Predictions From My Data Models for 2015
Rather than do a standard “tech predictions for 2015”, I thought it would be interesting to share some of my data models and make predictions based on them. While it is true historical performance does not necessarily predict the future, what I will do is add context to the model to make sense of the trend line as needed.
#1: Smartphone vendors will ship more units in a single quarter than PCs ever shipped in a single year
Several interesting observations from this chart. First, it is likely, in Q4 of 2014 and for the first time ever, smartphones will ship more to the channel in a single quarter than the PC industry in the totality of the year. This is the first milestone in the post PC era I was anticipating and it almost certainly has happened. The next is when, in a single quarter, smartphones ship more units to the channel than the best year of PC shipments on record. Depending on whose accounting you like (IDC, Gartner, etc.), the number is in the ~360m unit range for the best year of PC shipments. At the pace we are going, smartphones are likely to ship more than 360m units in Q3 or Q4 of 2015.
#2: India will pass the US as the second largest market for smartphones
The US smartphone market remains fairly flat with over 70% penetration. India is growing at a much faster pace than the US. With the entrance of now fairly decent quality $30 smartphones in the India market, my model predicts India will be the second largest market by quarterly smartphone shipments in the second half of 2015. Something to watch for (although it may not happen in 2015) is a local Indian smartphone vendor to make it to the top 5 vendors by quarterly shipments.
#3: The PC remains flat to slightly negative
I’m not sure this is controversial but I don’t see anything on the horizon to make any major changes to the PC’s trend line. I went ahead and included the next few quarters to show the year moving forward very much as in 2014. I expect enterprise to continue to refresh. I don’t believe Windows 10 makes any real impact on the category in 2015 for consumer or enterprise. I believe the PC market is a mature category and now purely a replacement market. Which means all new devices are simply selling primarily to existing customers. I don’t anticipate Chromebooks to alter this line either, as 10m units is the forecast for 2015 and that is likely slightly aggressive in my opinion. If you are interested in more depth on my outlook for the PC category in 2015 you are welcome to download my report.
#4: Tablets return to gaining steam
2013 was the worst year on record for the PC and, while it has a shorter history, 2014 was pretty bad for the tablet category. It remains in negative growth and will end with YoY quarterly growth averages of about -9.5%. However, I feel a dynamic shift is taking place, spurred on by the low cost tablet era. Retailers are catching on to how these low cost tablets (sub $100 and soon to be sub $50) can be used as promotions to drive in-store traffic. A theme I intend to develop in 2015 is the shift in the tablet from “computer” to “utility.” There will certainly be a segment of the tablet market that is a class of computer, a segment in which the iPad dominates, but the tablet market is not just these devices. The category includes tablets that get mounted on walls at retail, set in garage workshops as portable TVs, used by limo drivers as a sign with passengers’ names, set next to the bed as an alarm clock and streaming radio. At the extremely low price points tablets are moving to, they can be used for anything and everything and even dedicated to specific tasks. Hence, the utilitarian nature of them. As I develop this theme, I will be making clear distinctions between the iPad market and the low end tablet market. But as we discussed on this holiday retail podcast, there isn’t much going on in the space between the two categories.
#5 Apple will be the number one smartphone vendor in a single quarter
This is my moonshot prediction, even though I could see all the ways it could happen. No doubt Apple has just had a stellar holiday quarter. I predicted a few months ago Apple and Samsung’s holiday quarter shipments would be quite close. All supply chain and retail/channel checks continue to give me confidence this will be the case. It is entirely conceivable that, by sell through data, Apple could be the number one smartphone vendor this quarter but validating that would be near impossible. Looking forward to 2015 and Apple bumping Samsung as the top vendor has everything to do with Samsung’s trend line going steeply downward, more so than with Apple trending steeply upward. Apple is likely to maintain steady growth into 2015, continuing year over year quarterly growth. I don’t anticipate this to happen in any other quarter than Q4 of 2015, unless something drastic happens to Samsung’s device sales which I don’t anticipate. This quarter is historically Apple’s strongest. If Apple keeps playing their cards right, I could see how every holiday quarter could be Apple’s to own.
These are five predictions based on what a few of my data models suggest. My models are not static but dynamic and are updated as I get new information on a week to week or month to month basis. While they are subject to change, the foundations of the models are sound and help give insight into what the next few quarters, and sometimes the next year, may hold. I’m looking forward to keeping tabs on these projections and see how they play out.
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