Taipei, Friday, November 21, 2014 12:43 (GMT+8)
partly cloudy
Taipei
28°C
China white-box makers add extra value to tablets as cost reduction is no longer possible
Anthony Chen, DIGITIMES Research, Taipei [Thursday 16 January 2014]

China white-box players have not been able to lower their Wi-Fi-based tablets' prices since the third quarter of 2013 because there is no room for further reductions in their BOM costs.

The average BOM cost for a white-box tablet - most of which adopted a dual-core processors - stood at about US$25 as of the fourth quarter of 2013. Dual-core processor pricing could not drop any furrther, as their average prices came to about US$4, only less than US$1 higher than that of a single-core one.

Memory and 7-inch TN LCD panels are the two key components that account for major shares of white-box tablet BOM costs. However, most panel suppliers have been only willing to upgrade specifications instead of dropping their quotes, and therefore, white-box players have been left with upgrading their devices with better panels without an option of reducing the panel cost.

While cost reduction is no longer a feasible way to attract consumers, many white-box players have turned to push tablets with phone functions to increase their devices' functionalities and value. The devices also provide higher gross margins for vendors.

Digitimes Research estimates that currently, 80% of white-box tablets are available in countries other than China, because white-box tablets with phone functions have seen rising demand in Russia and other markets in Eastern Europe and Southeast Asia since the second half of 2013.

China white-box players' partnerships with regional brand vendors in emerging markets have also helped raise local consumers' demand for tablets with phone functions.

In the first half of 2013, most white-box tablets with phone functions adopted China-based Allwinner Technology's solution which combined an entry-level single-core processor with a discrete baseband module. However, many white-box device makers have turned to MediaTek solutions for their tablets since thesecond half of 2013 after the Taiwan-based chipmaker also integrated a baseband chip into its tablet processor solution.

MediaTek's solution is more expensive, but its support for product development and hardware design has given it an upper hand over competitions. Meanwhile, independent design houses (IDHs), which provide white-box players with product design services, also started to design tablets using MediaTek's smartphone processors in the second half of 2013, which prompted white-box players to adopt MediaTek's solutions.

Digitimes Research estimates that tablets with phone functions will account for 40% of 7-inch white-box tablet shipments in 2014, up from 20% in 2013.

Topics: Page 2

Realtime news
  • Commentary: Xiaomi facing challenge to sustain growth

    Mobile + telecom | 2min ago

  • Japan-based Murata sees potential in IoT and wearable industries

    IT + CE | 23min ago

  • Acer unveils Aspire Switch and Iconia tablets

    IT + CE | 41min ago

  • China market: Online advertising value over CNY43 billion in 3Q14, says Analysys

    IT + CE | 1h 33min ago

  • China has 1.277 billion mobile phone users in October, says MIIT

    Mobile + telecom | 1h 42min ago

  • Taiwan market: CHT to expand multimedia on demand services

    Mobile + telecom | 2h ago

  • Taiwan attracts foreign direct investment of nearly US$4 billion in January-October, says MOEA

    Bits + chips | 2h ago

  • China and US boost worldwide industrial semiconductor market in 2014, says IHS

    Bits + chips | 2h 5min ago

  • Falling LED bulb prices put pressure on LED driver IC firms

    Bits + chips | 2h 9min ago

  • Asia Neo Tech expects sales growth in 4Q14

    Bits + chips | 2h 11min ago

  • USI raises funds

    Bits + chips | 2h 12min ago

  • China IC design houses expand presence in touch IC and fingerprint sensor markets

    Bits + chips | 2h 16min ago

  • Corning announces glass advancements with Gorilla Glass 4

    Displays | Nov 20, 21:57

  • Touch panel pricing to drop to US$1 per inch

    Displays | Nov 20, 21:30

  • Digitimes Research: Taiwan LCD driver IC revenues to rise 6% in 2014

    Bits + chips | Nov 20, 21:23

  • China Mobile expected to reach 70 million TD-LTE users at end of 2014

    Mobile + telecom | Nov 20, 21:20

  • Foxconn, Innolux invest in new 6G LTPS facilities

    Displays | Nov 20, 21:19

  • Win Win Precision cooperates with vendor to market HeatCap in Japan

    Green energy | Nov 20, 20:06

  • Taiwan October export order value hits record, says MOEA

    Bits + chips | Nov 20, 19:09

  • Acer to launch convertible touch-screen Chromebook in 1H15

    IT + CE | Nov 20, 19:07

  • Corning announces glass advancements with Gorilla Glass 4

    Before Going to Press | Nov 20, 21:34

  • YoungTek 4Q14 sales to fall up to 10%

    Before Going to Press | Nov 20, 21:16

  • Taiwan IC designers see demand slowing down

    Before Going to Press | Nov 20, 20:57

  • eMemory intros Hybrid MTP

    Before Going to Press | Nov 20, 20:57

  • Allsor Electronic to begin iSafe marketing

    Before Going to Press | Nov 20, 18:49

Pause
 | 
View more

Wireless broadband developments in Southeast Asia markets

RESEARCH EXTRAS | Nov 12, 10:53

As of 2013, the 10 ASEAN nations had a total of over 700 million mobile subscriptions, with the CAGR from 2003-2013 reaching 24%, and the share of the global user base rising from 4.9% to a high of 10.6%. This Digitimes Research Special Report analyzes the various...

Trends and forecasts for the China FPD industry, 2014-2017

CHINA FPD | Oct 6, 12:29

With China being the world's IT production center and a country with some of the strongest consumer demand, along with benefits on custom tax, funding, loans, and subsidies provided by the government, China's FPD industry continues to show strong growth. Local...

Taiwan handsets – 3Q 2014

TAIWAN ICT | Nov 20, 10:53

Taiwan's top handset ODM Foxconn Electronics lost a significant amount of feature phone orders from Microsoft Mobile in the third quarter, while the biggest brand vendor HTC also saw a sharp decline in its shipments. But for others in Taiwan's handset sector,...

China smartphone market and industry – 3Q 2014

CHINA SMARTPHONE | Nov 14, 19:21

Looking at smartphone sales in the local China market, under the influence of stagnating sales of international brands, a lack of differentiating features in high-end and high-cost/performance ratio products marketed by China-based makers, and ultra-low-cost...

Taiwan LCD TVs – 3Q 2014

TAIWAN FPD | Nov 14, 15:51

Taiwan's LCD TV manufacturing sector saw mixed performances among its players in the third quarter of 2014, resulting in only slight growth in overall shipments. For the whole of 2014, the Taiwan makers are expected to see a 1.8% growth in shipments, falling...

China FPD, 2014-2017
DIGITIMES Marketing Services
TD-LTE market developments and forecast, 2014-2016
  • 2014 global high brightness LED market, trends and shipment forecast

    For the global LED lighting market, the market size will reach US$25.82 billion in 2014 or a market penetration rate of 23.4%. This is attributable to exponential shipment growth for light bulbs, tubes, and directional lamps.

  • Greater China touch panel shipment forecast through 2015

    This Special Report provides forecasts through 2015 for Greater China touch panel shipments with breakdowns based on technology (glass, film, resistive), application (smartphone, NB and tablet) and by firm.

  • 2014 global tablet demand forecast

    This report analyzes the main players, their strategies and shipments forecasts for 2014, as well as other factors contributing to either growth or decline in various segments within the tablet market, with a particular focus on Apple, Google, Samsung, and Microsoft, along with whitebox vendors.