A report by information and analytics provider IHS suggests global demand for tablet panels has been boosted by orders from unbranded, white-box Chinese manufacturers.
This has resulted in IHS increasing its forecast for tablet displays by 6% for 2013.
According to the report, a total of 262 million displays for tablets are forecast to be shipped in 2013, compared to the previous forecast of 246 million made in May.
Unbranded tablet makers purchased 40% of all tablet panels in April, up from just 17% in the first quarter of 2012.
Worldwide, tablet shipments reached an all-time high of 40.6 million units in the first quarter of 2013. According to research by Strategy Analytics, tablet shipments in the first quarter of 2012 were measured at 18.7 million.
The International Data Corporation (IDC) predicts global tablet shipments will grow by 58.7% year-on-year in 2013, to reach 229.3 million units. It also expects tablet shipments to surpass the shipment of portable PCs this year, as the PC market continues on a downward spiral.
A total of 2.25 million tablets were sold in the Middle East and Africa (MEA) in the first quarter of 2013. An IDC report reveals the MEA tablet market saw growth of 184% year-on-year during this period.
Locally foreign
World Wide Worx MD Arthur Goldstuck says he doesn't expect a massive uptake of the Chinese white-box tablets in SA just yet. "We are seeing a trend where some of the Eastern manufacturers are bringing down the price of their entry-level tablets. Acer, for example, has come out with a R1 700 tablet and Asus with a R3 000 tablet, which is substantially lower than Samsung and Apple. They understand that they have to compete on price."
He says at this stage, local sales for the Chinese tablets are purpose-driven. "Wise is the best example of this. It is targeting the educational market where it's providing tablets for use in schools, and with that, it has also integrated an educational textbook portal into the tablet. They are still Android tablets but they are very much localised."
They have a specific target audience and offer a particular benefit set, says Goldstuck. "You can buy a Wise tablet and the full set of textbooks for an academic year and it will cost you less than buying the physical textbooks.
"PC training and business colleges is another area where the uptake of white-box tablets has been high. They are issuing Onyx tablets to all their students, which add up to a couple of tens of thousands of devices," he notes.
Quality control
IHS says white-box manufacturers are able to produce tablets at lower cost, more quickly and with greater flexibility in production. These companies also have the capability to manufacture unbranded tablets, and make products for the major brands on a contract manufacturing basis.
Senior manager for large-area displays at IHS, Ricky Park, says competitive dynamics in the tablet market have changed dramatically this year as Chinese white-box smartphone makers have entered the tablet market in droves.
"These companies are producing massive quantities of low-end tablets that appeal to consumers in China and other developing economies. Because of this, the white-box manufacturers are driving up demand for tablet panels, particularly smaller displays using the older twisted nematic technology, rather than the newer screens using in-plane switching," Park adds.
Goldstuck says while white-box manufacturers didn't have the strongest start in the tablet market, they are catching up. "When the seven-inch tablet market first exploded, the imported Chinese brands were very poor quality. They were barely functional, specifications were low and the quality was also poor."
He says since then manufacturers have been upping their game substantially. "With every new launch, they are coming closer to matching the specifications that are coming from the big players in the market."
Goldstuck says there will always be restrictions to what they can achieve. "Obviously, the big Chinese factories are geared to replicate anything that's being produced in the market. So you might not have the level of integration that you would get from Samsung or Apple, but they are certainly competing on specifications."
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