Current State of the PC/Laptops as Personal Electronics: An Industry Segment in Decline
By the end of 2013, the PC industry witnessed the swiftest decline ever as the number of units shipping fell 10% to 316 million (2009 numbers). This concluded with a poor holiday season (which the industry usually depends upon to make the year) as consumers and businesses have shunned PC/laptops for mobile/wireless devices of various types.
More computing tasks are moving to websites and applications tailored for wireless gadgets, rather than software installed on laptops and desktops. The annual drop eclipsed the previous record decline of 3.9% in 2012.
Current State of Wireless Devices as Personal Electronics: Continued Growth for Foreseeable Future
Now marked more by usage gains than penetration gains, wireless continues to grow at an amazing pace. The demand for smartphones and tablet PCs has been increasing tremendously and manufacturers have been differentiating the products based on software and hardware specifications. The current products in both segments have Apple and Android OS occupying almost the entire software share of the market. Some recent statistics are as follows:
- In the third quarter of 2013, the average U.S. iOS and Android smartphone user spent 34 hours and 17 minutes per month on the mobile Web and native applications
- The amount of monthly time-spend on smartphones has grown almost 10 hours over the last year
- At the same time, PC usage is dropping, as the average U.S. adult spent 27 hours and 3 minutes browsing the Internet on a PC, down from 28 hours and 57 minutes in the same period a year ago
We see Wearable Wireless and the so-called Internet of Things (IoT) as the next big growth driver for penetration (number of devices) and usage respectively. We see wearables as a bigger driver for more devices and not as much for usage (as compared to IoT).
The Future of Wireless: Wearable Devices and Body Area Networks
Basic economics: Supply and Demand Factors are Driving Lower Prices
Due to the fact that LTE (more specifically VoLTE) will add significantly more capacity to carrier networks, in absence of proportionally large increased demand, the supply demand curve dictates that there must be a new (lower) price to maintain equilibrium. This is the basic law of supply/demand and is a universal law as sure as there is gravity and electromagnetism. This means that the wireless service providers will gain capacity and efficiency, gain new customers, and more usage, but not enough to offset price declines from a marginal profitability perspective.
With declining margins associated with the commoditization of bearer services (defined as those services that merely act as the carriage for something else – voice and raw data), we see an increasingly important need for service providers to focus on three things: (1) Business to business services, (2) Value-added consumer services, and (3) New, high growth business models and ecosystems. Wearable technologies certainly represent the third opportunity and potentially the second as well.
Enter the New Technologies that will Take Precedence in Wireless
As we move at a lightening pace through the digital age, new technologies continuously emerge that change the way we live in dramatic ways. We see Augmented Reality (AR), Wearable Technology, and more specifically Body Area Networks (BAN) as particularly life-changing solutions to many human problems.
In 2013, Credit Suisse report announced that the global wearables market will reach three to five billion dollars nowadays. And according to that report this investment could exponentially increase to fifty billion dollars in the next three years.
Body Area Networks are defined by IEEE 802.15 as, “a communication standard optimized for low power devices and operation on, in or around the human body (but not limited to humans) to serve a variety of applications including medical, consumer electronics / personal entertainment and other”. It is also referable in many different terms such as Wireless Body Area Network (WBAN) and Body Sensor Network (BSN).
Top mobile executives see wearable computing devices as the next big thing in the mobile industry. In a recent survey, twenty-two percent of the respondents said wearables would be the next big thing, while 17% chose the mobile wallet, and 19% chose “everything as a service” (cloud-powered software and computing). While a tiny survey, encompassing less than 60 executives, it’s worth considering as a sign of how quickly wearables have become a focus of business interest.
We see a completely new ecosystem developing around wearables that will cause each member of the value chain to take critical actions to support their ongoing success. For example, we recommend that consumer electronics suppliers partner with the wireless carriers in support of a variety of applications and new business models involving new technologies. We see them wearable devices integrated with Connected Home, Connected Work, and Connected Vehicle environments. By way of example, Google Glass and other wearable devices will be integrated into Hyundai’s 2015 Genesis car, Hyundai recently informed eWeek. Wearable devices will be able to control some Genesis functions through Hyundai’s cloud-based Blue Link platform. Hyundai is still developing the BlueLink app for Google Glass, but it expects the app to be ready for the 2015 model Genesis.
For more information, see:
Wearable Technology in Industry Verticals 2013-2018
Evolution of Augmented Reality, Wearable Wireless, and Body Area Networks