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Rugged Mobile Outlook

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The rugged mobile market followed up a strong 2010 with another strong performance in 2011. Demand was especially strong for rugged handheld and tablet form factors. For handhelds the key themes in 2011 was strong demand from the transportation/logistics sector as well as the EMEA regional market. Conversely, demand in North America slowed in the second half of the year, due, in part, to weakening retail opportunities. Our handheld market outlook for the nearterm is for vendor revenues to grow in the mid to high single digits. The rugged tablet market showed resilience in the face of continued attention directed towards consumer media pads and more specifically Apple’s iPad. Demand for tablets was concentrated around traditional inspection, delivery, healthcare and military markets. Several vendors launched or are in the process of releasing rugged Android powered tablets. While demand is beginning to percolate for these devices, we are seeing pent up opportunities for Microsoft’s pending Windows 8 platform. The rugged notebook market has performed less predictably over the course of 2011 as government budgets – both national/federal and state/local – contract. As a result shipments to the commercial sector as a percent of overall shipments increased substantially during the second half of 2011. During this QuickCast, VDC's David Krebs give an overview of the rugged mobile market, focusing on some of the key trends we believe will be driving change moving forward.

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Rugged Mobile Outlook

  1. 1. Mobile & Wireless Practice David Krebs – Vice President Eric Klein – Senior Analyst Balca Korkut – Analyst Britt Libby – Research Associate QuickCast Rugged Mobile Outlook March 2012 © 2012 VDC Research QuickCast Mobile & Wirelessvdcresearch.com
  2. 2. Recording Available A full audio recording is available for download at: http://vdcresearch.com/market_research/mobile_wireless/freeresearch.aspx © 2012 VDC Research QuickCast Mobile & Wirelessvdcresearch.com
  3. 3. About Us Market Intelligence for Technology Vendors & Investors  Direct-Contact Primary Market Research  Deeply Segmented Data  Expert Insights  Validated Results Custom Consulting Services for Your Most Critical Business Decisions  Research-Based Consulting  Transparent Tools & Methodology o Highly Customized Survey Guides & Output Templates o Sophisticated Market Estimate & Forecast Models o Detailed, Flexible Stakeholder Maps & Profiles o Industry Development Scenarios o Market Opportunity Fit Screening, Rating & Ranking © 2012 VDC Research QuickCast Mobile & Wirelessvdcresearch.com
  4. 4. Our Core Coverage Areas AutoID & Transaction Automation Embedded Hardware & Systems Mobile & Wireless Industrial Automation & Control Embedded Software & Tools Emerging Technologies © 2012 VDC Research QuickCast Mobile & Wirelessvdcresearch.com
  5. 5. Ways to Work With UsOur market research is the basis for the many other ways that VDC can help you to grow your business. Our clients rely on us toprovide actionable insights that support their most important strategic initiatives including: corporate development projects,opportunity assessments and lead generation programs. © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com
  6. 6. Today’s Speaker David Krebs Vice President, Mobile & Wireless David has more than ten years experience covering the markets for enterprise and government mobility solutions, wireless data communication technologies and automatic data-capture research and consulting. David focuses on identifying the key drivers and enablers in the adoption of mobile and wireless solutions among mobile workers in the extended enterprise. David’s consulting and strategic advisory experience is far reaching and includes technology and market opportunity assessments, technology penetration and adoption enablers, partner profiling and development, new product development and M&A due diligence support. David has extensive primary market research management and execution experience to support market sizing and forecasting, total cost of ownership (TCO), comparative product performance evaluation, competitive benchmarking and end user requirements analysis. David is a graduate of Boston University (BSBA).For complimentary insights and marketing data: http://blog.vdcresearch.com/mobile_and_wireless/ © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com
  7. 7. Today’s Agenda Rugged Mobile Computing – 2011 Performance & 2012 Outlook Regional Performance & Industry Opportunities Consumer Technology Impact © 2012 VDC Research QuickCast Mobile & Wirelessvdcresearch.com vdcresearch.com
  8. 8. Global Rugged Mobile Market Strong 2011 performance for rugged handheld solutions with slightly upward trending rugged notebooks and tablets Rugged Handheld Shipments Strong revenue growth in rugged handheld devices 1000 $800 908.3 851.4 799.5 850.7 in 2011 – higher than originally projected by VDC 727.2  $707.4 800 Global: 14.5% Unit Shipments (/000) 681.8 719.0 $678.6 $668.5 $600 $627.5  Hardware Shipments 604.8 Americas: 8.3% $579.1 $570.5 (USD Millions) 600 $519.3  EMEA: 23.8% $487.3 $400 400  APAC: 10.3% $200 200 Rugged notebook market showed pockets of improvement in 2011 – moderate to robust outlook 0 $0 for 2012 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11  Global: 4.0% Rugged Notebook & Tablet Shipments  Americas: -2.4% 210 198.8 188.1 $500  EMEA: 13.8% 169.3 180 149.6 139.5 153.7 159.1  APAC: 37.8% $465.3 155.5 $427.1Unit Shipments (‘000) $375 Hardware Shipments $427.2 150 (USD Millions) Strong rugged tablet market continued in 2011 – $407.5 $400.0 $397.8 $351.4 $380.1 120 some media pad uplift. Rugged Android a theme $250 90 for 2012 60  Global: 11.4% $125 30  Americas: 5.9% 0 $0  EMEA: 12.6% Q1 10Q2 10Q3 10Q4 10Q1 11Q2 11Q3 11Q4 11  APAC: 38.2% © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com
  9. 9. Impact of Tablets & Smartphones on Rugged Mobile MarketCustomer facing applications are most vulnerableTarget Segment Key Value Propositions Size Characteristics Rugged Vulnerability  Customer service  Inventory management  2011 Rugged mobile: $300M  Retail investments around customerRetail Shop Floor  Mobile POS/ Queue busting  Total units: 350K engagement  Product evaluation  Annual growth: 9.8%  35% of near term opportunity at risk  B2B and B2C platform integration  Customer service  2011 Rugged mobile: $50M  Consumer tablet (iPad) preferred deviceHospitality: Customer  Ticketing  Total units: 65K for many solutionsEngagement  Check in/out  Annual growth: 12.0%  100% of near term opportunity at risk  Product and service presentation  Majority of solutions asset facing and not customer facing  Customer service  2011 Rugged mobile: $900M  Inclement environments common  Maintenance/ repairField Service  Total units: 650K  Solid state memory and use of protective  Dispatching  Annual growth: 10.0% sheaths (Otterbox) driving consideration  Customer and asset management of non-rugged devices  35% of near term opportunity at risk  Traditional DSD processes are order taking and deliver which continue to be primarily  Order taking and sales  2011 Rugged mobile: $240M supported by rugged (handheld) solutionsDirect Store Delivery  Delivery  Total units: 250K  Emerging merchandising applications  Merchandising  Annual growth: 9% (planograms; promotion management, etc.) supported primarily by non-rugged solutions  20% of near term opportunity at risk © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com
  10. 10. Tablet Investment Status & DriversBroad interest in tablets among enterprise and government organizations with 55% currently using orevaluating / planning to deploy tablets Tablet Investment Situation (N=1374) CURRENTLY USING TABLETSCURRENTLY USING TABLETS AND PLANNING TO EVALUATE AND/OR DEPLOY AN UPGRADE CURRENTLY EVALUATING TABLETS PLANNING TO EVALUATE AND/OR DEPLOY A NEW TABLET SOLUTION EVALUATED TABLETS BUT DID NOT DEPLOY NO CURRENT PLANS TO EVALUATE OR DEPLOY A TABLET SOLUTIONS IN NEXT 12 MONTHS DONT KNOW 0% 5% 10% 15% 20% 25% 30% 35% Few organizations that evaluate tablets decide not to deploy. Balanced mix between current users and evaluators with almost 30% of organizations with no current tablet initiatives. © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com
  11. 11. Q4 2011 Global Rugged Mobile MarketStrong performance in EMEA during Q4 2011 over Q4 2010 across all form factors Large Form Factor Shipments Rugged Handheld Shipments USD Millions USD Millions $54.8 $125.8 Asia- $46.5 Asia-Pacific $130.3 Pacific $125.4 $293.3 EMEA $111.9 EMEA $263.1 $299.2 $288.3 Americas $304.1 Americas $285.1 Q4 11 $0 $100 $200 $300 $400 Q4 10 $0 $100 $200 $300 Even facing regional macro-economic pressures, demand for rugged solutions in EMEA remained very strong in Q4 2011. Growth was strong across most sectors with transportation / logistics and distribution, utilities and manufacturing leading. In North America, we are witnessing a modest recovery in the government sector (large form factor) while handheld performance was closely tied to the transportation / logistics sector as retail demand softened. © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com
  12. 12. 2012 Research AgendaEnterprise Mobility Hardware Solutions Market  Track 1: Fast Forward: Insights for Leaders  Track 2: Enterprise & Government Mobility Hardware  Track 3: Enterprise Mobility Professional Services  Track 4: Enterprise Mobility Software  Track 5: Enterprise Mobility Industry & Application Markets  Track 6: Enterprise Mobility Vertical Markets  Track 7: Enterprise Mobility Total Cost of Ownership (TCO) & Return on Investment Models © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com
  13. 13. Thank You for Attending this VDC WebcastFor more information please contact: Gerrell Smith – Account Director gsmith@vdcresearch.com | 508.653.9000 x113 David Krebs – Vice President davidk@vdcresearch.com Eric Klein – Senior Analyst eklein@vdcresearch.com Balca Korkut – Analyst bkorkut@vdcresearch.comFor complimentary insights and marketing data: http://blog.vdcresearch.com/mobile_and_wireless/ © 2012 VDC Research QuickCast Mobile & Wireless vdcresearch.com

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