There’s Still Time Left for Microsoft Tablets

Nine months ago, back when the flattening of iPad sales had not yet become obvious and when the majority of analysts were predicting tablets to soon imminently replace notebooks, I wrote quite a bit about Microsoft (in Japanese).

In summary, I wrote;


The largest factor determining whether a disruption succeeds or not is whether the incumbents respond in time. “In time” is defined by whether the entrant product has evolved to the point where it can fully replace the incumbent. In the context of Microsoft, it is defined by whether the combination of a smartphone and a tablet can replace a PC. If the answer is yes, then Microsoft cannot retaliate. Otherwise, a counterattack will still be effective.


Tablet still cannot replace PCs. In particular, Android tablets are skewing towards 7-inches and are focusing on entertainment. The tablet market is not moving towards doing work. Hence, tablets are unlikely to replace PCs.


Because of the vast resources they can deploy, incumbents rarely lose once they retaliate in time. In the case of Microsoft, I think they still have time.

Apple has released their sales figures for 1Q2014 and the sales of the iPad have clearly flattened. Although iPad sales volumes (~ 20 million units) are still very impressive, at this level, it does not look like they are on a trajectory to replacing PCs.

So Microsoft still has time.

In fact, the new Surface Pro 3 clearly shows that Microsoft understands this. Instead of launching a hastened response to the iPad which was the original Surface RT, they have launched a product that attacks from their dominant strength in PCs and office productivity software. They have realized that laptops are not going to be replaced by tablets any time soon, and that sales of Windows laptops will continue to surpass the sales of iPad-like productivity tablets. Hence their dominant power, although weakened, will still be a formidable asset for the foreseeable future.

So instead of starting afresh, they are playing their strengths and using their resources wisely. Instead of attacking tablets head on, their plan seems to be to embrace and to internalize tablets into their laptop products.

This clearly makes sense.

Of course, it will take time. But Microsoft has realized that it has time.

Chromebook Disruption Revisited

Although some people consider Chromebooks to be a low-end disruption to traditional laptop PCs, I have been skeptical of this for quite a while (“Why the Chromebook is not a Low-End Disruption”). In January 2013, I even outlined why Chromebooks will ultimately follow the fate of Netbooks.

The flattening of iPad sales (1, 2, 3) strengthens my conviction.

Simply said, low-end disruption is much harder than many people believe. iPads have failed to replace laptop PCs in the low-end disruption fashion; Apple is now focussing on new-market disruption as is clearly demonstrated in the new “Your Verse” marketing theme.

Even with low-end disruption, there has to be a significant new-market disruption element. Low-end disruption is more than a few hundred dollars saved or a small bit of convenience. There has to be a clear and hugely significant improvement that broadens the use-cases, thereby allowing computing to happen in situations where it was not previously feasible. The “Your Verse” campaign is trying to tell us that the iPad does exactly this.

It follows that if iPads failed to disrupt laptop PCs, the chances of Chromebooks doing the same is close to zero.

What Next?

The dust on the iPad sales decline news has mostly settled, and at least the sensible analysts have converged on the view that the cause was the rise of the smartphone; that the smartphone became good enough for many of the computing needs that tablets were previously purchased for.

So now that we have a rather adequate idea of what happened, let’s try to go forward. Let’s try to see what will happen in the future.

Tablet sales vs. PC

Up till now, the rhetoric was that tablets will overtake the PC in sales quite soon. This assumed that tablet market will continue to grow while PCs will gradually decline.

First, it is possible that the overall tablet market (not only iPads) might also slow down. Hence tablets might not overtake PCs so soon.

Second, comparing tablet sales to PC sales may not be meaningful. Whereas many analysts previously thought that tablets were replacing PCs, that does not seem to be the case. In fact, it seems to be the smartphone that is replacing tablets and also PCs.

As a result, we don’t know right now what is going to happen to tablet vs. PC sales. We are also starting to think that this question is rather meaningless.

Absolute tablet sales

We know that the tablet market is rather complex. On the high-end, there is the iPad which is used for all kinds of tasks, including web-browsing, reading books, composing emails, drawing art, playing games, watching video and a lot more. On the low-end, there are media players which are not used for web-browsing but are used a lot for watching videos.

The price points are very different, as is the ecosystem, product quality etc. With this huge difference, it is questionable whether we can discuss these two segments together; it looks like there are two completely different markets.

For the iPad segment, it is reasonable to assume that the current trend will continue. Assuming that the flattening of iPad sales is a result of smartphones becoming more capable, we don’t see an immediate end to this trend. Investment continues to intensify in mobile applications and services. On the other hand, there are few compelling applications targeting the mass-market that require a tablet to enjoy. The exception here might be Microsoft Office. The ubiquity and importance of Microsoft Office could enable the iPad version to single-handedly reverse the downward trend of iPad sales.

For the other tablets, there is reason to believe that they will continue to expand. Prices are getting extremely affordable to the point that tablet hardware is now being bundled with subscription services, such as education. That is to say that these tablets are not longer a product in themselves, but an accessory to a service. They are single-purpose devices, much like the jug that comes with your coffee maker. They do not compete with other jugs. Since customers are not making an explicit purchasing decision when acquiring these tablets, competition with smartphones is irrelevant.

Unless a new consumer killer application emerges, the upside potential of the iPad segment lies mostly in businesses and education. As I mentioned, Microsoft Office may be a big boost to the corporate adoption of iPads. The problem is that corporate and education IT are slow-moving. We do not know when adoption will kick-in at the level that we need to see a visible reversal in iPad sales trends. It make take some more years, in which case we would see a continuation of the current downward trend for a while.

Long term

There is no question that the iPad is a magical device.

Whether laptop users will embrace it for their work as a PC replacement is actually kind of irrelevant. Replacing PCs doesn’t expand the possibilities of computing if the same people are using it for the same tasks. Instead, what is really important is how iPads allow children, old people and people with disabilities to use computers. Equally important is how it allows computing in situations where it was previously difficult, like when you are standing and do not have access to a desk.

Too many people thought of the tablet as a PC replacement (and found that tablets were actually being replaced by smartphones). That was the wrong approach. Tablets will never thrive if they can only find their niche in between two strong and ever-evolving products. Tablets will thrive if they can carve out their own niche and that niche grows.

That niche is a new market segment. It is a market that did not previously exist. The majority of potential customers are not yet aware of the possibilities, or there may be roadblocks which have not yet been sorted out. Sufficient budget may not yet have been allocated to these projects. It will take time.

In the long term, I am confident that the iPad will thrive. The current levels of iPad purchases and awareness are extremely high, and it is totally unlikely that many people will or have found exciting new niches. Unfortunately none of these have yet become truly mainstream, but it is inevitable that many of them eventually will.

iBooks Author

In this context, it is easy to see that iBooks Author, the software that you can use to create beautiful multimedia books for the iPad, is a long-term play. It is an attempt to improve the quality and quantity of e-books specifically for the iPad. It has to potential to grow the iPad education niche, but it will take time.

Mid term

In the mid-term, I expect iPad sales to continue to struggle. They may even significantly decline. Keep in mind that current iPad sales are extremely high, much higher than PC shipments from either Lenovo, HP or Dell so even a significant decline does not mean that iPads will lose relevance.

I have no idea how long this will continue, or if business/education sales will be large enough to ever sustain 20 million iPad units per quarter for example.

What we do know is that the iPad still does not have a direct competitor and that looks like this will continue to be so mid-term.


The risk that I do see to the iPad business is tablet bundling with services. It is possible that we will continue to see a proliferation of single-use tablets being offered for free or extremely cheaply with education services, business solutions, entertainment subscriptions etc. These markets rarely care about providing the best possible user experience and they could prevent the iPad from finding traction in these markets.

Apple’s solution to this problem is easily predictable. They will work on the ecosystem and developer tools so that better services and solutions are uniquely possible on the iPad. The race is on.

Confusion As Pundits Try To Explain iPad Sales Decline

Following the decline of iPad sales, pundits are trying to come up with theories to explain what they are seeing. Let’s take a look at some common ones.

Market saturation theory

The iPad was released in 2010, hence the market saturation theory is saying that market saturation was reached in a mere 4 years. That is rather incredible, although not completely unthinkable given the extremely rapid uptake of this product.

The problem with this theory is that sudden flattening is not what market saturation looks like. Horace Dediu has charted the rise and fall of platforms since 1975, and we can see that a sudden flattening of sales is not what happens on saturation. Saturation is gradual, like the PC curve. Abrupt changes like the flattening seen when Macintosh sales flattened, are the result of a new product superseding the old, not saturation. In this case Windows 95.

Another issue with this theory. Searching the web, current household penetration of tablets seems to be around 50% whereas for PCs, it’s about 90%. Saying that tablets have saturated is easy, but it doesn’t explain why they saturated so early. Unless there is a reasonable explanation, “saturation” is not a cause but merely an observation of the slope of the curve.

Update: Tim Cook mentioned that 2/3 of iPad purchases are from first-time users. This makes the market saturation theory even more incredible.

The iPad isn’t very useful

Arguments like “it isn’t a production device”, “it isn’t a must have”, “there are too many things that it can’t do that a laptop can”, “it’s only good for our children to play games on” fall into this category.

The problem with this argument is that it has been true all along. Although this argument somewhat explains why people are not buying iPads, it totally fails to explain why people rapidly bought them from 2010-12.

It’s difficult to explain a huge change based on something that has been the same from the beginning.

Long replacement cycles

I do not doubt that the replacement cycle for the iPad is longer than the iPhone. I do not think however that this could have been a reason for the iPad’s sales decline.

The slowing of iPad growth started at the beginning of 2013. If this was caused by long replacement cycles, then we have to assume that the sales of 2012 were already heavily driven by replacement (with replacement cycle about 2 years) and that these sales started to go away from 2013. This is a preposterous assumption given that the iPad first went on sale in 2010. There would hardly have been a single replacement cycle before the sales started to slowdown in 2013.

In fact, Tim Cook actually mentioned that 2/3 of Apple’s iPad buyers were new to iPad. The iPad does not seem to be strongly driven by replacement sales even in 2014.

Replacement cycles are very unlikely to be the culprit. We have to look at slowing sales to first-time users.


Some people think that large screen phablets are eating into tablet sales and that this affected the iPad. These people are confusing the markets where phablets are selling well, with the markets that largely contribute to iPad sales.

It is well known that phablets are mostly popular in eastern Asia, and that they are much less popular elsewhere. On the other hand, iPads (premium-priced tablets) sell well in western countries whereas Asia (especially China) is flooded with cheap tablets, not iPads. Phablet sales and iPad sales owe to two different markets with limited interaction.

Moreover, one can assume that a very large percentage of iPad users also own iPhones because of the shared ecosystem and brand affinity (I haven’t been able to find direct data on this). iPad demographic studies also show that iPad users are similar to iPhone users, supporting this assumption. Since iPhones do not have large screens, the iPhone-owning segment of potential iPad users will not be affected by phablet trends at all. Therefore, if the phablet theory is true, phablet owners must be the sole contributors for the flattening of sales. Their contribution must be so large so as to completely mask the buying trends of iPhone-owning iPad buyers. Quite unthinkable.

I would love to have better data to back this up, but it seems unlikely that iPad purchases are being significantly affected by phablets.

Cheaper Android tablets

If cheap Android tablets are the reason for the iPads decline in sales, we should be seeing booming Android tablets sales. This is clearly not the case. IDC is forecasting significantly slower growth for tablets in 2014 (19.4%) compared to growth in 2013 (51.6%). IDC’s data includes the ultra-low cost tablets in China so it’s difficult to isolate what is happening in the market tier that the iPad is playing in. Nonetheless, it is evident that booming Android tablet sales aren’t what’s causing iPad sales to decline.

If you look at any metric for tablet usage, you will also see that Android tablets are not being used much. It is simply inconceivable that cheap Androids are winning customers from iPad.

There is a possibility though that Android tablets are diverting customers away from tablet usage altogether. Customers interested in tablets, but not of the techie type, might be swayed by a salesperson to buy an Android. On discovering that it’s pretty useless, they may be so fed up that they won’t consider buying a tablet (including iPads) ever again. I’m actually pretty worried about this, but I don’t think that it is sufficient as an explanation for iPad’s sales decline.

My theory: Mobile Software and the Mobile Web

The only theory listed above that makes sense is the “The iPad isn’t very useful” argument. The other theories fail because they don’t agree with either the data or common sense. In the case of the saturation theory which is hard to argue against, it’s simply an observation and not a cause-and-effect.

The only problem with the “The iPad isn’t very useful” argument is that it doesn’t explain why sales grew so fast up till 2012. If iPads weren’t useful, then people wouldn’t have bought them in the first place. Therefore we have to assume that, in the beginning while sales were booming, “The iPad was very useful”. At some point, probably in 2012, that ceased to be true and “The iPad isn’t very useful” became the more dominant situation.

How could that be? What could have changed so dramatically?

My theory is based on the observation that mobile applications and the mobile web improved tremendously so that using smartphones became comfortable enough. For example, when Steve Jobs demoed the iPad on stage in 2010, he browsed the New York Times website. At that time, the NYT website was not mobile aware, and you got the exact same layout as a PC when you accessed from a smartphone. You had to pinch and zoom your way around. They were one of the first publishers that offered an iPhone application, but the quality was quite poor. It also crashed a lot. As a result, viewing the NYT website was such a better experience on the iPad compared to the iPhone and that’s probably why Steve Jobs demoed it from the sofa on stage.

Today, the NYT website is so much better on an iPhone. Even without downloading the iPhone app, you get a layout that is optimized for mobile. It’s smooth, fast, and responsive. The font size is large enough to read without zooming, even on a 3.5-inch iPhone. The experience is so much better.

The same thing can be said of virtually every major website. Every major website now is optimized for smartphones down to iPhone sizes (remember that most web designers will be iPhone owners). There are also many more apps with much higher quality. There are very few occasions now where you need to have the screen size of a tablet to browse the web. This was not true even just a few years ago.

In fact, if you are a web developer, then you will know that what enabled this explosion of mobile websites is a technology known as “Responsive Web Design”. This is based on ideas described in A List Apart in May 2010. This was the watershed moment when the mobile web really started to get its act together. Previous mobile web design attempts were frankly quite clunky. If you want evidence of this history, note that the WordPress default theme for 2010 (twenty ten) was not optimized for mobile. In 2011, WordPress adopted a responsive default theme (twenty eleven) which fully adapted to mobile for the first time (You can check how these themes look on a smartphone using a desktop browser by simply narrowing the browser window). In other words, it took until 2011 till the world’s most popular web-publishing platform became fully mobile-friendly. 2010-11 was a pivotal moment for the mobile web.

What we see is that software and web innovation dramatically improved the usability of smartphones for common tasks like checking the morning’s news. This started in earnest after 2010 and really started to kick in a couple of years after that.

Back in 2010-2012, the old days, “The iPad was very useful” compared to a smartphone for things like viewing newspaper websites. In 2014, this is no longer the case. The iPad lost a key advantage over smartphones. As a result, the iPad had to justify its existence at the other end of the spectrum, against laptops. This enforced the “The iPad isn’t very useful” argument.

In summary, software has vastly improved the usability of smartphones and allowed them to replace tablets for casual computing. Tablets have been squeezed out of its niche. Tablets still dominate some niches which are not accessible to smartphones and could continue to find growth there in smaller quantities (Tim Cook explicitly mentioned education and business). However, it is unclear to me how tablets could grow in the mainstream consumer market in the mid-term (3-5 year span).


While I do have doubts on iPad growth in the mainstream consumer market (by which I mean excluding education mandated purchases), I have no doubt that Microsoft Office will be a huge force in corporate adoption. This alone could turn around the fortunes for iPad.

Explain Flat

Benedict Evans tweeted the only tweet that really makes sense about the iPad sales.

スクリーンショット 2014 04 24 10 23 06

Anybody can give multiple reasons why iPad sales might have slowed down, and the numerous replies to Ben’s tweet show that. However, none of these answer his question adequately.

His question;

  1. It’s a great product.
  2. It has a good price (was alarmingly cheap on introduction)
  3. Has very wide acceptance
  4. Has very high user satisfaction
  5. And STILL has flat sales

I would also add;

  1. Had tremendous growth up till 2012

Any acceptable answer has to answer all of these. It’s not easy.

Flat or declining sales in tech is something that we associate with products like the iPod or the PC. In these markets, no matter how good the product, sales will not grow because the market itself is shrinking. We often attribute this to a replacement product; a product that is making the old one obsolete. So the question is, is the iPad market being obsoleted by some other product?

We also have to answer the growth until 2012 question. If we simply say that tablets aren’t very useful anyway, how do we explain growth until 2012. We can’t.

The easiest way to think about it is that the iPod or PC cycle (from boom to bust) came in fast-forward; the nature of the market changed.

iPad Sales Decline

As reported in Apple’s Q2 2014 conference call, iPad sales significantly declined compared to the year ago quarter. A year ago, they sold 19.48 million units. This year, only 16.35 million. That’s a pretty big decline.

It’s not something that was totally unexpected. As early as August 2013, I noted that iPad sales and tablets sales in general were losing steam and this could be a longer-term trend. I wrote many times how the idea that tablets are replacing PCs is a fallacy, and that the iPad was actually carving out a new market, not replacing an existing one (1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13).

A summary of the current situation can be found in one of my posts that I wrote in Jan. 8th, 2014 (“What the Tablet Market Isn’t”).

So what I sense is the possibility that tablets (as computing devices) may have hit a roadblock in adoption, and this is due to the potential market being actually much smaller than envisioned. Much smaller than the PC market.

If this is the case, then what should be done about it? Or even, is it worth trying? Are we trying to artificially enlarge a market that is actually rather small?

These are questions that may be answered in the next iteration of iPads from Apple. Remember that “low-end disruptions” are at first not very capable, but they eventually move up-market through innovations that enable them to compete with high-end products but retain their simplicity. I strongly doubt that huge tablets or 2-in-1s qualify as this kind of innovation. Apple (and most likely only Apple) may have the answer in one of its labs.

If we look into the smaller details of Apple’s Q2 2014 earnings call, we see evidence of this.

“Thousands” of iPads being used at delivery company FedEx every day.

U.S. Department of Veterans Affairs is planning to deploy 11,000 iPads to change how doctors and patients interact. Will allow quick access to real-time secure medical information.

iPad has over 95 percent share of U.S. education market.

These are all markets where PCs couldn’t previously satisfy the “jobs-to-be-done”. In these markets, the iPad is not a replacement for PCs; it is allowing computing to happen in occasions where it was not previously feasible and creating a new market.

Cook said Apple has to focus on iPad penetration in both education and enterprise markets to drive further sales.

Creating a new market is generally much harder and a slower process then entering a pre-established market, especially if you are targeting government and enterprise. You have to consider the budgeting cycle and the internal decision process is longer and more complex. It is hard to prove benefit when there aren’t many examples to draw from. We all know that government and enterprise tend to be laggards in technology adoption due to the time they take in careful consideration.

It’s going to take a bit more time.

iPad Sales Decline?

Philip Elmer-DeWitt has compiled analyst estimates for Q2 2014 iPad sales, and the consensus estimate is a 0.7% decline. We will have to wait until the earnings report to get the actual numbers, but given the recent trend in sales, I think that this is a very likely situation.


The question is, what has happened?

To understand this, you have to realize that the iPad is a “middle” product sitting in between smartphones and laptops. Hence the segment is susceptible to forces from both below and above, which potentially makes the dynamics of the market rather volatile. To illustrate, here are some of the things that could happen outside of the tablet market itself, that exert strong affects on sales.

From smartphones

  1. Smartphones could increase in performance, reducing the performance advantage of tablets.
  2. Smartphones could gain larger screens, reducing the large screen advantage of tablets.
  3. Mobile applications and web sites could become more abundant and better in quality, making it just as comfortable to read with a small screen as with a tablet-sized one.

From laptops

  1. Laptops could become thinner and lighter, reducing the portability benefit of tablets.
  2. Laptops could gain better battery life, resembling tablet battery life.

If you look at what is actually happening in the market, you see all of these forces in play. All the forces that would make a tablet unnecessary or less appealing.

Before and when Steve Jobs announced the iPad, he repeatedly spoke of the challenges of targeting a market that sat between a smartphone and a PC. He said that a tablet had to be significantly better than smartphones and PC at some key tasks, if it was to succeed. Recent improvements in both of these categories have raised the bar even higher. The narrow wedge in which the iPad managed to carve a market is getting narrower. This has been a gradual process that has been ongoing since the first iPhone and the Macbook Air was introduced. Nothing new has happened.

For the iPad to continue its success, it has to find a way out of being squeezed from the top and bottom. The most obvious direction is up; replacing the PC. There are other possibilities however.


There is some discussion as to whether the increasing size of smartphones may have allowed smartphones to entrench on the tablet market. That is to say that larger smartphones are more tablet-ish and that owners of large smartphones will not see a use for tablets, hence lower iPad sales.

This discussion is a result of the analysts confusing customers on Android and iOS ecosystems.

iPad users are disproportionately iPhone users. They share the same ecosystem so you can use the apps that you bought on your iPhone on your iPad and vice versa. In terms of price, iPad users are not the bargain hunters that buy cheap Android phones, but are the people who value quality and also tend to buy iPhones. This is true if you look at countries. iPads are used a lot in high-income countries, which also use a lot of iPhones. Although I do not have the data to back it up, this assumption is rather obvious.

On the other hand, Android users are more likely to use Android tablets because they have the same ecosystem and because they either have less income are or more price-sensitive.

Hence the stagnant sales of the iPad is predominately a result of iPhone users’ purchasing patterns. There are far more iPhone users purchasing or with an intent to purchase iPads compared to Samsung users. If we look at phablet users in China and Korea, the difference is probably more extreme.

Then, if the people who are not purchasing iPads are using iPhones, then their purchase decisions are not being influenced by large-screen phones. This slowdown in iPad sales is not in any major way, a result of large screen phones. It is independent of phone screen size.

How Are iPads Actually Being Used in the Enterprise?

There is a lot of discussion on how tablets (iPads) are replacing PCs. I have been generally skeptical of this view based on tablet usage data (1, 2).

The discussion for tablets replacing PCs is generally based on the decline of PC sales coinciding with the rise in tablet sales. This is true. However, there is little discussion on cause and effect. It is totally possible that these sales trends are not strongly related; they may simply have happened at the same time by coincidence.

Also, there are many tech bloggers and analysts who claim that they have managed to get by on their iPads alone, and only using their PCs very rarely. Or some people will claim that their parents have simple needs which are completely covered by an iPad. I have no reason to doubt these arguments, but on the other hand, I have very little reason to believe that the majority of users, especially in corporations, would feel and act the same way.

What is sorely missing in the vast majority of discussions, is how corporations are actually deploying iPad. Things like to following;

  1. How many people in the organization are getting iPads?
  2. What are iPads being used for by which people?
  3. Do the people who use iPads stop using their PCs?
  4. How do the iPads integrate with the preexisting corporate IT setup?

We can only reach a good idea of the potential market size of corporate tablets if we carefully analyze these points.

A few days ago, an article was published on ITMedia (a Japanese IT publication) that described how and why a large company introduced iPads into their IT infrastructure. I thought that it was very insightful and I have listed some points below. It tells us what iPads are good for, and importantly, why they limited distribution to only their managers and executives.

  1. The company is Mizkan, a food company that has been around for 210 years (a history almost as long as that of the United States of America). This company has 2,900 employees and a revenue of 170 billion yen (~1.7 billion USD).
  2. They have been using IBM Lotus Notes/Domino within their IT infrastructure since 1996.
  3. One main function of the Notes system was workflow management. Since their business involves products that can directly damage customer’s health, accountability is key. They need to have a strict approval process.
  4. The managers who are responsible for the approvals are often on the road, who are often not able to frequently open their laptops. This led to delays in the approval workflow.
  5. They installed “Lotus Notes Traveller” into iPads together with some custom applications designed to work together with Notes. These iPads were handed out to the managers and executives who were responsible for approvals.
  6. As a result, they were able to significantly reduce the time to get approvals from all concerned executives and managers.
  7. Some executives have expressed that they don’t take their PCs around anymore and that the iPad is sufficient when on the road or at home.
  8. Importantly, Mizkan has no plans to introduce iPads to their lower-level office workers. This is because whereas executives rarely have to prepare documents themselves, normal employees have many jobs which use keyboards extensively. Mizkan predicts that normal employees will not be able to complete their tasks on tablets alone.

My takeaway from this article is the following;

  1. Corporate IT has many more functions that email, document/file sharing and project management. There functions are already provided by legacy solutions.
  2. The new generation devices (smartphones and tablets) are not going to replace corporate IT infrastructure overnight. Instead, they have to integrate with the current systems. This means integration with Lotus Notes, Microsoft Exchange and all the other solutions that corporate IT have accumulated.
  3. The majority of workers in the office are going to stick to PCs. Hence PCs will most likely remain in the center.

Will tablets never replace PCs? I don’t necessarily think so. I think they eventually will. But I think it is increasingly important to reflect on Steve Jobs’ own words as he introduced the iPad;

  1. Better at browsing the web than a laptop.
  2. Better at Email.
  3. Better at enjoying and sharing photographs.
  4. Better at watching videos.
  5. Better at enjoying your music collection.
  6. Better at playing games.
  7. Better at reading eBooks.

If there is going to be a third category of device, it gonna have to better at these kinds of tasks than a laptop or a smartphone. Otherwise, it has no reason for being.

Extending Steve’s discussion, if the iPad is going to replace the PC, it’s gonna have to better than a laptop at current corporate IT tasks.

That’s a pretty tall order.

PC and Tablets Sales to U.S. K-12

The Wall Street Journal published an article titled “Chromebooks Take Other Mobile PCs to School” which cited estimates of laptop and tablet sales to U.S. K-12 schools.

This compares to data that was released from the NPD group late last year. The NPD group data was for PC (desktop and laptop) and tablet sales through “U.S. commercial channels” (sales through VAR that are mostly targeted towards education, government and corporations). I have previously commented on the NPD data on this blog (1, 2, 3).

The NPD Group data and following discussions pointed to the following;

  1. Chromebooks are mostly selling to education.
  2. Chromebooks are competing with iPads or expanding the market. They are not taking the market from Windows.
  3. The NPD data is for computers sold to schools through VARs, not to students. The computers are strictly the property of the schools and hence purchase is not an end-user decision. In Steve Jobs’ words, these are sales through “orifices”.

Here I would like to take a look at the FutureSource data that the WSJ cites to better understand the picture.


The FutureSource data seems to confirm the following;

  1. Chromebooks are indeed selling well to education.
  2. iPads are currently extremely strong in education. Much more so than Windows. It is understandable that the main battleground is iPad vs. Chromebooks and not Windows vs. Chromebooks.

Additionally, it seems that Android tablets are non-existent in schools.

As for the comments in the WSJ article that are in favor of the Chromebooks, they are interestingly from the school IT departments: the “orifices”.

One fan is Kyle Laauser, the information technology director at Saint Joseph Academy,

Explaining the purchase, Mr. Laauser pointed to the devices’ low price, $279 each including a $30 setup fee paid to Google, as well as the ease with which he could set them up for the entire student body.

All in all, the WSJ article seems to be in good agreement with the NPD data and the ensuing discussions.

Tablets and Laptops are Used for Different Things

There is a lot of talk about tablets replacing PCs (desktop and laptops). The people who make this point usually cite the decline of PC sales which coincided with the rise of tablets.

I have always been rather skeptical of this view because for me, laptops and tablets served very different roles. It’s not that I program therefore I need a laptop kind of thing. It’s that for any kind of work that I do in my office, a laptop is more convenient. On the other hand, when I am on my sofa playing with kids, then a tablet is much better.

The general tendency is to segment by people; i.e. power users who do a lot of stuff vs. casual users who mainly just do email and a bit of the web. I think this is the wrong approach.

The correct approach is to segment by the jobs-to-be-done. Hence even for a single person, he is sure to have multiple jobs-to-be-done in the course of a day. Some of these are better suited for a laptop and some are suited for a tablet. Or they may be an old lady who just wants to see photos of her grandchildren. A tablet would be ideal for her. Since this discussion is about form factors, the posture is also very important; are you at your desk, are you standing, are you reclining on the sofa, are you lying down on bed, or are you crouching in the toilet.

In March 2013, Chitika published data that showed when people used their respective devices to surf the web during the day.

  1. Smartphones dip during working hours, but are still used during work hours, especially during commute hours.
  2. Tablets are used a lot less during working hours and are mainly used for leisure.
  3. PCs usage peaks during working hours and also during leisure hours.




From the charts above, it is evident that tablets usage is not replicating PC usage. Although there is likely to be some overlap, it is clear that they are being hired for different jobs-to-be-done.

According to a recent interview between Apple executives Phil Schiller and Craig Federighi and MacWorld, Apple seems to think the same way.

“It’s not an either/or,” Schiller said. “It’s a world where you’re going to have a phone, a tablet, a computer, you don’t have to choose. And so what’s more important is how you seamlessly move between them all…. It’s not like this is a laptop person and that’s a tablet person. It doesn’t have to be that way.”

“Sometimes you want a large display, with many different windows open, and sometimes you just want to lay back on the couch or are standing at the bus stop. There’s a natural form factor that drives the optimal experience for each of those things. And I think what we are focused on is delivering the tailored, optimal experience for those kinds of ways that you work, without trying to take a one-size-fits-all solution to it.”