Taipei, Friday, July 25, 2014 00:50 (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
  • Google to incorporate NFC functionality into Android

    Mobile + telecom | 3h 12min ago

  • TPCA urges Taiwan government to upgrade PCB industry

    Bits + chips | 3h 24min ago

  • TSMC to offer more wafer starts to MediaTek in 3Q14

    Bits + chips | 5h 20min ago

  • TPK sees 2Q14 gross margin drop sequentially

    Before Going to Press | 4h ago

  • O-film Tech to acquire Shenzhen Temobi Science & Tech

    Before Going to Press | 4h 2min ago

  • PCB maker Apex completes capital expansion

    Before Going to Press | 4h 15min ago

  • Handset solution vendors may roll out 10-core CPUs in 2015

    Before Going to Press | 4h 26min ago

  • TPK posts 1H14 net EPS of NT$1.37

    Before Going to Press | 4h 26min ago

  • China market: Mainstream pricing for smart wireless routers stands at CNY100-200

    Before Going to Press | 4h 27min ago

  • More IC vendors to engage in merger or acquisition deals

    Before Going to Press | 4h 29min ago

  • Intel to launch Core M for use in notebook/tablet 2-in-1 models in 4Q14

    Before Going to Press | 4h 29min ago

  • Notebook thermal module makers eye business opportunities from electric vehicles

    Before Going to Press | 5h 38min ago

  • Career expects sales to peak in 4Q14

    Before Going to Press | 5h 39min ago

  • Acer sees booming sales of Chromebooks, says CEO

    Before Going to Press | 5h 47min ago

  • China PV module makers expected to ask Taiwan solar cell makers to offer incentives

    Before Going to Press | 6h ago

  • LG launches cloud-based monitors

    Before Going to Press | 6h 1min ago

  • AUO able to produce 42- to 75-inch WCG curved Ultra HD TV panels

    Before Going to Press | 6h 3min ago

  • Touch Taiwan 2014 to take place in late August

    Before Going to Press | 6h 4min ago

  • Global Ultra HD TV penetration to reach at least 6-8% in 2014

    Before Going to Press | 6h 4min ago

  • Digitimes Research: Japan promoting service robots

    Before Going to Press | 6h 5min ago

  • Small- to medium-size China smartphone component makers under pressure of being forced out in 2H14

    Before Going to Press | 6h 6min ago

Pause
 | 
View more

Analysis of China's revised domestic semiconductor industry goals

RESEARCH EXTRAS | Jul 16, 18:09

Facing a funding shortage for local IC manufacturers, the China State Council in June 2014 published guidelines to strengthen government support for China's semiconductor industry, while stating the short-, mid-, and long-term goals for the related industry supply...

The transition to 4k TV - UHD TV market forecast, 2014-2017

RESEARCH EXTRAS | Jun 26, 13:59

Ultra HD TV vendors are facing challenges due to an overall slowdown in the TV industry and are concerned whether relative supply chains can provide compatible Ultra HD content and services. However, trends show that content makers as well as panel and chip makers...

Taiwan notebooks – 2Q 2014

TAIWAN ICT | Jul 23, 12:53

Taiwan's notebook makers saw an unexpected sequential rise in shipments in the second quarter after the end of Microsoft's support for Windows XP generated a wave of replacement demand. Compared to the same period of last year, their shipments still dropped....

China smartphone market and industry – 1Q 2014

CHINA SMARTPHONE | May 15, 15:08

This report is divided into two sections; the first covers the China smartphone market, including shipments from international players and China-based players. The second section covers the China smartphone industry and covers shipments from local makers in the...

Taiwan LCD monitors – 1Q 2014

TAIWAN FPD | May 13, 15:41

Monitor shipments from Taiwan makers declined in the first quarter of 2014 mainly due to seasonality. And both upstream LCD panel suppliers and downstream system vendors remain conservative about the monitor market in the second quarter.

Analysis of China revised domestic semiconductor industry goals
DIGITIMES Marketing Services
2014 global smartphone market forecast
  • 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.