Rise of the Tablet PC and the need for Extremely Modular Tablets

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Overview of the growth of the Tablet Market, ruggedized and commercial tablets and exploring the need for extremely modular and upgradable tablets. Takeaways: Reduced Technology Obsolescence, Lower …

Overview of the growth of the Tablet Market, ruggedized and commercial tablets and exploring the need for extremely modular and upgradable tablets. Takeaways: Reduced Technology Obsolescence, Lower Cost, Faster To Market, Customized to End Users Needs, Maximizes Application Software Features. Table of Contents: Introduction 3
Death of the PC 4
Rise of the Tablet Market 5
Consumer Market 9
Ruggedized Market 10
Rugged & Commercial 11
Time to Market 14
Modular: The Tablet Evolved 17
Example Modules & Options 19
Prospective Markets 20
Airline Use Case: Odem™ Core 21
Flight Crew 22
Flight Attendants 23
In-Flight Entertainment 24
Ticket Counter Check-In 25
Gate Agents 26
Private Club 27
Maintenance 28
Ground Support 29
Summary & Conclusions 30
References 32
About the Authors 33
About Pepperwood Partners 35

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  • http://online.wsj.com/article/SB10000872396390444657804578048981461803220.htmlhttp://www.nextbigwhat.com/pc-sales-decline-tablets-soar-globally-297/http://www.networkworld.com/news/2013/030513-why-moore39s-law-not-mobility-267394.html?source=nww_rss
  • 4 - http://www.businessinsider.com/the-death-of-the-pc-tablet-sales-will-beat-notebook-sales-this-year-2013-15 - http://www.pcmag.com/article2/0,2817,2391553,00.asp6 - http://www.statista.com/statistics/183419/forecast-of-global-sales-of-pcs-by-category/
  • 7 - http://www.idc.com/getdoc.jsp?containerId=prUS23660312#.UQg4L-hNfo0
  • 8 - http://www.statista.com/statistics/200248/forecast-of-tablet-pc-sales-in-the-united-states-from-2010-to-2015/
  • 9 - (VDD Research) http://blog.vdcresearch.com/mobile_and_wireless/2012/09/growth-in-rugged-tablet-market-trying-to-make-up-for-the-loss-in-others.html10 - http://finance.yahoo.com/news/motorola-solutions-completes-psion-acquisition-104317916--finance.html11 - http://finance.yahoo.com/news/honeywell-acquire-intermec-600m-123622179.html
  • 12 – Source: VDC Research Group, 2011

Transcript

  • 1. STRATEGIC WHITE PAPER Rise of the Tablet PC and the need for TAKEAWAYS Extremely Modular • Reduced Technology Tablets Obsolescence • Lower Cost Executive Overview • Faster To Market by Stephen Carpenter • Customized to End and Patrick Seaman Users Needs March 2013 • Maximizes Application Software FeaturesPepperwood Partners© All Rights Reserved February 2013 Page 1
  • 2. Topics in this White Paper  Introduction 3  Airline Use Case: Odem™ Core 21  Death of the PC 4  Flight Crew 22  Flight Attendants 23  Rise of the Tablet Market 5  In-Flight Entertainment 24  Ticket Counter Check-In 25  Consumer Market 9  Gate Agents 26  Ruggedized Market 10  Private Club 27  Maintenance 28  Rugged & Commercial 11  Ground Support 29  Time to Market 14  Summary & Conclusions 30  Modular: The Tablet Evolved 17  References 32  Example Modules & Options 19  About the Authors 33  Prospective Markets 20  About Pepperwood Partners 35Pepperwood Partners© All Rights Reserved March 2013 Page 2
  • 3. Introduction This white paper discusses the fast growing Tablet PC market and presents the case for a relatively unexplored new market segment – that for an odem Core extremely modular Tablet PC design that can be quickly augmented / upgraded / updated with specialized features such as sensors, special electronics, additional processors, GPUs, memory, communications devices, etc. Included are both general industry background and analysis, as well as speculative and forward looking statements regarding market prospects for the odem™ Extremely Modular Tablet PC from Entegra Technologies.Pepperwood Partners© All Rights Reserved March 2013 Page 3
  • 4. Death of the PC The much heralded “Death of the PC” has been proclaimed by many analysts. IDC and Gartner report that PC shipments fell in Q3 2012 more than 8% from a year earlier,1 and 4.9% in Q4.2 On the other hand, the industry moved 350 million units in 2012.3 Many blame tablets, mobile and other factors. Other factors include the success of the PC platform itself – that even 5-7 year-old PC’s are often “good enough” for casual consumers who mostly browse the internet, do social Gordon Moore, Intel co-founder postulated that the number of media like Facebook or Pinterest and watch transistors on integrated circuits default-resolution YouTube videos. doubles about every two years. This is often generalized as “computing power” doubles roughly every 18-24 Old processors are still OK for everyday use months.Pepperwood Partners© All Rights Reserved March 2013 Page 4
  • 5. Rise of the Tablet Market While growth rate of traditional PC sales have flatlined, Tablet sales are rising fast. The rapid growth of the consumer- grade tablet market is led by Apple, with a bevy of competitors running versions of Microsoft Windows, Google Chrome, Linux, Android and other Operating systems.Pepperwood Partners© All Rights Reserved March 2013 Page 5
  • 6. Rise of the Tablet Market Comparing tablet sales to Notebooks, Business Insider projects4 a 64% growth for tablets -vs- a 5% decline for notebooks. NOTE: Growth in tablets has also impacted sales of printers and print media. Morgan Stanley reports that 42% of tablet owners plan to cancel subscriptions to print newspapers.5 Figure 1: Global Tablet, Notebook & PC sales Forecast (IDC, Morgan Stanley) 6Pepperwood Partners© All Rights Reserved March 2013 Page 6
  • 7. Rise of the Tablet Market Figure 2: Market share: Notebooks -vs- Tablets (NPD Displaysearch) 7Pepperwood Partners© All Rights Reserved March 2013 Page 7
  • 8. Rise of the Tablet Market Forrester Research projects nearly 40 million tablet sales in the US in 2013, growing to 44 million by 2015. Figure 3: Tablet Sales Forecast: 2010-2015 (Forrester Research) 8Pepperwood Partners© All Rights Reserved March 2013 Page 8
  • 9. Consumer Market  Price range: $400 - $900+  New models every 6 - 9 months  Designed for consumers with some crossover into commercial & military applications  Security risk using consumer grade communications protocols  Fragile – requires protective armored cases  Manufactured with specific features -- unable to repurpose to support business or technology changes  Mostly non-upgradable  iOS, Android, Windows, Linux  Weight 1.4 – 1.6 lbsPepperwood Partners© All Rights Reserved March 2013 Page 9
  • 10. Ruggedized Market  Price range: $2000 - $4000+  New models every 12-18 months after release of underlying technology  Ruggedized – MIL STD 810G; IP65 & IP67  High development costs to configure to specific features  Expensive to modify  Android & Windows Operating Systems  Mostly non-upgradable core  Weight 3.0 – 8.0 lbsPepperwood Partners© All Rights Reserved March 2013 Page 10
  • 11. Rugged & Commercial The “Rugged” or “Ruggedized” market segment grew by 30.1% over the year-ago-quarter, experiencing double-digit growth across all regions.9 Meanwhile, in 2012 there was significant consolidation in the more general category of “rugged mobile” with Motorola Solution’s acquisition of PSION10 and Honeywell’s acquisition of Intermec.11Pepperwood Partners© All Rights Reserved March 2013 Page 11
  • 12. Rugged & Commercial The ruggedized market is under pressure from the dramatic growth in consumer tablets and their increasing commoditization. The availability of cheap consumer tablets encourages experimentation on the part of commercial / industrial users. While on the one hand this may diminish demand for traditional rugged products, it also has the effect of validating the market for portable hand held computing devices.Pepperwood Partners© All Rights Reserved March 2013 Page 12
  • 13. Rugged & Commercial The fragility of consumer The growing devices in a sophistication of users commercial, industrial or pushes demand for more military environments technologically up to ultimately results in greater date, flexible and demand for more rugged customizable designs. devices. DRS Technologies Xplore Technologiesd Getac MultitouchPepperwood Partners© All Rights Reserved March 2013 Page 13
  • 14. Time to Market To build a Commercial-Grade and/or Ruggedized tablet, you generally Start with “today’s” technology or technology standards, and engineer it to become the desired product. Sounds great, Testing Manufacturing Off the shelfis too fragile, Go to the drawing Engineer the design Prototype but….doesn’t meet board, design needs. new product Pepperwood Partners© All Rights Reserved March 2013 Page 14
  • 15. Time to Market …but, this process takes 12-18 months. In today’s technology cycle, that means the product that started-out being based on current technology is a generation or two obsolete by the time the “New” ruggedized or commercial version is available. The 6-9 Months: 6-9 Months: PRODUCT IS Engineering Design Verification 12-18 Validation & Test & Test MONTHS OBSOLETEPepperwood Partners© All Rights Reserved March 2013 Page 15
  • 16. Time to Market The need for sturdy and even rugged tablets for commercial, industrial and military purposes is clear. Fragile consumer-grade equipment may be technologically advanced, but broken is broken. 12-18 MONTHS = TOO LONG. There is a growing need Starting with “today’s technology” to produce “New” Rugged / Custom Tablet for a solution a custom/rugged Tablet: Is based on 12-18 month-old tech: with custom 6-9 Months: 6-9 Months: PRODUCT Engineering Design 12-18 options & Validation & Verification & MONTHS capabilities, is Test Test OBSOLETE sturdy enough, upgradable, and isn’t obsoletePepperwood Partners© All Rights Reserved March 2013 Page 16
  • 17. Modular: The tablet evolved New Market: Modular (Market size - Source: VDC Research Group)Pepperwood Partners© All Rights Reserved March 2013 Page 17
  • 18. Modular: The tablet evolved A new approach is needed – a tablet suitable for commercial or military and/or rugged use that is:  Price range: $900 - $1,200+ (excluding modules)  Shared Platform – leverage technology across multiple use cases  Longer useful life – avoid early obsolescence  Designed for both commercial & military users – Ruggedized IP66  User upgradable / accessible odem™ Extremely Modular Tablet PC  Secure communications protocols Entegra Technologies  Android & Windows  Weight: 2.5 – 3.0 lbs.Pepperwood Partners© All Rights Reserved March 2013 Page 18
  • 19. Example Modules & Options Modular tablets would typically Specialized modules & options include standard options such as: desired include:  Bar code / mag card readers  Custom / Military  RFID / NFC  Secure Communications  GPS / Location  Interchangeable  Environmental Sensors  Front and back cameras  Testing equipment  Extended-life battery packs  Custom  Bluetooth, WiFi, Cellular (LTE,  Integration with Enterprise Data GSM, CDMA)  Multiple operating system options  Multiple CPU optionsPepperwood Partners© All Rights Reserved March 2013 Page 19
  • 20. Prospective MarketsThe extremely modulartablet is aimed atmarkets whereconsumer-grade orsimply ruggedequipment isunsuitable, and a moreupgradable, updatable Airlines Restaurantsand expandablesolution is needed.The slides that followdescribe a use casefor Airlines. Healthcare CPG RetailPepperwood Partners© All Rights Reserved March 2013 Page 20
  • 21. Airline Use Case: odem™ Core Maintenance Flight Crew Check-In Ground Support Gate Agents odem odem Core Configured for each application In-Flight Private Club Flight Attendants EntertainmentPepperwood Partners© All Rights Reserved March 2013 Page 21
  • 22. FLIGHT CREWAirline Use Case: odem™ CoreFLIGHT CREW Flight CrewTablet w/ Smart Dock & Desktop DockFunctions:• Reduce paper to one backup set per plane• Pilot pre-flight check-in & planning• Flight Plan, Flight Manual, Operating Manual• Jeppesen and Luthansa Lido flight data Extra odem™ Features• Controlled migration from Class 1 to Class 2 without equipment change • Wi-Fi, Cellular, GPS, Cyber• Flight Deck Smart Dock Station Encryption • Additional processing & memory for own • NFC, Bar Code, Camera, CAC ship real-time navigation (fast refresh) Reader • Virus Protection / Firewall • Certified Interface Protection Device • Cockpit Smart Dock & Flight Ops • Access to Gate Wi-Fi, ACARS, Iridium, 3G Docking Station • Synchs tablet to multiple aircraft type • M2M – Aircraft to Flight Ops – updates tablet upon docking with aircraftPepperwood Partners© All Rights Reserved March 2013 Page 22
  • 23. FLIGHT ATTENDANTSAirline Use Case: odem™ Core Flight AttendantsFLIGHT ATTENDANTSTablet w/ Desktop DockFunctions:• Paperless Cabin – convert magazines & catalogs to e-versions Extra odem™ Features• Flight Crew / Passenger Interactions – • Wi-Fi, Cellular for personalize the on-board experience with Supervisors duty free, ordering meals, identifying VIP & top tier passengers • GPS • Bar Code • Magnetic Card Swipe • CameraPepperwood Partners© All Rights Reserved March 2013 Page 23
  • 24. IN-FLIGHT ENT.Airline Use Case: odem™ CoreIN-FLIGHT ENTERTAINMENT In-Flight EntertainmentTablet & Panel MountFunctions:• In-flight movies, web browsing, and other customer interactions• Place duty free orders, messages to/from flight Extra odem™ Features attendants• Panel Mount – fixed in back of seat and can be • Wi-Fi removable • Bar Code• Stand Alone – hand out tablets to premier • Camera customers • StylusPepperwood Partners© All Rights Reserved March 2013 Page 24
  • 25. CHECK-INAirline Use Case: odem™ Core Check-InTICKET COUNTER CHECK-INTablet w/ Desktop Dock & Kiosk Panel MountFunctions:• Re-Invent Check-In Process (eliminate queues and counters with roving agents) Extra odem™ Features • Wi-Fi, GPS• Enhanced CRM (identify VIPs and top tier flyers • Cellular for Supervisors and their preferences) • 2D Bar Code• Roving Agents (assist with bag track and trace) • Magnetic Card Swipe• Passenger Re-accommodation • NFC • Camera • Desktop Dock at Counter • Panel Mount – RJ45Pepperwood Partners© All Rights Reserved March 2013 Page 25
  • 26. GATE AGENTSAirline Use Case: odem™ Core Gate AgentsGATE AGENTSTablet w/ Desktop DockFunctions:• Re-Invent Boarding Process (eliminate queues with roving agents) Extra odem™ Features • Wi-Fi, GPS• Enhanced CRM (identify VIPs and top tier flyers and their preferences) • Cellular for Supervisors • 2D Bar Code• Roving Agents (assist with bag track and trace) • Magnetic Card Swipe• Passenger Re-accommodation • NFC • Camera • Desktop Dock at Counter • Panel Mount – RJ45Pepperwood Partners© All Rights Reserved March 2013 Page 26
  • 27. PRIVATE CLUBAirline Use Case: odem™ Core Private ClubPRIVATE CLUBTablet w/ Desktop DockFunctions: • Watch movies, TV • Internet Access Extra odem™ Features • Order food and drinks • Wi-Fi • Flight updates • Stylus • Tablet and/or Desktop Dock • Magnetic Card Swipe, NFC • Desktop Dock w/ keyboard & mousePepperwood Partners© All Rights Reserved March 2013 Page 27
  • 28. MAINTENANCEAirline Use Case: odem™ Core MaintenanceMAINTENANCETablet w/ Mobile & Desktop DockFunctions:• Eliminate current paper logs and reports• Real time reporting of aircraft maintenance with ops and pilot Extra odem™ Features• Techs have complete maintenance manuals • Wi-Fi & Cellular Radios and “how to” videos • Bar Code, RFID, & NFC• Use RFID and GPS to track assets, location of tech, and status of repair • GPS• Applies to line maintenance all the way up • Camera (front & back) to heavy checks • Mobile Vehicle Mount • Docking Station w/ keyboard & mousePepperwood Partners© All Rights Reserved March 2013 Page 28
  • 29. GROUND SUPPORTAirline Use Case: odem™ Core Ground SupportGROUND SUPPORTTablet w/ Mobile DockFunctions:• Ground crews have instant access on where and how to deploy around aircraft Extra odem™ Features• Real time updates on baggage / cargo loading – improves interaction with load • Wi-Fi & Cellular Radios planning team • Bar Code, RFID, & NFC• Use RFID and GPS to track assets (tugs), • GPS ground crew, and other support equipment • Camera (front & back) • Mobile Vehicle MountPepperwood Partners© All Rights Reserved March 2013 Page 29
  • 30. Summary & Conclusions  Extreme modularity is the new disruptive innovation that will allow commercial and military users to transcend technology advancements without having to replace the entire computing device – Adaptable, Flexible, Upgradable  Cost effective and rapid incremental end user specific technology upgrades will now be possible with the modular open hardware designs coming to market  In the not too distant future, upgrading the processor in your tablet computer will be as simple as replacing a postage stamp size component on the main logic boardPepperwood Partners© All Rights Reserved March 2013 Page 30
  • 31. Summary & Conclusions In the end, companies need a tablet that fits in the undefined “white space” between consumer and ruggedized tablets that focuses on lower price, smaller size, less weight, increased modularity, and longer useful life. Steve Carpenter, CEO Entegra TechnologiesPepperwood Partners© All Rights Reserved March 2013 Page 31
  • 32. References1. http://online.wsj.com/article/SB10000872396390444657804578048981461803220.html2. http://www.nextbigwhat.com/pc-sales-decline-tablets-soar-globally-297/3. http://www.networkworld.com/news/2013/030513-why-moore39s-law-not-mobility- 267394.html?source=nww_rss4. 4 - http://www.businessinsider.com/the-death-of-the-pc-tablet-sales-will-beat-notebook-sales-this- year-2013-15. 5 - http://www.pcmag.com/article2/0,2817,2391553,00.asp6. 6 - http://www.statista.com/statistics/183419/forecast-of-global-sales-of-pcs-by-category/7. 7 - http://www.idc.com/getdoc.jsp?containerId=prUS23660312#.UQg4L-hNfo08. 8 - http://www.statista.com/statistics/200248/forecast-of-tablet-pc-sales-in-the-united-states-from- 2010-to-2015/9. http://blog.vdcresearch.com/mobile_and_wireless/2012/09/growth-in-rugged-tablet-market-trying-to- make-up-for-the-loss-in-others.html10. http://finance.yahoo.com/news/motorola-solutions-completes-psion-acquisition-104317916-- finance.html11. http://finance.yahoo.com/news/honeywell-acquire-intermec-600m-123622179.htmlPepperwood Partners© All Rights Reserved March 2013 Page 32
  • 33. About the Authors Steve Carpenter is President and CEO of entegra technologies, with 36 years experience building global organizations in information technology services, healthcare technology services, customer relationship management, financial services, and retail media with companies including Affiliated Computer Services, ActionSystems, and MediaCart. Contact Steve at steve@entegratec.com, and www.linkedin.com/in/stephencarpenter.Pepperwood Partners© All Rights Reserved March 2013 Page 33
  • 34. About the Authors Patrick Seaman is Chief Technology Advisor to Pepperwood Partners and COO of the social publishing platform company WhichBox Media. Seaman is the former COO of the video eCommerce company Cinsay, and former Director of Technology at Broadcast.com. Patrick serves on the Advisory Board of Kraftwurx Inc, and Qples, Inc. and on the UT Dallas School of Natural Sciences & Mathematics Advisory Council, and is an IEEE member. Contact Patrick at patrick@pepperwoodpartners.com, patrick@patrickseaman.com and www.linkedin.com/in/patrickseaman/.Pepperwood Partners© All Rights Reserved March 2013 Page 34
  • 35. About Pepperwood Partners Pepperwood Partners is a boutique investment banking advisory firm headquartered in Dallas, Texas. Pepperwood provides a suite of investment banking advisory services to businesses in the Two Lincoln Centre technology, media, telecom, nanotec 5420 LBJ Freeway, Suite 535 hnology, energy and alternative Dallas, Texas 75240 USA +1 214.442.6056 asset sectors. With a strong focus info@pepperwoodpartners.com on institutional relationships in the Russian, European, and CIS Learn more at: regions, Pepperwood works with www.PepperwoodPartners.com businesses to achieve capitalization and growth objectives.Pepperwood Partners© All Rights Reserved March 2013 Page 35