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According to research recently completed by VDC Research Group (VDC), the market for UMPCs (Ultra-Mobile PCs) is expected to exceed $300 million in 2008 and grow by almost 35% annually to reach $1 billion by 2012.
Although the market is expected to grow at a robust rate over the next five years, it is unlikely to meet many of the initial (over hyped) market expectations as the utility and price points of many first and second generation devices have limited more widespread adoption.
According to VDCs research, initial adoption of UMPCs has been strongest among enterprise users supporting vertical applications as opposed to consumers. More specifically, demand to support applications in beyond the fence environments among enterprise, government and education users where device portability is a key requirement is emerging as a sweet spot for UMPCs. Today these applications are supported by handheld devices running Windows Mobile. However, the full OS, x86 architecture and enhanced security vis--vis Windows Mobile and Windows CE could be key factors tipping several of these opportunities in favor of UMPCs.
According to Mobile and Wireless Practice Director David Krebs, Even though UMPCs are not expected to achieve mass-market appeal, VDC expects UMPCs to be adopted in a variety of more specialised environments, including education and select vertical markets. It is in these environments that the true value of the enhanced portability of the UMPC form factor combined with the processing performance of an x86 platform and full OS will resonate most.
Nevertheless, this market is not without its challenges. One of the most significant is the confusion surrounding the classification of UMPCs and emergence of competing segments such as MIDs (Mobile Internet Devices) and Netbooks. While MIDs and Netbooks are mostly positioned as value-based mobile computers, the primary emphasis of UMPCs needs to be on mobility and performance, critical purchase drivers among target enterprise, government and education users. The key factors driving the opportunity for UMPCs in enterprise, government and education segments evidenced by VDCs comprehensive research include:
Enterprise application portability. UMPCs are likely to challenge ARM-based Windows Mobile devices in several beyond the fence enterprise mobility applications thanks to their common computing architecture with back-end enterprise applications. Although no one is looking to deploy full desktop applications on UMPCs, the ability to port or extend a back-end enterprise application onto a x86/Windows XP/Vista-powered device versus an ARM-based Windows Mobile device is driving this decision;
Wireless security: One of the critical benefits of UMPCs is the enhanced wireless security it offers over handheld devices running Windows CE or other handheld operating systems. This proves especially critical in markets such as public safety, oil & gas and federal agencies; and
Display size to support enhanced graphics content. Although a 7 display has its limitations in terms of functionality, it is an improvement over 3-4 displays commonly used by handheld/PDA mobile computers. In addition to mapping and LBS content, several innovative 3D modeling applications in markets such as oil & gas are driving opportunities for UMPCs.
ABOUT VDC RESEARCH GROUP
VDC Research Group (VDC) is a technology market research and strategy consulting firm that advises clients in a number of industrial, embedded, component, retail automation, RFID, AIDC, datacom/telecom, and defense markets. Using rigorous primary research and analysis techniques, the firm helps its clients identify, plan for, and capitalize on current and emerging market opportunities. We strive to deliver exceptional value to our clients by leveraging the considerable technical, operational, educational and professional experience of our research and consulting staff. During our nearly four decades of ongoing operation, we have had the pleasure of serving most of the worlds leading technology companies, many high-profile start-ups, and numerous blue-chip early and later stage investors. Our products and services consist of research reports, annual research programs, and custom research and consulting services. Founded in 1971, the firm is located in the Boston area.