10 Tough Trends Partners Are Grappling With In The Rugged Market

Tough Love For Rugged Market

Rugged products, which are designed to be immune to dust, liquids and other difficult environmental conditions, have typically been embraced by niche markets like manufacturing and health care.

But partners who sell these rugged products point to emerging trends beyond those niche areas, such as the looming challenge of more rugged consumer products, and the increased popularity of thinner, lighter and cheaper rugged devices.

Following are 10 trends partners say they are noticing in the rugged market.

10. Customer Interest In Semi-Rugged Products

More customers are becoming interested in what partners dub "semi-rugged" products. The emergence of semi-rugged products stems from customers wanting thinner, lighter and more aesthetically pleasing rugged smartphones and tablets.

"There was a lot of fanfare about consumer-type devices in the past few years, but that's run its course, as clients want devices that are more rugged or the semi-rugged -- the hybrid space in between," said Mike Cleary, president of Chanhassen, Minn.-based Coridian Technologies, which resells ultra-rugged mobile computer products by vendors like Xplore Technologies.

9. The Threat Of Market Consumerization

One main concern partners have about the rugged market is consumerization, as major consumer vendors like Apple and Samsung start to make their own devices more durable.

However, partners stress that major rugged players in the market and their resellers can offer unique features to customers that will serve as a backlash to this consumerization.

"There's definitely a trend of consumerization today, and it's going to continue to cause erosions, but true rugged manufacturers have more serviceability and features that make tablets intrinsically safe," said Martin Smekal, president and CEO of Torrance, Calif.-based rugged tablet OEM TabletKiosk.

8. Dropping Rugged Prices

Competition in the rugged market continues to intensify as prices for devices slowly drop to sub-$2,000.

"As we see consumer devices get cheaper and more rugged, price points are continuing to go down," said Mark Alyn, outside sales manager at Allen, Texas-based ScanTexas, which resells rugged computing devices.

The Panasonic 14-inch semi-rugged Toughbook 54, for example, goes for a street price of $1,499, according to Panasonic.

7. Continued Value Of Vertical Markets

The vertical market client base for the rugged market is crucial, said partners.

Specific verticals, such as manufacturing, oil and gas, and the health-care industry rely on durable products for protection against harsh conditions in the workplace.

This vertical demand will keep key rugged players in business, say partners.

"We're seeing a much more stable demand for rugged devices, especially in the vertical marketplaces, while the consumer area is a little more fickle," said TabletKiosk's Smekal. "These markets can't compromise their operations on a consumer device that isn't durable."

6. Bigger Screens On Rugged Devices

Similar to the consumer demand for larger-screened phones and "phablets," players in the rugged market say they are seeing more interest in bigger screens on rugged devices.

For example, on tablets, TabletKiosk's Smekal said, he sees bigger screens arriving as products with screens that are 10 inches or larger enter the rugged market.

Xplore Technologies, for instance, offers an 11.2-inch Xc6 ultra-rugged tablet, while Panasonic offers the 14-inch semi-rugged ToughBook 54.

5. Popularity of Rugged Tablets

Market research firm VDC recently released results of its quarterly device tracker, showing that rugged tablet sales grew 17.5 percent in 2014, with especially strong growth in the fourth quarter.

According to VDC, the market's growth stemmed from strong investments by key players in embedded manufacturing applications. The company also noted that vendors may face a challenge in 2015 after the closure of the Hydis display factory, which provided daylight-viewable displays for rugged tablets.

4. Vertical Interest In Rugged Smartphone Market

According to VDC, rugged smartphone shipments in 2014 grew 9.8 percent from 2013, as specialized solutions with Band 14 support andpush-to-talkfunctionality begin to show traction.

VDC highlighted increased demand for rugged handhelds in mobile vertical segments, such as the construction, manufacturing and public safety markets.

3. Android's Rising Presence In Rugged Market

While rugged devices typically ran on Windows operating systems, partners observe that there has recently been more devices running Android.

Part of this transition, partners say, could be because of the unpopularity of Windows 8 among enterprise customers.

"One big difference we see between clients who want Windows and those who want Android OS devices is that customers who want Android aren't looking for specifically 'rugged' products," said TabletKiosk's Smekal. "They come looking for Android products that are more durable, while customers who want Windows use the term 'rugged' 99 percent of the time."

2. New Players And Consolidation

Finally, partners are seeing a trend of consolidation in the rugged product market, as companies begin to make acquisitions to expand their rugged portfolio. For example, in April, Xplore Technologies acquired rugged mobile hardware company Motion Computing.

"We're seeing growth and companies merging, even in the tablet space," said Coridian's Mike Cleary.

1. 'Positive' Outlook For Rugged Mobile Solutions In 2015

Despite the threat of consumer vendors in the rugged market, VDC stated that it saw the market going in a positive direction in 2015, as new opportunities with solutions and applications open doors for both vendors and VARs.

"The market has clearly changed," VDC stated in a release, "and what will be especially critical for vendors and solution providers ... amid the growing noise surrounding enterprise mobility is maintaining focus on the markets and applications where the value proposition of rugged technology can be clearly articulated and supported."