Supply chain
White-box beating first-tier, who would have thought?
Joseph Tsai, DIGITIMES, Taipei

It may be an unthinkable scenario in the past, but the fact that China-based white-box ARM chipmakers are gradually winning their way into the first-tier market, has started to change the ecosystem we used to know of the IT market.

Price seems to have become the only guaranteed factor to attract consumer demand in the IT market as brand vendors such as Amazon and Google have all been trying to launch mobile devices that are the cheapest of them all.

For brand vendors with strong content libraries, selling hardware cheap would not greatly impact their income, but for pure brand vendors such as Asustek Computer and Acer, it would mean a serious profit drop. As a result, seeking cheaper components has become the only way pure brand vendors can break through their predicament.

Hewlett-Packard (HP) recently launched its Slate 7 tablet using a processor from China-based white-box chipmaker Rockchip, while Asustek, Acer and Lenovo also plan to follow along and release tablet models using white-box ARM processors to compete in the entry-level market.

With prices only half those of first-tier chipmakers and having computing performances only slightly off the first-tier chips, white-box ARM processors' advantages will only expand in the future, pushing more brand vendors to turn to purchase processors from white-box players, while prompting first-tier chipmakers to develop cheaper chips to compete.

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