While visiting Southern China's white-box tablet supply chain, Digitimes Research discovered that shipments of white-box tablets with phone functionality saw their first on-year drop in the second quarter. This is because their major markets have experienced weak economy and competition is also growing from China-based smartphone brand vendors who have been expanding in overseas markets.
Since the fourth quarter of 2014, the major markets for inexpensive phone-enabled tablets, including Russia and Eastern Europe and Latin America, have been suffering from sharp currency depreciation, which relatively constrained these markets' purchasing and investments and the issues continued to impact the markets in the second quarter of 2015.
However, some of the markets such as Brazil and Southeast Asia saw their demand for white-box tablets with phone functionality drop because of increasing demand for 5.5- and 6-inch smartphones.
While demand for phone-enabled tablets is growing weaker in emerging markets, China-based TCL and Huawei, which had strong performances in overseas smartphone markets, have started expanding their phone-enabled tablet product lines and have been cannabalizing white-box tablet players with advantages over channel, quality and after-sales services.
Based on Digitimes Research's findings, TCL, which has advantage in the Latin America channel, is estimated to have shipped three million phone-enabled tablets in the first half, while Huawei, which is stronger in the Europe channel, is estimated to have shipped 1.5 million units.
As for the shipments from white-box players, the volume in the second quarter was lower than those of the first quarter and compared to a year ago, it also dropped over 15% because of the factors described above.