Fri, Oct 07, 2011 page12

• Local firms face difficult tablet market

  STIFF COMPETITION: With the competitive prices of their products, Chinese tablet firms could gain market share, with several less well known Chinese brands making waves

  • By Jason Tan / Staff Reporter
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  With Apple Inc to launch its iPad 3 next year and Amazon’s new Kindle Fire tablet setting a new pricing benchmark with its US$199 tag, Taiwanese manufacturers are unlikely to make much of an impact in the tablet market next year, but Chinese producers could gain market share with their price advantage, a market researcher said yesterday.

  “Manufacturers from Taiwan could launch a few tablet models next year, but they won’t make any ripples in the industry unless they intend to sacrifice profit margins by cutting prices to gain share,” said Annie Shih (施雅茹), a senior industry analyst from Market Intelligence & Consulting Institute (MIC, 產業情報研究所) under the Institute for Information Industry (資策會).

  Apple, which dominates the tablet market, is set to launch iPad 3 next year and it could cut the price of iPad 2 to promote both models. In addition, the Kindle Fire, which sells for just US$199 — less than half of that of the cheapest iPad — is likely to -appeal to consumers, she said.

  “Time to market is important for notebook launches, but it isn’t the case for tablets. Taiwanese firms may want to take a break next year to enhance the competency of their software applications and make a comeback in 2013,” Shih told an MIC seminar.

  Another factor is that Microsoft Corp’s Windows 8 operating system will also debut in the second half of next year and that could hinder manufacturer’s efforts to roll out Windows 8-based tablets, she said.

  In contrast, China could gain market share given its highly competitive pricing.

  “If Chinese manufacturers continue to price their tablets at around US$99, they could prove to be an irresistible price for Chinese consumers,” Shih said.

  Lesser-known Chinese brands are making waves in the Chinese market with their slew of cheap offerings.

  Companies like Onda Technologies Inc (昂達電子), Alldo Cube Technology and Science Co (酷比魔方數碼科技) and Newsmy Ideal Digital Technology Co (紐曼數碼科技) are currently selling models priced at between 1,000 yuan (US$157) and 2,000 yuan.

  Although their content stores remain relatively undeveloped, Chinese consumers tend to prefer the ability to watch videos, surf the Web and text over chatting apps on tablets, Shih said.

  With Apple set to dominate the tablet market over the next two years, a handful of companies could decide to drop out of the sector next year, she added.

  The worse-than-expected sales of some tablet brands have already taken a toll on Taiwanese manufacturers.

  Inventec Corp (英業達) yesterday confirmed in a filing to the Taiwan Stock Exchange that the company is “restructuring” manpower given the upcoming closure of its tablet contract production project. The company said it could not yet confirm the scale of the downsize, but stressed that tablet production accounted for only a small part of its total sales.

  Chinese-language media said Inventec’s move came in response to client Hewlett Packard Co’s recent announcement that it planned to forgo its own tablet platform, WebOS, clearing its tablet inventory at US$100 apiece.

  Contract PC maker Quanta Computer Inc (廣達) last month introduced a voluntary redundancy scheme for its 2,000 employees in Taoyuan because of the termination of the project for Research In Motion Ltd’s tablet, the PlayBook.
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