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The Threat of Substitution – Tablet Style

May 29, 2013

Among Porter’s 5 Competitive Forces, the Threat of Substitution can be the more difficult threat to identify. There have been blogs criticizing Porter’s 5 Forces as anachronisms of the manufacturing past. Further those critics posit the 5 Forces are irrelevant today in the new economy. Here is a recent example of why Porter’s 5 Forces should remain on each executive’s desks. 

A little more than three years have passed since the first iPad went on sale in April 2010.

Back then, not even the keenest optimists could have predicted the impact of what was then mocked as an oversized iPod Touch. 

Tablets have changed the way we interact with media, the way we shop and, in many cases, replaced the PC as our primary computing device.

As tablets and smartphones have become powerful enough to handle virtually any computing task thrown at them, the workplace is probably the last stronghold of the traditional PC.

PC shipments have recently declined significantly and according to IDC’s latest forecast the industry will stagnate for years to come. In 2015, tablets are expected to outship PCs for the first time as the chart nicely illustrates.

 2013_05_28_Tablets_PC

http://www.statista.com/topics/841/tablets/chart/1138/tablet-and-pc-shipment-forecast/

 

Within the tablet market, there is an ongoing shift towards lower cost, smaller tablets, such as Apple’s iPad mini or Google’s $200 tablet Nexus 7.

In 2013, 8-inch and smaller tablets are expected to account for the majority of global shipments for the first time, as consumers apparently prefer portability and price over larger screens and processing power.

2013_05_28_Tablets 

http://www.statista.com/topics/841/tablets/chart/1136/breakdown-of-tablet-shipments-by-screen-size/

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From → business, Strategy

2 Comments
  1. Good post. Another interesting strategy author is Geoffrey Moore who writes about technology startups. His series is worth checking out, you would like it.

    • Thanks! I will be looking up his work.

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