Tech Trends and Disruptors to watch in 2012

by Tim Bajarin   |   November 28th, 2011

You may not know it yet, but when we end 2012, we will look back on it and realize that it was the most disruptive year we will have had in personal computing in over a decade. In the next 12 months, the market for personal computers of all shapes and sizes will have changed dramatically and I believe we will see at least one of the top 10 PC vendors leave the PC consumer business completely.

So what will be the major disruptive forces that could re-shape the PC business starting in 2012? There are four technologies and trends in the works that I believe will force the computer industry in a new direction.

The first will be Intel and their partners huge push to make ultrabooks 40% of their laptop mix by the end of 2012. Although I don’t believe they will achieve that goal, especially if ultrabooks are priced above $899, the fact is that ultrabooks are the future of notebooks. Instead of thin and light laptops driving the market for laptops as they are now, ultrabooks, which are thinner and lighter with SSDs and longer battery life, will eventually be what all laptops will look like within 5 years. The heavier and more powerful laptops that exist now won’t go away completely as there are power users who will still need that kind of processing power. But ultrabooks will be the laptops of the future and 2012 will be the first year of its major push to change the portable computing landscape.

There is an interesting twist with ultraportables that could be even more important starting next year. This will be the introduction of ultraportables with detachable screens that turn into tablets. In the past, this hybrid as it is called, ran Windows when in laptop mode and Android when in tablet mode. But this approach was dead in the water from the start. But with Windows 8 tablets ready to hit the market next fall, you will see ultraportables with detachable screens that will run Windows 8 with the Metro UI on the laptop and Windows 8 tablet version with the Metro UI in tablet mode. This would bring a level of OS consistency across both device modes and I think that this concept is a sleeper. In fact, if done right, this alone could reshape the traditional PC market in the near term.

The second major disruptor will be the acceptance of tablets in enterprise in greater numbers in 2012. Although IT directors will still be buying laptops, there is a real push by some to add tablets to their overall business use cases. At the moment, Apple has a huge lead here with 475 of the Fortune 500 either buying iPads for deployment or pilot programs and some, like American Airlines, United Airlines and SAP have each bought 10,000+ iPads for use in their IT programs already. As for Android in IT, that boat has sailed. Google screwed up their version releases of Android and not one IT director I have talked to is willing to trust Google with their Android roadmap always being a moving target. And don’t get me started on Android’s security risks. Recent reports that 37% of all Android Apps have some sort of bogus code or malaware has pushed Android out of most IT discussions.

Instead, the option to the iPad that is really on their radar is Windows 8 for tablets, especially the version done for Intel processors. What they want is the ability to run Windows apps as is on a tablet even though they may actually write their own custom programs for Windows 8 and its Metro UI as well. But this is sort of comfort blanket to them and this Windows 8 tablet has many, especially hard-core Windows shops, waiting to see how good Windows 8 will be when it debuts in Oct of 2012 before making a final decision on what device/platform they will integrate into their IT programs over the next 5 years.

The third disruptor will be the proliferation of tablets at the “low” end of the pricing spectrum, which will give birth to the “good enough” category of tablets. There is no question that the iPad will pretty much represent the higher end or “most” desired tablet, but for many, $499 is still too steep a price for them to buy into a product category that they want to participate in. Even with this competition, Creative Strategies has still forecasted that Apple will sell north of 70 million iPads in 2012. But the Kindle at $199 and the Nook Tablet at $249 has opened up the tablet market to millions of new users who will jump on the tablet bandwagon in 2012. This will be the most explosive year for tablets yet and by the end of 2012 we estimate that well over 120 million people WW will be using a tablet of some kind for personal and business use.

The fourth disruptor that will impact the 2012 computing and mobile market is related to processors. By the end of 2012, Intel should have its latest version of Atom that will have it greatest level of processing power and low voltage efficiencies built-in. That means that for the first time, Intel can aggressively compete with the ARM processors for smartphones and in some tablets where low voltages is important. Although Intel is very late to the mobile processing party, you can’t count Intel out, as they are known as a very powerful competitor. And, being this late, they could be very aggressive in pricing to buy into this market in a big way.

The other thing related to processors is the fact that Windows 8 for ARM should debut in 2012. That means that, at least in principle, the ARM guys can start going after the ultraportable market as well. On paper this is good news for the consumer as it could help rapidly bring prices for ultrabooks down. However, Windows programs cannot run on ARM processors as is and apps will need a lot of re-written code as well as UI enhancements to work on this new device platform. But the ARM camp is pretty excited about being able to move their chips upstream and supporting Windows 8 and this dynamic alone will shake up the market in 2012.

As for a top 10 PC vendor pulling out of the consumer PC business, I think that this is inevitable. All of the PC vendors are working on 5% or lower margins for their PC’s sold and given their costs of advertising, overhead and channel support, it is really hard for any of them that do not have a major enterprise business to help bolster profits through software and services, to compete. That is why I believe that at least one of the top 10 PC vendors pull out of the consumer market by the end of 2012.

Yes, 2012 will be a most interesting year in computing. And with these disruptions in the works, it is poised to perhaps become most explosive year we have seen in some time when it comes to altering the direction of the PC market.

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.
  • Anonymous

    “There is no question that the iPad will pretty much represent the higher end or “most” desired tablet, but for many, $599 is still too steep a price for them to buy into a product category that they want to participate in.”

    Typo? That should be $499 for the entry level iPad.

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  • Walt French

    “In fact, if done right, [Windows slates] alone could reshape the traditional PC market in the near term.”

    I guess. Big “if,” that one, but at least Microsoft is up to its third iteration on tablets, their fabled 3.1 success spot. Still, their moribund Windows Phones marketing seems calculated not to try to compete with consumers’ preferred devices, leaving the BYO issue as a sticking point. My impression is that BYO, together with Apple’s efforts (finally!) into the Enterprise, is a disruptor already underway, one that will put pressure on Microsoft.

    Regards the 7″ tablets, the Nook may ALREADY have been a pyrrhic success— many initial buyers may have bought them as bn.com POS terminals, but many others want them simply as a subsidized Android computer, meaning the up-front subsidy will result in near-zero media sales. B&N does not have the deep pockets to subsidize the effort forever.

    Sooner or later, disruptive innovations need to pay their own way. Google (assuming its MMI deal goes through) is something like $15 billion into the Android market for something like $1 billion in mobile ad revenues. Amazon is at risk of subsidizing the very lowest-volume users by trying to compete on price, with a device that has been reviewed as balky and limited, meaning the large-volume readers, movie-watchers and music-listeners are likely to go elsewhere. If the iPad follows Apple’s current iPhone posturing (old models much less costly than newer, higher-featured ones), even Amazon’s price advantage could be whittled to insignificance.

    I think 2012 will indeed by disruptive as you propose, but that, just as in past years, slow and where-the-puck-was players will be disrupted by the very firms that have shown rapid tech innovations.

    • http://techpinions.com/about-tech-pinions/steve-wildstrom Steve Wildstrom

      For now, at least, Windows Phone is effectively out of the bring your own device game because it lacks real Exchange support, table stakes for any enterprise that uses Exchange. The lack of Exchange support, oddly enough, is a conscious decision by Microsoft, which wanted to aim WP7 at the consumer market. Exchange is also a real issue for Android; how serious an issue varies from handset to handset (or tablet to tablet.) Apple has worked quietly with Microsoft to make iOS viable in the enterprise, and a legitimate challenger to BlackBerry.

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