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Digitimes Research: Windows 10 unlikely to bring dramatic changes to mobile device market in 2015

Joanne Chien, Luke Lin and Jim Hsiao, DIGITIMES Research, Taipei 0

Microsoft on January 21, 2015 announced Windows 10, but Digitimes Research believes the operating system, though falling in line with the software giant's Mobile First, Cloud First strategy, is unlikely to make any dramatic change to the competition between notebooks, tablets and smartphones in 2015.

Shipments of smartphones using Microsoft's platforms are estimated to reach 45-55 million units in 2015 and tablets 18 million units. Microsoft is expected to continue dominating the notebook market, but will not be able to stop Chromebooks' aggressive penetration.

The Windows 10 for Phone platform's biggest advantage is its Universal apps feature, which allows users to use the same applications and share files across their smartphones, tablets and PCs. Initially, the feature will only support applications such as Photo, Video, Music, Map, Contacts, Message, E-mail, Calendar as well as Microsoft's Office and a small amount of third-party applications, but such a feature will provide great benefits to enterprise users.

However, for most consumers, the Universal apps feature is still not as attractive as other rich and quickly-updated third-party apps that are available on competitors' app stores. With the disadvantage, the Windows 10 for Phone platform is still unlikely to be able to catch up with Android and iOS in the near future.

Digitimes Research expects shipments of smartphones using Microsoft's platforms to reach 45-55 million units in 2015, but whether the volume can hit the top end of the estimation will depend on how aggressive the firm subsidizes its China white-box and brand vendor partners.

As for tablets, Digitimes Research believes Windows 10 will be a growth driver, and has raised its shipment forecast of Windows-based tablets for 2015 from 16.3 million units to 18 million units.

Digitimes Research believes Windows 10 will greatly improve 2-in-1 devices' usage experience with its Universal apps and Continuum mode features.

Windows 8.x's biggest complaint has been the coexistence of the traditional desktop interface and the new Metro App interface, which is interfering with each other during usage for most users.

The Universal apps feature will unify applications' designs, allowing applications to share the same usage experience in either the traditional desktop interface or touchscreen mode. Meanwhile, the Continuum model will automatically switch Windows 10's interface to the most appropriate one for users depending on their usage mode. The two features are expected to greatly enhance the usage experience of 2-in-1 devices, which will be switched between notebook and tablet modes quite frequently.

Adding Cortana support to tablet devices and allowing Xbox One games to be streamed on Windows 10-based tablets will also make Windows-based tablets more appealing to consumers.

As for the notebook industry, because of Microsoft ending support for Windows XP - which triggered some replacement demand - and strong demand for sub-US$350 consumer models, global notebook shipments only declined 1.3% in 2014, a lot better than expected.

However, despite Microsoft's release of Windows 10 and its strategy of continuing to push low-licensing-fee solutions, Digitimes Research expects Windows 10's effect on notebook demand to be far weaker than the replacement trend seen after Windows XP support termination in 2014, as the notebook market is already mature. Therefore, Digitimes Research expects global notebook shipments to decline 3% on year in 2015.

Google's strategies to lower its Chromebook prices and expand new product lines are expected to help the device's shipments to grow 30% on year to reach nine million units in 2015.