Digitimes Research: Verizon to ship three million own-brand tablets in 2015

Jim Hsiao, DIGITIMES Research, Taipei 0

Several mobile communication industry-related players have achieved strong tablet sales for 2014 and in addition to brand vendors such as Lenovo and Huawei, several telecom carriers are also achieving good results selling own-brand 4G tablets that bundle with their telecom services, according to Digitimes Research's new findings. Among the telecom carriers, the largest wireless/mobile telecom carrier in the US, Verizon Wireless, has performed the best.

Verizon launched its first own-brand 4G tablet, the Ellipsis 7, manufactured by Quanta Computer, at the end of 2013. Because the device is only selling for below US$100 with a 2-year 4G service contract, the attractive pricing and the carrier's strong telecom channel presence is expected to boost the Ellipsis series products' shipments to 2.16 million units in 2014.

Verizon has recently launched the 8-inch Ellipsis 8 tablet for the 2014 year-end holidays. The carrier offered the device for free with a 4G service contract during Black Friday promotions and the device is now priced at US$49 with a contract. With the tablet's attractive pricing, Digitimes Research expects Ellipsis series shipments to reach three million units in 2015.

Digitimes Research believes the success of the Ellipsis tablets were due to three major factors: 4G services' high transmission speed, its low penetration rate and the tablets' low communication module costs.

Tablets with strong hardware specifications have been unable to perform at their best in gaming and video playback on a 3G network because of transmission speed limitations. But with 4G's high speed transmission, tablets with larger displays, higher resolutions and better graphics output will be able to deliver better usage experiences.

Currently, only close to 50% of the telecom service users in the US are using 4G networks and therefore further penetration can be expected in the future. Although Verizon has the largest 4G user base in the US, the 4G users are accounting for less than 60% of the carrier's overall users, giving it plenty of space to promote its 4G services by subsidizing mobile devices.

As for costs, Verizon's high 4G coverage and strategy to gradually phase out its 3G CDMA2000 business also increase the competitiveness of Ellipsis tablets, which supports 4G networks only. Compared to other branded tablets, which need to adopt multi-mode baseband modules, Ellipsis tablets see lower production costs.

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