Mon, Jul 15, 2013 - Page 13 News List

Tablet shipments forecast to grow 69%

RED-HOT, WHITE-BOX:Analysts say the competitive dynamics have changed after Chinese white-box makers have flooded the market, but this may eventually backfire

AFP and Staff writer with CNA, TAIPEI and WASHINGTON

Global shipments of tablet computers for this year are expected to rise 69 percent from a year earlier, largely on strong demand from China, a research report said on Saturday.

In the report, market information advisory firm Displaybank said about 260 million tablets will be shipped this year, sharply up from the 155 million units recorded last year as low-cost models gain popularity in the huge Chinese market.

Displaybank has raised its forecast for this year’s tablet shipments from the estimate of 246 million units it made in May.

The advisory firm’s forecast is higher than that of International Data Corp, which forecast in late May that tablet shipments for this year are expected to grow 58.7 percent from a year earlier to hit 229.3 million units, adding that tablet shipments are expected to surpass notebook shipments for the first time this year.

“Competitive dynamics in the tablet market have changed dramatically this year as Chinese white-box smartphone makers have entered the tablet market in droves,” Displaybank analyst Ricky Park said.

Displaybank said Chinese OEM tablet makers have taken advantage of their relatively low production costs to grasp a larger share of the market.

The advisory firm said the market has expected US chip giant Intel Corp to unveil a new processor for low-end tablet models, which could further boost demand for tablets.

A recent survey by Gartner Inc suggests tablet sales globally will rise 67.9 percent to 202 million units this year, but analysts say the market is cooling after a couple of years of sizzling growth.

Gartner said the red-hot growth in tablets and smartphones will taper off as these devices gain longer life cycles, adding that many consumers are opting for “basic” tablets to cut costs.

“It looks like the market may be tiring of tablets and as makers get desperate, you may see more pressure on prices,” Enderle Group analyst Rob Enderle said last week.

Amazon has slashed prices of its Kindle HD tablets to as low as US$169 in the US, while Barnes & Noble has cut the price of its Nook to as low as US$129, and has announced plans to outsource production of its tablets.

Some retailers are selling tablets for less than US$100, but Enderle said the flood of poor-quality devices may eventually backfire and turn off consumers.

IDC analyst Jitesh Ubrani said many of the low-cost tablets come from small, sometimes unbranded “whitebox” vendors.

“The decline of the PC market makes it increasingly important for PC vendors to compete in the tablet space,” Ubrani said

“As more top-tier brands introduce low-cost products, we expect to see a reduction in the number of whitebox vendors,” he said.

Even so, the analyst said, average prices for tablets are likely to drop further, and tablet shipments are expected to overtake all PC shipments in 2015.

Microsoft has also aimed at the high end of the market with its Surface, which debuted with a US$500 price tag, but it has cut the price to as low as US$199 for education buyers.

ABI Research analyst Jeff Orr said that some manufacturers may be forced out of the market if tablets are not part of their “core” business.

“Every brand believes it has an audience which will be interested in their device to connect to their ecosystem,” he said. “The reality is not every player can survive.”

As tablet prices continue to plunge amid a flood of new devices, Enderle said that even though it seems to be a good time to buy a tablet, he advises people to wait.

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