The tech sector has always been hyper-competitive, and never has this been truer than in 2013. For the likes of Twitter, Samsung and Google, the harvest of 2013 was bountiful. However, from the perspective of Nokia, Microsoft, BlackBerry or the PC industry, it was a year to forget. Here’s a look back at 10 of the big events and trends that shaped the tech sector in 2013. 1. One billion smartphones sold this year – and counting The most important tech story of 2013 didn’t take place with a major product announcement or a Steve Jobs-style keynote speech. Instead, it took place without fanfare at an ordinary mobile phone retailer somewhere deep in suburbia. It was there that a consumer decided to purchase the one billionth smartphone to be sold during 2013. To put that number in perspective, it is projected that 227.3 million tablets shipped worldwide during 2013, 158 million television sets, 180.9 million portable PCs and 134.4 million desktop PCs. Meanwhile, figures from market analysts IDC show smartphones also outsold featurephones worldwide for the first time in history during the first quarter of 2013. What this means is that while smartphones now account for more than half of the 418.6 million mobile phones shipped worldwide each quarter, there are still millions of old-fashioned featurephones being sold each year. Especially in the low-end of the market and in emerging economies, that means there’s plenty of extra room for growth in the future – especially at the low-end of the market. Make no mistake about it. The smartphone industry is big – far bigger than the PC or TV business. And it’s only going to get bigger in 2014. 2. Google Android and Samsung: The juggernaut rolls on The biggest winners from the spectacular, ongoing growth of the smartphone market have been Samsung and Google. Last year, smartphones running Google Android outsold Apple. In 2013, that trend morphed into total industry domination. For example, of the 261.1 million smartphones shipped worldwide during the third quarter of 2013, 211.6 million or over 80% ran Google’s Android operating system. That compares to just 33.8 million iPhones, representing around 12.9% of the market, and a measly 3.6% for Windows Phone. Samsung managed to ship 72.4 million smartphones during the second quarter of 2013 alone, representing around 30.4% of the market – more than double Apple’s sales during the same period. Those device sales also mean increased component orders flowing through the various divisions of the South Korean tech conglomerate, which manufactures everything from semiconductors to batteries and smartphone displays. The growing strength of the South Korean electronics behemoth is demonstrated by its advertising and marketing budget, which has been estimated at around $US14 billion worldwide. To put that figure into perspective, as of 2011, North Korea’s entire national economy was estimated to stand at $US12.385 billion. 3. The PC industry bloodbath While Google and Samsung have had a stellar year in 2013, the same certainly can’t be said for the PC industry. The September quarter was the sixth consecutive quarter of falls, according to Gartner, with shipments falling to 80.2 million units for the quarter from 87.8 million a year earlier. Figures released by IDC forecast PC shipments for the full year to fall 9.7% in 2013. More alarmingly, it appears the emerging middle class in China, India and Brazil aren’t keen on buying computers, with total PC shipments in emerging markets expected to drop from 205.2 million to 185 million this year. Australia and New Zealand led the trend, with a massive 21% year-on-year fall in shipments for first quarter in Australia, along with a more astounding 27% fall in New Zealand. The implosion of the PC market was disastrous for a number of PC makers, including Dell, HP and Acer. In August, HP announced a major shake-up of its senior management team after announcing a large 15% year-on-year drop in net earnings and a 22% drop in revenue from consumer devices during its quarterly results. That same month, Dell reported a massive 72% year-on-year collapse in quarterly earnings, while a consortium including founder Michael Dell, Silver Lake Capital and Microsoft successfully fought off high-profile investor Carl Icahn’s bid for control of the company. And at Acer, founder Stan Shih made a surprise return as interim chairman and president, following the resignation of former chief executive JT Wang and president Jim Wong after the company recorded a record third-quarter loss. The resignations came after Acer announced its consolidated revenues for the third-quarter of 2013 fell 11.8% year-on-year to $US3.11 billion, resulting in an operating loss of $US86.6 million. 4. Surface falls flat On top of falling PC sales and 3.6% Windows Phone market share, the news was dire for Microsoft on another front in 2013. Late last year, Microsoft launched its Surface series of tablets as a first step towards making devices, with the company believed to have manufactured around six million units. The release of the Surface instantly made Microsoft a direct competitor to many of its already struggling PC partners, straining relations in the process. Fast forward to July of this year when Microsoft announced a massive $US900 million writedown on its inventory of unsold tablets. The writedown came less than a week after Microsoft announced a large price cut of $US150 for the struggling product line. Adding insult to injury, Microsoft also revealed it has spent $US898 million advertising the tablets, while only generating $US853 million in sales. According to many leading analysts, the company was believed to have sold just 1.7 million of the six million tablets it had built. To put those numbers in perspective, Apple sells around 14.6 million iPads each quarter, while Samsung sells around 8.8 million. 5. Steve Ballmer resigns During the 1990s, Microsoft was undeniably the 800-pound gorilla of the tech industry. Then, in January 2000, founder Bill Gates stood aside as chief executive, in favour of Steve Ballmer, in order to focus on his philanthropic efforts. Since then, the company has lost much of its former dynamism, and has failed to become the dominant player in a range of new technologies that have emerged since then, including search, tablets, smartphones or social media. In August last year, Vanity Fair magazine journalist Kurt Eichenwald ran a feature exploring why Microsoft fell behind its rivals. A management technique called stack ranking was almost universally blamed. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” a former software developer told Eichenwald. “It leads to employees focusing on competing with each other rather than competing with other companies.” Add the low market share for Windows Phone, poor sales of the Surface and the PC industry bloodbath, and it became clear something had to give at Microsoft. In July, the company announced a major management restructure, with the company’s strategy shifting to focus on “devices and services”. Then, just one month later, Ballmer resigned as chief executive, with stack ranking dumped as a management technique soon after. The Redmond, Washington-based tech giant is currently searching for his replacement. Story continues on page 2. Please click below. 6. Nokia sold for a song Soon after Ballmer’s resignation, the news was overshadowed by an even bigger story. In September, Microsoft announced it was buying Nokia’s smartphone and devices businesses for $US7.2 billion, with the Finnish telecommunications company retaining its Nokia-Siemens services network equipment business and the Nokia brand name. The deal came after Nokia announced its smartphone sales had slumped 27% year-on-year during the second quarter of 2013, with an overall loss of €115 million ($A190 million) for the quarter. The sales plunge was led by the company’s Windows Phone-based Lumia smartphone unit, where shipments fell 27% from 10.2 million units during the second quarter of 2012 to just 7.4 million for the same quarter in 2013. To put that number into perspective, it was a little over one-tenth the number of smartphones sold by Samsung during the same quarter. It was an inglorious end to a company that absolutely dominated the mobile industry through the 1990s and 2000s. As recently as 2010, when Apple sold 47 million smartphones, Nokia managed to sell 104 million. According to prominent industry analysts, such as former Nokia executive Tomi Ahonen, the fateful moment came in February 2011, when then chief executive Stephen Elop made the decision to switch its smartphones to the Windows Phone operating system. Soon after, a leaked internal letter from Elop known as the “burning platform” memo likened the company’s situation in the mobile phone market to a person standing on a burning oil platform. After the takeover was announced, Elop was named as one of the top contenders for the position of Microsoft chief executive. 7. BlackBerry’s failed comeback and takeover attempt It wasn’t just Nokia that had a tough time in the smartphone market at the hands of Samsung and Google. In January, BlackBerry launched its new, all-touch BlackBerry 10 smartphone operating system. The platform, originally scheduled for late 2011, had been delayed by a year, preventing the company launching a flagship phone in 2012. The Australian launch for the first smartphone to run the new platform, the Z10, came in March at a gala event in Sydney hosted by Adam Spencer. A second device using a traditional BlackBerry keyboard, called the Q10, came soon after. While the reviews were generally positive, the new devices failed to be the big comeback success the company’s then-chief executive, Thorsten Heins, had hoped for. By August, the company formed a special five-member panel to examine takeover options after director and Canadian investment guru Prem Watsa quit the board. In its September quarter results, the full carnage was laid bare. The Canadian smartphone maker reported just $US1.6 billion in revenues for the quarter, down 45% year-on-year and 49% quarter-on-quarter. The company also revealed it sold just 3.7 million smartphones for the quarter – and less than half of those ran BlackBerry 10. Total losses came in at $US965 million, including a massive $US934 million inventory writedown against unsold stock of the company’s Z10 smartphone. The company announced more than 4500 staff layoffs, representing nearly 40% of its global workforce, while Heins bought a new private jet. Meanwhile, the company’s rollout of its Messenger app for Android and iOS was frozen due to technical issues with its release. In early November, with banks uncertain of the company’s long-term future, Watsa failed to raise the requisite $4.7 billion for a buyout, instead lending the company $US1 billion. As part of the deal, Heins stood aside as chief executive, replaced by former Sybase chief executive John Chen, with Watsa rejoining the board. Heins received a $US22 million golden parachute for his efforts, significantly less than the $US55.6 million he would have received had the sale gone through. 8. The Twitter IPO Last year, Facebook’s disastrous IPO ended in tears – followed by lawsuits. Thankfully, the outcome was not repeated when its social media rival, Twitter, listed on the New York Stock Exchange in November. After opening at $US26 per share, the company’s share price surged 72.69% in its first trading session. It closed at $US44.90 per share, before dropping slightly to $US44.44 in after-hours trading. Making the result even more amazing was the state of its balance sheet. While the tech giant has revenues of $US534.46 million and around 230 million users worldwide, it has never posted a profit. Despite this, the company now has a market capitalisation north of $US20 billion, with chief executive Dick Costolo claiming the company’s long-term investment strategy has prevented it from chasing profits in the short term. 9. iOS7, iPhones and iPads For Apple, 2013 was a solid if somewhat unspectacular year. In June, the company released a redesigned version of its smartphone and mobile operating system, iOS7, alongside a new version of its Mac OS X desktop operating system, known as Mavericks. It was the year that Apple finally unveiled a low-cost version of its iPhone, known as the iPhone 5c, alongside a new 64-bit flagship smartphone called the iPhone 5s, complete with a 64-bit processor and a fingerprint sensor. Then, in October, the company unveiled a lighter version of its iPad, known as the iPad Air. None of the products had the industry-shaking impact of the unveiling of the Macintosh, iPod, iPhone or iPad. That said, with billions in profits each quarter, a solid second place in the smartphone market and the world’s biggest selling tablet, solid and unspectacular for Apple is better than most companies could dream of. 10. Xbox One and PlayStation 4 launch Last, but certainly not least for gamers, 2013 marked the introduction of next generation games consoles from both Sony and Microsoft. Coming a year after Nintendo launched its Wii U system, Sony announced one million first-day sales of its PlayStation 4 system, but the launch was marred by a number of angry consumers taking to social media to complain about non-functional systems. Sony’s first-day sales were soon matched by the first-day sales of Microsoft’s new Xbox One system. So how will the two new devices perform over the long term? We’ll have to wait until next year to find out! This story first appeared on SmartCompany.
Once upon a time, figuring out which personal computer platform to develop your program or website for was easy. In these tech good ‘ole days known as the mid-90s, DOS and – later – Windows accounted for well over 90% of both the home and office computer markets. Old Taskmaster remembers the days when the overwhelming majority of computer users knew the frustration of an error message that said “illegal operation”. Bill Gates racked up a number of anti-trust lawsuits trying to keep it that way. Any company standing in the way of this tech juggernaut – from Borland and Word Perfect to Netscape and very nearly Apple – were driven out of town like the evildoer in a spaghetti western. Back then, the rules were simple: Develop it for Windows. If it particularly appealed to graphic designers in black skivvies and berets, consider porting it to the Mac. If you were a blind open source ideologue, you might also port it to Linux and boast about it on Slashdot (after all, 1999 was the year of Linux on the desktop – or was that 2009?). But nowadays, things are a little more confusing. There are smartphones, tablets, PCs, laptops and other web devices to consider. Even if you just have a website, you still have to consider which devices and browsers to optimise for. (And before you say “it should work perfectly on everything”, you probably won’t test your site on Contiki for the Commodore 64, or the Telecom Computerphone, now will you?!) If you’re developing for Australian consumers, which of the big three – Android, iOS or Windows – should you focus on? Old Taskmaster has some food for thought: Smartphones If you want to develop a smartphone app it has to work on Android. Period. According to Kantar WorldPanel, Android now accounts for 69.4% of all Australian smartphones and 69.6% of the world market. In comparison, iPhones make up 28.1% of the market in Australia and 18.4% worldwide. In other words, if you have a mobile app that doesn’t run on Android or a mobile site that doesn’t quite look right on a Samsung Galaxy S4, you’ve just lost three-quarters of the market. Tablets The Australian tablet market grew 147% year on year, with Aussies now buying 1.14 million of the things each quarter. But as sales of tablets have gone up, Apple’s marketshare has gone down. One year ago, the iPad made up 80% of the Aussie market, while today it’s just 56%. Meanwhile in the same time Android has grown from 18% to 36%. Meanwhile, despite all the hype from Microsoft, they only claim 8% of the market. Desktops While desktop computer sales fell a massive 21% year-on-year during the first quarter of 2013, they still remain an important platform. Here, Windows still runs the show. HP controls 19% of the market, followed by Dell (15%), Lenovo (11%), and Toshiba (9%), with no-name computer shops down the road making up the other 28%. In contrast, Apple has 18%. Still confused? By the numbers, Old Taskmaster says it’s really simple. Find out which sort of device your customers prefer to use the most, and prioritise your apps and websites accordingly. If you want your app or website on smartphones, it has to be built for Android. If you want it primarily on tablets, it’s Apple first and Android second. If you want desktop computers, it’s still Windows, with Apple a distant second. So knowing the figures, are you developing for the right platforms? If not, it’s time to get your priorities right! Get it done – today!
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