China-based white-box players are gaining the upper hand in the competition with first-tier brand vendors for tablet procurement orders from Asia Pacific governments due to their advantages in pricing, while improved product quality and stability also helped the white-box players to narrow their gap with first-tier players, according to sources from tablet players.
The government in Thailand recently released procurement orders for 1.6 million education-purpose tablets which were mostly taken by a China-based white-box player, and first-tier vendors are having trouble competing due to considerations about profitability, the sources noted.
The sources pointed out that the white-box maker landed orders for a total of 800,000 tablets from the Thailand government worth NT$1.57 billion (US$52.35 million), equivalent to a price of NT$1,900-2,000 for each device.
However, even with such a low price, the sources believe the white-box maker is still profiting from the orders.
Currently, an entry-level 7-inch tablet from a China white-box player is priced at about US$50 and can go up to US$70-90 in the retail channel, giving them strong advantages in price competition.
Although first-tier brand vendors are also aggressively trying to enter the entry-level tablet market, white-box players are still expected to achieve shipments of 120 and 170 million units in 2013 and 2014, respectively.
Article translated by Joseph Tsai
