10 Important Takeaways On The Emerging 2-In-1 Market
The Rise Of The 2-In-1
Laptop shipments are sagging. Tablet sales are anemic. But sales of those crossbreed laptop/tablet devices known as 2-in-1s are expected to see significant growth in 2015 and beyond.
It's true that 2-in-1s, such as Microsoft Surface 3 (pictured) and the Asus Transformer, still only represent a tiny sliver of the overall PC market. But the devices are growing steadily in popularity based on the form factor’s ability to pack both the portability of a tablet and the performance of a laptop, according to analysts.
By 2019, IDC reported, one in 10 PCs sold into the U.S. commercial sales channel will be a 2-in-1 device. Here's what solution providers need to know about this emerging market.
What Is A 2-In-1?
It's easy to get lost in definitions about what a 2-in-1 device is. Simply put, 2-in-1s are closer to a traditional laptop with a (sometimes detachable) keyboard. This differs from tablets (such as an iPad) with a keyboard accessory. Two-in-ones can perform as either a laptop -- most often with a full-sized keyboard -- but also have a detachable touch-screen display that can operate as a tablet.
They are sometimes called a detachable, swivel, slider, tent or Ferris wheel, depending on the hardware style.
Examples are Hewlett-Packard's HP Pro x2, Dell Latitude 13 7000 Series and Toshiba's Portege Z20t.
How PC, Tablet And 2-In-1 Shipments Compare
Laptop shipments in mature markets are expected to contract -2.9 percent in 2015, according to IDC. Worldwide tablet shipments are expected to see 2.1 percent growth, IDC said. Two-in-one shipments in North America are expected to see 60 percent growth, the research firm reported.
To be clear, the 2-in-1 market is not booming. Growth in the market -- benefited from a much smaller starting point -- underscores how small this category is to begin with. Two-in-ones still will only represent less than 4 percent of the U.S. commercial PC market in 2015, according to IDC.
Two-in-One Market Share Leaders For U.S. Commercial Shipments
Microsoft and its Surface Pro 3 owns 42 percent of the market.
Asus and 2-in-1s, such as its Transformer Book T300, make up 20 percent of the market.
Dell represents 17 percent of the market with 2-in-1s such as its Latitude 13 7000 Series.
Hewlett-Packard owns 11 percent of the market with systems such as the HP Pro x2.
After that, Toshiba, Lenovo and Fujitsu pick up the majority of U.S. commercial sales.
What’s Sparking Growth?
Several trends are contributing to the category's growth, such as a greater awareness of the form factor, a need to stop device sprawl, a realization that tablets can't fulfill workplace productivity expectations, and, finally, Windows 10. The release of the OS this summer is expected to spark growth in the 2-in-1 category.
Windows 10 is expected to spike sales, according to analysts. Why? Because improvements made to the OS corrected perceived wrongs of Windows 8, and because of typical refresh cycles for new Microsoft OS releases.
Windows 10 also is expected to drive 2-in-1 sales because the OS is far more touch- and tablet-friendly for enterprise applications compared to Windows 8.1, and there are also more enterprise apps available.
Reducing Device Sprawl
According to NPD, the average SMB employee uses 3.5 computing devices. NPD said 23 percent of SMB employees will abandon their tablets and laptops and seek a 2-in-1 form factor that offers them a balance of portability and performance.
Underlying that transition is a need by businesses to streamline device management. Consolidation can help reduce device software and maintenance cost from 3.5 devices to one.
Channel Partner Opportunities
For channel partners 2-in-1s represent unique opportunities, including a need for the form factor when it comes to productivity in the verticals: health care, pharmaceutical sales, police and safety, field engineers and construction.
Channel partners also can benefit from deploying 2-in-1s to customers because the devices require unique opportunities to deliver additional enterprise mobility management services, said analysts.
How 2-In-1s Stacks Up Against Tablets And Laptops
According to IDC, laptops accounted for 74.8 percent of PCs sold into the U.S. commercial space in 2014. By 2019, that percentage will drop to 61.3 percent.
In 2014, tablets represented 23.6 percent of devices sold into the U.S. commercial space, IDC said. By 2019, that percentage is expected to grow to 28.8 percent.
Two-in-ones, according to IDC, represented only 1.5 percent of PCs sold into the enterprise in 2014. But by 2019, one in 10 PCs will be a 2-in-1, or 9.8 percent.
What Is Holding Back 2-in-1 Sales
High prices of 2-in-1s are hurting adoption by business users, according to IDC. "For mass adoption, we need to see reasonable system prices and bigger screens," said Rajani Singh, senior research analyst at IDC.
Singh added that the majority of 2-in-1s had screens of 12 inches or less. "If 2-in-1s want to capture a bigger share of laptop users they need bigger screens. Laptop productivity is closely tied to the screen size," she said.
How 2-in-1s Will Win Over Android And iOS
Microsoft and Intel have both aggressively promoted the 2-in-1 as well-suited for the Windows operating system. While both Android and iOS devices outsell 2-in-1s even in the workplace, the use-case scenario for a Windows 2-in-1 over an iOS or Android tablet includes access to the entire Windows software ecosystem, along with supported peripherals such as PC mouse, ports and a bevy of USB dongles.
Another software advantage includes the ability to spawn multiple windows and run business-class programs that haven’t been ported to Android or iOS.
The Apple Factor: MacBook 2-in-1 On The Horizon?
If Apple becomes a 2-in-1 player, it could make the category. But don't hold your breath.
Apple's CEO Tim Cook (pictured) has regularly bashed the idea of a 2-in-1 as ludicrous. In fact, Cook called the first-generation Microsoft Surface Pro "a fairly compromised and confusing product" and compared it to "a car that flies and floats."