Flash POV: Do Mobile Devices Have A Blurred Lines Problem?

Earlier this year, Blackberry CEO Thorsten Heins questioned the future of tablets in a Bloomberg interview, saying that “in five years, I don’t think there’ll be a reason to have a tablet anymore.”  Indeed, the release of smartphones with larger screens, such as the Galaxy Note, have given rise to the term “phablet” to indicate a device that is somewhere between a phone and a tablet, ostensibly eliminating the need to have both devices.

So are the lines between mobile devices blurring?

Maybe a little, but we don’t see it having any kind of substantial impact on tablet sales in the near future.  For now, the lines are more distinct than ever—even if the terminology is not.  Here are some key points to consider:

+        Phablet is a misleading term, because it’s really just a smartphone with a bigger screen.  A phablet (defined as having touchscreen between 5 and 6.9 inches) is a replacement for a smartphone.

+        In the early days of smartphones, smaller devices were desirable, but now that touch has become more sophisticated and responsive, screen sizes have got larger.

+        MAGNA currently estimates that there are about 169 million smartphones and 87 million tablets in the hands of Americans—but the latest ComScore data shows that “phablets” only account for about four percent of smartphones (just under seven million).

+        Recent research from Flurry confirms our own findings that tablets are largely an at-home, media-playing device (content, design, gaming), while smartphones are task-driven (navigation, shopping, mobile banking).  We think “phablets” fall into the latter category as well.

+        We agree with Time reporter Jared Newman that “phablets” are a niche, not a fad, and their emergence is simply an indication that consumers are enjoying bigger screens.

+        A recent downward trend in iPad sales has led to speculation that tablets could end up becoming more niche themselves, but it’s not that surprising given the influx of cheaper Android devices like the Kindle Fire.  Tablets remain the fastest growing media machines in history, and we project continued (albeit slower) growth over the next five years.

As the debate continues, what’s important for marketers is to be aware of is how consumers engage with brands on the various devices:

+        Phones = more ownership and more situations

+        Phones = shopping as an activity (product reviews/research, driving in-store, show-rooming, driver of purchase intent)

+        Tablets are used mostly at home, for personal content consumption

+        Tablets generate better video ad recall than other devices (see June 2013 Media Economy Report), and generate more spending per user compared to smartphones

+        eMarketer: In 2013, 63% of tablet users will make purchases vs. 39% of smartphone users


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Tablet Sales Rise as PC Market Stagnates

The world’s going mobile and the PC just can’t keep up.  Recent reports indicate that last quarter, the number of tablets shipped was more than half the number of PCs, compared to the 3rd quarter numbers from November, which showed almost 1 in 4 computers sold were tablets.  The trend does not show any sign of slowing down, and suggests more than a shift in computing hardware sales. Windows may now be losing its long-lived market dominance.  Of all PCs and Tablets shipped in the 4th quarter, a third of them run OSX, iOS, or Android.  The definition of “personal computing” is certainly changing. Will Microsoft be able to adapt in time?

Intel CES 2013 Announcements

Marketing and quad-core processors don’t necessarily go hand in hand, but Intel’s chips actually power many of today’s smartphones, tablets and computers which allow us to enjoy the high-tech media experiences of today. Intel enables robust gaming on tablets and is responsible for the shrinking computers as processors get smaller and smaller. They’ve also forged an interesting partnership with Comcast to power second screen viewing. Needless to say, we were at the press conference to take some notes.

Smartphones: Intel is taking a crack at the emerging smartphone market in developing nations with their new Atom chip, Z2420 which is 1.2 GHz and optimized to run Android apps speedily. Acer and Lava will develop the hardware for these phones in the future.

Tablets: The first quad-core Atom chip, dubbed “Bay Trail” comes to Windows 8 and Android tablets later in 2013. Better battery life, cheaper prices and twice the performance of the previous generation.

PCs: Releasing new 7W Core processor shipping to manufactures today. Allows for devices to be 20% thinner with superior performance. Also releasing 4th generation Core for ultrabooks which can accomodate 13 hours of battery life and an ultrabook that’s less than a half inch thick. Wow.

Perceptual Computing: Intel is developing a package in partnership with Nuance that allows for more natural interfaces incorporating voice controls, facial recognition security systems, eye tracking and more.

Comcast Partnership: Intel will be partnering with Comcast to let customers view live and on-demand TV on Intel-powered device via Intel Puma 6MG-based XG5 multiscreen video gateway.