Gartner Predicts 2013: Moving Consumers Into the Next Phase of Computing

As technology innovation seems to be slowing down, hardware manufacturers are faced with fighting commoditization through strong brands and delivering new user experiences. Consumers might not be looking for major technology advancements but are drawn to devices that deliver a rich user experience and strong aspirational brands.

2013 will set out to be a very interesting year for consumer devices. The shift from hardware to software and services continues, and Tier 1 vendors are faced with strong competition coming from many devices "made in China" on the one end and the complexity of fitting their offering into a wider ecosystem of devices on the other.
Connectivity will allow consumers to have more devices that will become increasingly smart. But smartness will be freed only by intuitive UIs and interoperability across devices being empowered by accessories and everyday appliances that will soon be connected.

 As consumers try to make sense of the new complex world presented in front of them, where familiar devices such as the PC are replaced by new form factors, brands provide reassurance and continuity. However, as consumers become more familiar with the new connected world, the same brands risk being seen as stale unless the vendors focus on driving change. Hardware vendors, service providers and ecosystem owners will need to work together to empower consumers to take advantage of the connected home, knowing that failing to deliver a rich experience could mean not just a lost revenue opportunity, but also the danger of becoming irrelevant.

Predicts: By 2015, if Windows 8 fails, Microsoft will abandon its Windows brand across all devices.

Analysis by: Roberta Cozza, Annette Jump

The Microsoft brand has excellent brand awareness worldwide and is one of the most-well-known IT brands. According to the BrandZ brand ranking, the Microsoft brand is the fifth most valuable global brand for 2011. However, the company's ranking has been slipping during the past few years, and the Apple brand overtook the Microsoft brand in 2010. The recognition for its brand comes from the PC space, where Microsoft is a dominant player in client OS and office productivity software.

Both consumer and professional users have been using Microsoft Windows OS on their PCs for more than 20 years and are well-familiar with its user interface and its brand. Currently, Microsoft has market share of nearly 95% in terms of PCs, but the Windows brand has no traction in other consumer devices; Microsoft's share is only 3% in smartphones and virtually none in tablets today.

Microsoft needs to succeed in executing its vision around Windows 8 to finally strengthen the brand value across devices and bring excitement into its brand among consumers — there is no Plan B. A failure with Windows 8 would significantly damage Windows and Microsoft brands in the minds of consumers; this would mean that the Windows brand will continue to be linked mainly to Microsoft's corporate and productivity propositions, and will have failed to generate any value or emotional connection with consumers.

Recommendations:
• Device vendors and application providers should avoid putting all resources on one OS and support both Android and Windows, at least until the end of 2013, when there will be clear feedback about a Windows 8 uptake across tablets and smartphones.

• For Windows 8 to succeed in becoming the third consumer ecosystem, device vendors and Microsoft must expand interaction with consumers beyond devices, through Windows application store, new services and personal cloud.

• Windows Phone OEMs will have to push their own brands and sell their own branded experience around their devices, as the Windows Phone brand has no resonance with smartphone users.

Predicts: By 2015, most new mobile phones will incorporate carrier-controlled machine-to-machine networks.

Analysis by: Martin Reynolds

Key Findings:
• The Internet of Things cannot happen without low-power connectivity and location information.
• Mobile phones are ideally suited to provide a backbone network for the Internet of Things.
• CSPs could extract significant revenue from operating such a backbone.

The Internet of Things promises many new marvels as it creates new insights that make our lives better, our businesses more successful and our economies grow faster. We'll be able to get information from almost anything by adding a small radio to any object — packages, shopping carts, clothing, and even computers and mobile phones — providing information even when the battery is flat.

But there are two barriers to this data utopia — connection and location. These smart devices — nodes — must run without external power, which severely limits their power consumption. Long-range wireless is impractical for these devices. Furthermore, as these devices proliferate, their location becomes the single most important piece of data in both their reporting and management processes. However, GPS is both power-hungry and ineffective in indoor locations. Therefore, these devices must connect to networks that support extremely low-power operation and offer positioning information.

One option is to leverage the mobile phone installed base. Mobile phones are in constant communication with a global network, and they have increasingly accurate position information from a mix of GPS, cellular signals, Wi-Fi signals and inertial navigation. Further processing in the network using stored terrain information can increase the accuracy of location information, and other information from the handset could also enhance information captured from a nearby node.

Should mobile phones become successful as the backbone for the Internet of Things, we can expect a number of changes in the technology, mostly driven by software.

• Mobile phone modems will incorporate security and networking technology to enable CSPs to provide the backbone for the Internet of Things. These technologies will also enable other PAN-type applications, such as healthcare and fitness monitoring.
• CSPs will offer location and communication services to enterprises looking to deploy value-added services based on the Internet of Things.
• New business opportunities for the Internet of Things devices will emerge quickly as backbone mobile devices are deployed.
• Privacy issues will come to the forefront through both use and abuse of mobile device backbone technology.

Recommendations:
• Mobile device manufacturers must create and implement the Internet of Things backbone standards as soon as possible.

• Mobile device manufacturers must develop and communicate business opportunities for the Internet of Things.

A Look Back

Taking a look back at some key predictions from previous years. We have intentionally selected predictions from opposite ends of the scale — one where we were wholly or largely on target, as well as one we missed.

On Target: 2012 Prediction — In 2015, the biggest distinction between connected TVs, tablets and all-in-one (AIO) desktops will be screen size. This prediction remains on track and remains at the core of the device market evolution. We see the line between devices blurring more and more. The emergence of apps, widgets and Web connectivity on the connected TV platform is making the TV experience more interactive. The AIO desktop computing platform has started to adopt many of the elements of the tablet, as touch-friendly OSs roll out. And tablets — in particular, the iPad — now have a full range of productivity applications, from office suites to CRM. They also have many accessory options, including keyboards and mice, for users who find a touch-only interface too awkward for content creation.

Missed: 2012 Prediction — By 2013, Google will rationalize its different OSs around the Android platform.

Considering the new refresh cycle of Chromebooks in the second half of 2012 and Google continuing to push these devices in the education market, we see no short-term change in the strategy. We believe that this is closely related to the modest success that tablets running Android have had in 2012, and we expect that the situation will change as these volumes grow, giving Google a reason to revisit its strategy by 2014.