VDC Research’s recently published Q2 2015 Rugged Mobile Market Analysis provides further evidence that the rugged mobile market is anything but predictable. Performance varied considerably by both mobile form factors and regional market with continued turbulence expected through the end of 2015.

Strong Boost to Rugged Handheld Market in Q2 2015

• The global rugged handheld market appears to be overcoming many of the obstacles – especially around OS migration and application modernization – that had led to fluctuating demand over the past 18 months. One clear recent trend has been the continued share consolidation among the top two vendors as Zebra and Honeywell significantly outperformed the rest of the market. Competition from consumer smartphones continues to present challenges. However, vendors have rationalized their market positions to focus on sectors and applications where they can offer significant value add.
• At the regional level there is a significant contrast in performance. In the Americas – and particularly the US – the investment environment for rugged handheld solutions continues to gain momentum, with North America closing out its fourth consecutive quarter of sequential YoY growth. Europe by contrast paints a bleaker picture, as sluggish economic figures and a still-weak euro against the US Dollar have erased gains and placed increasing pressure on vendors to adjust prices as the currency fluctuates at near-historic lows. Demand in Asia has again picked up, moving into the second consecutive quarter of double-digit growth with many international vendors making inroads against local-vendors.
• 2015 is continuing the transition that finally took hold in 2014, particularly in regard to mobile OS. With Zebra’s deployment of one of the largest Android roll-outs to date in the Americas with Home Depot and an impending rollout for the UK’s Royal Mail in 2015, the market seems well-primed for further deployments among tier-1 companies this year. However, the greatest question market in 2015 will be the impact of Windows 10 beginning in 2016 and whether the OS will manage to garner a critical level of demand to upset Android’s upward trend. Moreover, rugged Android demand has been concentrated in several large deals with little run rate traction, especially in the warehouse/DC sector.

Rugged Notebook Market Stalls as Market Leader’s Revenues Drop Considerably

• The rugged notebook market closed out the first half of 2015 with a whimper, sliding further from 2014’s gains and towards some of the form factor’s lowest levels of revenues. Overall revenues dropped by 20% in the first half in comparison to the first half of 2014.
• While Dell and Getac, fueled by several new product announcements and investments in their market development and sales teams, posted the strongest gains while market leader Panasonic’s position took a hit with a substantial decline to their rugged notebook shipments.
• Performance in the second half of 2015 is expected to improve somewhat with strengthening demand in the public sector and the anticipated Q3 federal buying season. However, the final tally for 2015 will likely show a YoY revenue contraction of around 10%.

 Although Q2 Rugged Tablet Performance Slowed, Market Remains on Track for Record 2015

• Unlike the recently sluggish consumer tablet market, performance in the rugged tablet market remains strong with overall revenue shipments increasing by 25% in the first half of 2015. However, on a quarterly basis, Q2 shipments slowed, particularly in the Americas region.
• Market leader Panasonic has maintained its momentum largely on the back of strengthening sales in EMEA and APAC, lifting global revenues by 21% over Q2 2014.  The FZ series and the G1 remain squarely at the top of the pack, accounting for nearly 60% of all unit shipments for tablets.
• Following the headlines in April with the announcement of the acquisition of rival Motion, Xplore recorded blistering high levels of growth that topped 175% over Q2 2014. Already, the company appears to be leveraging Motion’s partner network on the global market with considerable success that will propel growth well into the second half of 2015.
• Competition in the enterprise tablet market is expected to intensify with several new entrants announcing product launches over the past quarter. Dell introduced its long awaited rugged tablet while Zebra Technologies added a Android and Windows powered tablet. In addition, Apple’s introduction of the iPad Pro and Microsoft’s anticipated release of the Surface Pro 4 in October is driving a lot of attention towards enterprise opportunities for tablets. 

View the 2017 Enterprise Mobility & Connected Devices Research Outline to learn more.