Supply chain
Digitimes Research: Intel to see strong tablet AP shipments in 2H14
Eric Lin, DIGITIMES Research, Taipei

Intel shipped only about 1.5 million tablet application processors (APs) in the first half of 2014, but Digitimes Research expects its shipments to reach seven million units in the second half thanks to China brand vendors' and white-box players' full support.

Meanwhile, Intel will reduce its marketing expenses for the segment because it will no longer need to heavily subsidize component suppliers whose production costs have lowered.

Intel will soon release its inexpensive solutions for smartphones and tablets with phone features and the solutions should strengthen Intel's product lineup in the market, Digitimes Research analyzed.

After successfully entering into the supply chains of first-tier brand vendors and China white-box players, Intel has been aggressively seeking alternative sources of component supply in China to lower its solutions' costs. The CPU giant has also been putting effort into app development as well as app ecosystem improvement.

As the first chipmaker to release Android 64-bit solutions, Intel, despite the fact that its architecture is natively incompatible with ARM's platform, has been trying aggressively to fit into the industry through the new 64-bit architecture and has gained support from many app developers.

Intel's new platforms for phone-supporting tablets and smartphones, which will be released soon in the second half of 2014, include SoFIA and Merrifield-based chips. In addition to integration or pairing with an independent baseband, the APs' computing performance and costs have also seen much improvement. The APs are also very competitive against other-soon-to-be-released ARM-based 64-bit products.

Entering the 64-bit generation, Intel's investments in the market and development support are expected to start paying off gradually. In addition to hardware platform's increasing penetration rate, Intel's app store's x86-optimized apps are also becoming more common and with Intel's advantages in the manufacturing process, apps' user experience gap between x86 and ARM will gradually disappear.

End device developers will only need to consider differentiation, costs and length of the development cycle and Intel's clients will also have no need to worry about chip costs. As its product's characteristics and ecosystem become more competitive, Intel will gradually return to its usual strategy and abandon its current subsidy strategy.

Content from this article was part of a complete Digitimes Research Chinese-language report that has not yet been translated into English. If you are interested in an English version of the report or wish to receive more information about the report, click here to contact us and we will get back to you as soon as possible. Digitimes Research also provides quarterly tracking services for market sectors such as China Smartphone, China Smartphone AP, Taiwan ICT and Taiwan FPD. Click here for more information about Digitimes Research Tracking services.

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