Microsoft bleeding millions on Surface tablets

Posted on July 31, 2013 by - News, Products

surface-rtMicrosoft’s hardware curse is still alive and kicking. A couple of weeks ago Microsoft announced a $900 million charge for heaps of unsold Surface RT tablets and last week CEO Steve Ballmer admitted that Redmond got carried away and built too many Surface RTs, just in case there was anyone in the industry who didn’t know it was a massive flop already.

In its latest annual regulatory filing, Microsoft revealed that its combined revenue for both the Surface RT and Surface Pro was $853 million. The RT was introduced last October, while the Pro came along in February. Microsoft’s fiscal year ended June 30. The IDC puts the combined shipments of all Windows RT tablets, including the Surface, at just 200,000 in the first quarter of the year.

In other words, the write down was bigger than the actual revenue.

As if that wasn’t enough, Microsoft also reported a 10 percent increase in marketing expenses. Much of that cash went towards Surface advertising campaigns, which were apparently as effective as the French armed forces in 1940. Adding other expenses such as R&D and distribution into the mix only makes the situation worse.

Microsoft clearly doesn’t need more bad Windows RT news, especially not today, but Asus Chairman Jonney Shih obviously didn’t get the memo. He told AllThingsD that his company would not launch a new Windows RT tablet, which was to be expected as he already moaned about the platform earlier this year.

“The result is not very promising,” he said.

He added that people still use a lot of legacy Windows applications and that Asus will focus on Intel-based products as well.

Unfortunately for Microsoft, Shih is not the only industry leader who thinks Windows RT is dead in the water.

Tablets to outsell laptops by 2 to 1 next year

Posted on July 30, 2013 by - News, Products

cheap-tabletsIntel is starting to talk up its 2-in-1s, but for the time being tablets seem to be beating laptops by a ratio of 2 to 1.

According to NPD DisplaySearch, shipments of tablet PCs will hit 364 million units next year, more than double the projected 177 million for laptops of all shapes and sizes, including Intel’s favourite vapourware of the day, 2-in-1 hybrids.

What’s more, tablet PC sales are expected to hit 589 million by 2017, while sales of laptops and ultraslims will hit 176 million units. Laptops aren’t going anywhere, they just won’t see much growth and they will be complemented by tablets, not replaced by them.

“The PC market is clearly shifting away from notebooks and toward tablets,” said Richard Shim, senior analyst with NPD DisplaySearch. “Supply chain indications reveal that previously planned production of notebook PCs is being pulled back due to declining adoption and that brands are gradually increasing the number of tablet PC models in their product mixes. Panel and finished goods suppliers are also increasing production of displays and other components for tablets in order to keep up with the market changes.”

tablet-shipments-NPD

Most growth in the tablet space is currently coming from emerging markets, where it is having an effect on PC sales. In markets with low PC penetration, most first-time buyers choose laptops, but an increasing number is turning to even cheaper tablets, leading to direct cannibalization. In addition, the market is shifting to cheaper and smaller tablets, which are a better fit for emerging markets than big, high-end tablets.

“Smaller tablets are important, because they will encourage adoption in emerging regions,” Shim said. “Smaller screen sizes translate to lower priced tablet-PC options, since display panels tend to comprise just over a third of the total cost of a tablet, which makes them attractive in price-sensitive markets.”

The choice of tablet form factors is increasing and smaller tablets, with screens up to 8 inches, are expected to account for 59 percent of sales this year. In 2015 they will grab 63 percent of the market and there is a shift from 7-inch panels to 7.5- and 8-inch units. This is encouraging news for laptop makers, as it indicates that consumers are buying cheap and small tablets as companion devices, rather than replacements for proper mobile PCs.

ODM laptop shipments rebound, up 0.4 percent

Posted on July 30, 2013 by - News

ancient-laptopWorldwide shipments of laptops in the second quarter reached 39.4 million units, up 0.4 percent over the first quarter, according to WitsView. It doesn’t sound like much, and it isn’t, but given the state of the PC market any hint of growth is an encouraging sign.

Although overall shipments are up, the nine leading laptop makers saw an 0.7 percent decline quarter-on-quarter, which was caused by inventory problems. New designs based on Intel Haswell chips are coming online and big brands are apparently not getting rid of Ivy Bridge models fast enough.

Hewlett Packard had a good quarter, shipping 7 million units, up 10 percent from Q1, while Lenovo shipped 6.3 million units and stayed relatively flat. Acer and Asus dropped 0.2 and 1 percent respectively, while Toshiba had a terrible quarter, ending with a 12.6 percent slump.

Researchers noted that the market started to slow down in June, as consumers held back on purchases and decided to wait for Haswell products. However, the Haswell rollout was hampered by inventory issues, as manufacturers could not liquidate their Ivy Bridge stock in time. It was basically a vicious circle.

WitsView reckons the market could start to recover in the second half of the year, due to seasonal trends. If all goes well, Q3 laptop shipments could grow seven to nine percent. Sales by second- and third-tier brands are also expected to go up.

Heatwave and summer sales push retail up

Posted on July 30, 2013 by - News

highstreet South endJuly retail sales in Britain rose at their fastest pace since January, thanks to summer shopping and the unseasonal heatwave.

According to the Confederation of British Industry (CBI), retail sales hit their six-month high in July. Retailers recorded strong demand for clothing, footwear and just anything related to tropical temperatures.

Europe missing BYOD gravy train

Posted on July 30, 2013 by - News

nexus4-ceEurope appears to be behind the curve when it comes to BYOD. The “bring your own device and ruin your techie’s day” trend is taking off in North America and Asia Pacific, where BYOD volume exceeds 80 percent of all business smartphones purchased for business users.

In Europe the figure is less than half of business smartphone sales, according to Strategy Analytics.

Sarcastic punters could say that the poor showing has something to do with the fact that many Europeans can only bring their own device to the employment office, but that’s just part of the problem. The BYOD trend is facing a lot of opposition in Europe from all fronts.

Operators dislike it because they believe it siphons revenue away from stable corporate contracts and messes with their separate billing systems for commercial and civilian users. Enterprises have their own concerns. They are protecting their operator support commitments that are available only through corporate contracts. Many end-users aren’t willing to embrace restrictions they would have to follow due to roaming and other problems.

In spite of European Commission caps, roaming is still a big deal in Europe and it obstructs BYOD growth. Carriers aren’t willing to do much about it and split billing options to better meet the needs of businesses and end-users. Direct billing options that allow operators to bill individual workers directly for their corporate plan seem like the obvious solution, but they are very hard to implement across Europe.

“The time for European operators to fear BYOD needs to be over,” says Kevin Burden, Director of Mobility at Strategy Analytics. “Accepting the change will lead to additional revenue opportunities and will help to distinguish themselves to the corporate customer in a time when the EU continues to put regulations and policies in place that further homogenise their services. It will be a huge competitive win for the first operator that gets it right in a time when every European operator is scrambling to protect its markets and understand how to best support the trend.”

As usual, it all comes down to EU lawmakers and their counterparts in member states, which basically means that this problem won’t be tackled anytime soon.

 

Intel wants $299 hybrid 2-in-1s

Posted on July 30, 2013 by - News, Products

Intel-logoIntel said yesterday it will host a symposium in Taipei to discuss the development of 2-in-1 hybrids with supply chain partners. The event is part of Intel’s push for cheaper x86 devices, which could take on ARM-based tablets, at least in theory.

Intel knows that x86 tablets are simply too pricey to compete with ARM tablets, both on the hardware and software fronts. However, if it manages to push prices down, upcoming 2-in-1s could still be competitive.

Intel VP and general manager of global ecosystem development Zane Ball told reporters that he expects prices of 2-in-1s to fall next year, thanks to lower component costs. He said most companies are currently capable of delivering $399 devices, but the real challenge will be getting the price down to $299, reports Focus Taiwan.

It won’t be easy. At the moment there are just 15 products that fit Intel’s 2-in-1 spec and the number is expected to grow to 60 designs next year. These are hardly impressive figures and many analysts believe Intel will have a very tough time marketing the devices, especially if prices remain high.

However, although $299 is still not enough to combat cheap Android tablets, it is still an interesting price point. Cheap 2-in-1s could do well in some niche markets. They sound like the perfect upgrade for netbook users and they could steal some market share from Google’s ultra-cheap Chromebooks.

Higher end models could be a replacement for ultraportables and small Ultrabooks.

Macro 4 to host UK IBM mainframe open day

Posted on July 29, 2013 by - Events, News

ibm-officeSoftware and services company Macro 4 is hosting an open day for the UK’s IBM mainframe users to discuss plans for the next generation of users.

The open day will be held on 26 September, 2013, for mainframe customers looking to plan strategies around the next generation of mainframe development and support staff.

Panel sessions, demonstrations, workshops, and an IBM keynote are all planned, with Peter Siddell, IBM UK Technical Specialist for CICS Tools on z/OS CICS Tools Development and Dr. Herbert Daly, Senior Lecturer in Computer Science University of Bedfordshire both speaking.

In particular, the event will focus on alternatives to the 3270 green screen interfaces – with a view to making accessing the mainframe platform easier and more intuitive, especially considering how many were brought up on Microsoft and Apple GUIs.

Macro 4 plans to show off mainframe interfaces running on Eclipse IDE, especially looking at how Eclipse can feel more ‘modern’ to the latest crop of developers and support staff, as well as providing gains in productivity and usability compared to the conventional alternatives – for existing and new mainframe users.

The event will be held at Macro 4’s Crawley HQ, a short trip from Gatwick.

Macro 4’s commercial and technical director, Jim Allum, said a key focus for development over the last few years has been providing flexible access to mainframe products, and “in general to the mainframe environment in which they operate”.

 

Microsoft’s Ballmer cries into his beer

Posted on July 29, 2013 by - News

steve_ballmer Microsoft’s delightfully understated CEO has admitted that everything he has done over the last year has been a cock-up.

According to the Verge, Steve “there’s a kind of hush” Ballmer has publicly admitted that Microsoft  built too many Surface RT tablets, and it’s not selling as many Windows devices as he wants.

The confession came during an internal town hall event last week when Ballmer and COO Kevin Turner both addressed the recent $900 million hit for Surface RT and the sales pace of Windows across various devices.

Ballmer tried to cheer himself up by talking about getting Instagram for Windows Phone, and its plans for the next-generation Surface.

He said that Microsoft had built a few more Surface RT tablets than it could sell.  Either that or they had shipped at a price which was so expensive no reseller could get them off the shelves.

Recently Ballmer cut the price of its Surface RT tablets by 30 percent saying that the price adjustment was necessary to sell Surface RT devices.

Ballmer confirmed new devices are currently being tested with incremental improvements.

But Ballmer was even more gloomy when it came to the performance of Windows 8 which shipped as it Microsoft was trying to flog Android instead of its flagship decktop,

He said that Vole was not selling as many Windows devices as it  wanted  and a lack of devices in retail stores hasn’t helped Windows 8’s initial prospects.

Ballmer said that Microsoft was focusing on the back to school period and the holiday season to ensure Windows 8 and Windows 8.1 devices are available.

 

Shop rents in Cardiff tumble 70 percent

Posted on July 29, 2013 by - News

cardiffThe high street is hurting and property owners in Wales seem to be getting the worst of it. According to property experts and the council, the number of empty shops in Cardiff increased from 9.7 percent in October 2008 to 15.8 percent last October.

As a result, shop rents have dropped by up to 70 percent in parts of Cardiff’s historic city centre, reports Wales Online. The depressing figures were presented to Cardiff council planners by property firm Calan Retail, which is struggling to find tenants for its own property.

Calan has now applied for permission to change the use for the ground floor and upper floors in its Habitat building to restaurants and cafes, as they should do better than retail shops. Calan executive Andy Sturrock told the council that the retail market went through a seismic change over the past six years.

Rents on Queen Street have fallen by a third since 2008, but the worst example comes from a unit at Cardiff’s Capitol Center. The unit used to be rented by fashion chain Oasis for £224,000 per annum, but last year it was acquired by a sandwich shop for £70,000.

Online retail challenged by poor infrastructure

Posted on July 29, 2013 by - News

visa-epayOnline retailers are on a roll, but many of their sites aren’t performing well due to some rather basic technical limitations.

According to a recent report from NCC Group, the top 50 online retail sites in Britain exhibited poor website performance last quarter and much of the problems were caused by ancient internet connections.

The end result was that fancy sites with plenty of flash content offered a less than stellar shopping experience, as they were simply too slow. NCC Group tested the sites and found that the average download speed was 6.7 seconds on a 2Mbps connection. The average speed in Q1 was 6.27 seconds, but research has shown that load times over 3 seconds tend to drive customers away.

It seems that online retailers are sparing no expense when they develop their sites, so they end up with elaborate and relatively “heavy” websites that take too long to load. Average internet connection speeds aren’t keeping up with the trend.

Worse, the top 50 retail sites averaged a downtime of 4 hours and 17 minutes, which is also up from last quarter’s 3 hours and 23 minutes. It seems that feature packed sites are not only slow, they tend to be less reliable as well.

“It’s a worrying trajectory and one that retailers need to address quickly. If a website is slow to load, consumers will simply go elsewhere, while any downtime will lead to a direct loss of sales,” Bob Dowson, director of NCC Group’s website performance division said. “The potential within the online retail space is massive. In 2012 the value of online retail to the UK was ￡78bn*, and that’s only going to grow. Retailers that prioritise their website performance will put themselves in a great position to fulfil their potential in the market.”

The financial performance of the UK e-tail market has been largely positive in Q2 2013, with shoppers spending 18.3 percent more in June compared to 2012. However, this report indicates that it could have been a more successful quarter if retailers had prioritised consumer experience through web performance.

iPad market share at an all-time low

Posted on July 29, 2013 by - News

cheap-tabletsApple’s share of the tablet market appears to be at an all-time low, thanks to strong competition from cheap and cheerful Android tablets.

Despite the slump, Apple still remains the biggest player in the tablet market, but it is no longer the only outfit in town.

According to Trend Force, iPad sales dipped from 17 million to 14.6 million units last quarter. It ended the quarter with a 35.5 percent market share. Samsung ranked second with 8.8 million units and a 21.4 percent share. This is rather surprising, since Samsung’s tablets tend to be overpriced and overhyped.

Asus wound up in a distant third spot, with shipments of 1.6 million and a 3.9 percent market share. Acer wasn’t far behind, with 1.5 million units and a 3.6 percent share. Amazon ranked fifth with 1.1 million units and a 2.7 percent share.

Microsoft and Google in next, at 0.9 million and 0.7 million respectively and the figures are surprising to say the least. Google’s Nexus 7 was supposed to be a cheap, high volume device, but it seems it was outpaced even by Microsoft’s Surface tablets.

It should be noted that Apple is gearing up to introduce the fifth generation iPad and the second generation iPad mini. It current line-up is rather dated and the new iPads could turn things around. Google introduced the new Nexus 7 last week and it is getting some very positive reviews as we speak.

However, we believe the most interesting number in the report has nothing to do with Apple, Samsung or Google. Makers of white-box tablets sipped 9.7 million units last quarter, for a combined market share of 23.5% percent. In other words for every Surface RT or Nexus 7 tablet sold last quarter, nameless Chinese manufacturers sold ten of their equally nameless tablets.

3D printing market worth $4.45 billion by 2016

Posted on July 26, 2013 by - News

taipeiThe market value for 3D printing could zoom past $4.45 billion as soon as 2016, according to Taiwan’s Market Intelligence & Consulting Institute (MIC).

The figure is roughly double its value in 2012 at $2.15 billion – itself 22.2 percent growth from the previous year.

MIC notes that the current picture it’s a long way since the initial rounds of investment into 3D printing in the 80s, including from companies like 3D Systems, Stratasys and Helisys. But an injection of R&D cash in recent years has been progressive for the technology and lead to an expansion in the application market.

Now, thanks to R&D progress, a wide range of materials can be printed, including metals, ceramics, resins, plastics, nylon, PVC, ABS plastic and wax.

Since these developments, 3D printing has found itself being used for the production of metal modules, personalised goods, automobile and airplane parts, medical apparatus, gadgets, consumer goods and jewelry.

MIC points out that governments are expressing their support for advances in 3D printing and other big players, including in the Asia Pacific region, have entered the scene.

Brick and mortar, ecommerce start to converge

Posted on July 26, 2013 by - News

visa-epayPhysical retail outlets and e-commerce operations are starting to converge and consumers are starting to treat all channels as shopping, which it essentially is. Although high streets are suffering, e-commerce is becoming a force to be reckoned with, but e-commerce and brick-and-mortar retail are not mutually exclusive.

Google reckons that retail channels are converging, as traditional retailers are starting to make inroads in e-commerce. Physical shops are undergoing a transformation, they are becoming more focused on brand building than actual retail and they are becoming catalysts for related e-commerce services.

In a recent whitepaper Google VP of ads and commerce Sridhar Ramaswamy concluded that consumers no longer see a distinction between online and offline shopping. The experience is becoming seamless and intertwined.

“Whether it’s searching on a laptop, browsing main street shops, or hanging out at the mall — it’s all shopping,” he wrote.

Since shoppers seem to be growing blind to the distinction between e-commerce and traditional shopping, they might end up with similar expectations for customer service regardless of the channel, reports Practicalecommerce.com. In other words, they might expect the same level of service online as they do in actual stores. Salespersons keep physical retail going by offering consumer advice and more information than sterile e-commerce sites, while the online channel is unbeatable for comparing prices and saving money.

“Today’s shoppers have become accustomed to doing their own research to get the maximum value out of every dollar they spend, and to feel secure about the purchases they’re making;” Ramaswamy wrote. “With this power shift comes a great opportunity for retailers; those that use tools and insights from the web have the opportunity to close the gap between the smart online consumer and the offline retailer, and stand out in a competitive marketplace.”

Searching for products and comparing prices online is easy, provided one knows what to look for, and this is where salespersons need to be involved, with expert advice. Getting a better deal on a product doesn’t really matter if that particular product does not meet the customers actual needs and properly informing and advising consumers online is just as important as having as competent salesperson in a brick-and-mortar shop.

Apple and Samsung lose smartphone market share

Posted on July 26, 2013 by - News

smartphones-genericApple’s iPhone juggernaut appears to be running out of steam. Although the company beat Wall Street expectations last quarter, with 31.2 million iPhones shipped, it also managed to lose market share.

Apple’s smartphone share now stands at 13.1 percent, down from 16.6 percent in the second quarter of 2012. Although Apple’s shipments were up from 26 million a year ago, the market grew at a somewhat faster pace. The same goes for Samsung, which shipped 72.4 million smartphones last quarter, up from 50.3 million last year. It share dropped from 32.2 percent to 30.4 percent.

Total smartphone shipments were up 52 percent, 237.9 million compared to 156.2 million units in Q2 2012. The market seems to be accelerating, maybe even overheating. However, although smartphone saturation in western markets is becoming an issue, particularly in the high-end, Asia appears to be doing quite well.

IDC-smartphone-chart-Q213

Chinese smartphone churners had a very good quarter. Lenovo upped its market share from 3.1 percent a year ago to 4.7 percent last quarter. Lenovo shipped 11.3 million smartphones last quarter, roughly a third of what Apple managed to ship – but most Lenovo phones were sold in China, hence the tech press didn’t really cover its success. ZTE also did well, with shipments hitting 10.1 million last quarter, up from 6.4 million a year ago. LG did surprisingly well, with 12.1 million units shipped, up from just 5.8 million a year ago.

However, saturation is becoming a big source of concern for smartphone makers. Most future growth  is expected to come from emerging markets, which tend to prefer low cost devices. This will result in lower ASPs, more competition and lower margins. It will also open the room for smaller brands and dozens of Chinese no-name smartphone makers.

IDC’s figures also reveal that the combined share commanded by smaller brands is up and that smartphone shipments have finally outpaced feature phone shipments. Few consumers who haven’t transitioned to smartphones over the last few years will pick up a high-end device, leaving even more room for cheap smartphones.

The trend has not gone unnoticed by smartphone makers. Apple is reportedly working on a cheaper, plastic version of the iPhone. Since Apple doesn’t have much to offer outside the high-end market, it is particularly vulnerable. Samsung and HTC are talking up their new minis as if they were flagship products, Google Motorola’s new Moto X is a mid-range device, not a pricey superphone.

In recent years the focus was on pricey high-end phones, with most sales coming from affluent markets, backed by carrier sweetheart deals. This created a rather absurd situation, as unit sales of high-end phones were often much higher than those of their mid-range and low-end siblings. As emerging markets enter the fray, this odd trend appears to be over.