product.” Inventory levels at the end of the first quarter of 2011 were slightly higher than usual, as Apple not only continues to expand in markets such as China, where distribution is more fragmented, but also extends its reach with new CSPs.

HTC recorded a very strong first quarter with 9.3 million mobile communication devices sold and moved to the No. 7 position. Strong high-end products helped HTC perform well with all major US CSPs, and in the first quarter of 2011 it became the No. 2 smartphone manufacturer in the region, overtaking Research In Motion.

Although in mature markets the shift from feature phones to smartphones is accelerating, smartphones overall moved down-market in the first quarter of 2011. Several manufacturers, including HTC, Sony Ericsson, Alcatel and ZTE, announced a broader portfolio of mid-tier devices, mainly based on Android, which will reach the market in the second quarter of 2011.

Android and Apple’s iOS continued to dominate the smartphone operating system (OS) wars (see Table 2). However, the big news in the first quarter of 2011 was Nokia’s strategic alliance with Microsoft on Windows Phone 7, and the retirement of Symbian. “This will precipitate a competitors’ rush to capture Symbian’s market share in the midtier,” said Ms. Cozza.

Table 2
Worldwide Smartphone Sales to End Users by Operating System in 1Q11 (Thousands of Units)

Company	1Q11 Units	1Q11 Market Share (%)	1Q10 Units	1Q10 Market Share (%)
Android	36,267.8	36.0	5,226.6	9.6
Symbian	27,598.5	27.4	24,067.7	44.2
iOS	16,883.2	16.8	8,359.7	15.3
Research In Motion	13,004.0	12.9	10,752.5	19.7
Microsoft	3,658.7	3.6	3,696.2	6.8
Other OS	3,357.2	3.3	2,402.9	4.4
Total	100,769.3	100.0	54,505.5	100.0

Source: Gartner (May 2011)

In the first quarter of 2011, RIM announced that it would transition its BlackBerry portfolio to the QNX platform in 2012. This should make its smartphones more competitive in graphics, performance and touch, and unify RIM’s tablet and smartphone user experience.

Windows Phone saw only modest sales that reached 1.6 million units in the first quarter of 2011, as devices launched at the end of 2010 failed to grow in consumer preference and CSPs continued to focus on Android. In the long term, Nokia’s support will accelerate Windows Phone’s momentum.

Gartner analysts said that the shift toward an ecosystem focus, application and services is the critical success factor for device manufacturers. “Every time a user downloads a native app to their smartphone or puts their data into a platform’s cloud service, they are committing to a particular ecosystem and reducing the chances of switching to a new platform. This is a clear advantage for the current stronger ecosystem owners Apple and Google,” said Ms. Cozza. “As well as putting their devices in the context of a broader ecosystem, manufacturers must start to see their smartphones as part of a computing continuum.”

“The 13.3 million-unit growth in channel inventory, along with some softness in demand from users in emerging markets registered at the start of the second quarter of 2011, is leading us to be cautious about sales in the reminder of the year,” said Ms. Milanesi. “We are currently revising down our 2011 sales estimate as a result of these trends, and expect it will likely drop to between 1.790 billion and 1.795 billion units.”

Additional information is in the Gartner report “Market Share Analysis: Mobile Devices, Worldwide, 1Q11″ The report is available on Gartner’s website at http://www.gartner.com/resId=1688625.

According to research firm Gartner, although Microsoft shipped 2 million Windows Phone units during Q4 of 2010, it sold 1.6 million units during Q1 of 2011.”Windows Phone saw only modest sales that reached 1.6 million units in the first quarter of 2011,” wrote Gartner. “Devices launched at the end of 2010 failed to grow in consumer preference and CSPs continued to focus on Android.” Gartner is, however, predicting big things for Microsoft’s smartphone operating system. By 2015, the analytics company predicts that Windows Phone will see shipments in excess of 215 million units — thanks in large part to its partnership with Nokia. This would put Microsoft in second place in global market share — behind the open-source smartphone-overlord Android and ahead of the not-so-open-source iOS.

[Via WinRumors]

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Apple’s iPad will continue to dominate the “media tablet” market for years to come, research firm Gartner said on Monday. While Google’s Android platform is expected to gain market share rapidly as iOS’ share declines over the next five years, Gartner still sees iOS as owning the largest share in the tablet market five years from now. According to the firm’s latest figures, Apple’s iPad tablets accounted for 83.9% of the market in 2010 while Android tablets — namely Samsung’s Galaxy Tab — held a 14.2% share. In 2011, Gartner expects the iPad’s market share to slip to 68.7% while Android’s share climbs to 19.9%, and then in 2015, Android will rise to account for 38.6% of the market. At that time, Gartner expects Apple’s iPad to account for 47.1% of the 294 million tablets sold, meaning Gartner expects Apple so sell nearly 140 million iPads in 2015. A few other items of note according to the firm’s forecast: RIM’s QNX-based tablets will make up 10% of media tablets sold in 2015, HP’s webOS will only have a 3% market share in 2015, and the figures in this report do not include sales of Windows-based tablets as they do not fit Gartner’s criteria for “media tablets,” which run a lightweight OS. Hit the break for Gartner’s full press release.

Gartner Says Apple iOS to Dominate the Media Tablet Market Through 2015, Owning More Than Half of It for the Next Three Years

Egham, UK, April 11, 2011—

Despite mounting competition from other operating systems (OSs), Apple’s iOS will continue to own the majority of the worldwide media tablet through 2015, according to Gartner, Inc. Due to the success of Apple’s iPad, iOS will account for 69 percent of media tablet OSs in 2011, and represent 47 percent of the media tablet market in 2015.

Gartner analysts said Apple iPad did to the tablet PC market what the iPhone did to the smartphone market: re-invented it. A media tablet is not just a different form factor to perform the same tasks that can be done on a PC. Tablets deliver a richer experience around content consumption, thanks to the ecosystem they support. The richer the ecosystem, the stronger the pull for consumers.

“Seeing the response from both consumers and enterprises to the iPad, many vendors are trying to compete by first delivering on hardware and then trying to leverage the platform ecosystem,” said Carolina Milanesi, research vice president at Gartner. “Many, however, are making the same mistake that was made in the first response wave to the iPhone, as they are prioritizing hardware features over applications, services and overall user experience. Tablets will be much more dependent on the latter than smartphones have been, and the sooner vendors realize that the better chance they have to compete head-to-head with Apple.”

Google’s Android OS is forecast to increase its worldwide share of the media tablet market from 20 percent in 2011 to 39 percent in 2015 (see Table 1). Analysts said Google’s decision not to open up the Honeycomb, its first OS version dedicated to tablets, to third parties will prevent fragmentation, but it will also slow the price decline and ultimately cap market share.

“Volume will be driven by support from many players, the ecosystem of applications for tablets getting more competitive and some platform flexibility allowing lower price points,” said Roberta Cozza, principal analyst at Gartner. “The new licensing model Google has introduced with Honeycomb enables Google to drive more control, allowing only optimal tablet implementations that don’t compromise quality of experience. This might mean that prices will drop at a slower pace than what we have seen in the smartphone market.”

Table 1
Worldwide Sales of Media Tablets to End Users by OS (Thousands of Units)

OS	2010	2011	2012	2015
iOS	14,766	47,964	68,670	138,497
Market Share (%)	83.9	68.7	63.5	47.1
Android	2,502	13,898	26,382	113,457
Market Share (%)	14.2	19.9	24.4	38.6
MeeGo	107	788	1,271	3,057
Market Share (%)	0.6	1.1	1.2	1.0
WebOS	0	2,796	4,245	8,886
Market Share (%)	0.0	4.0	3.9	3.0
QNX	0	3,901	7,134	29,496
Market Share (%)	0.0	5.6	6.6	10.0
Other Operating Systems	234	432	510	700
Market Share (%)	1.3	0.6	0.5	0.2
Total Market	17,610	69,780	108,211	294,093

Source: Gartner (April 2011)

With the migration of Blackberry devices to QNX – the OS used on the Blackberry PlayBook - in 2012, RIM will be able to offer users a consistent experience across its whole product portfolio and create a single developer community. While QNX is a strong platform that delivers on performance, graphics and multitasking features,Gartner analysts said success in the media tablet market will be driven by richness of ecosystem.

“It will take time and significant effort for RIM to attract developers and deliver a compelling ecosystem of applications and services around QNX to position it as a viable alternative to Apple or Android. This will limit RIM’s market share growth over the forecast period,” Ms. Milanesi said. “It will be mainly organizations that will be interested in RIM’s tablets because they either already have RIM’s infrastructure deployed or have stringent security requirements.”

Gartner analysts said platforms such as MeeGo and WebOS, which currently have a weak presence in the smartphone market, will have a limited appeal unless they can grow that business.

“Smartphone users will want to buy a tablet that runs the same operating system as their smartphone. This is so that they can share applications across devices as well as for the sense of familiarity the user interfaces will bring,” Ms. Milanesi said. “Vendors developing on Android should be prepared to see more cross brand ownership as some users might put OS over brand when it comes to the purchasing decision. Improvements on usability and brand recognition are the strongest differentiators they can focus on.”

A media tablet is a device based on a touchscreen display (typically with a multitouch interface) whose primary focus is the consumption of media. The devices have screens with a diagonal dimension that is over 5 inches and may include screens that are as large as is practical for handheld use, roughly up to 15 inches. The media tablet runs a lightweight OS such as Android and iOS that is more limited than, or a subset of, the traditional fully featured OS such as Windows.