Taipei, Friday, October 24, 2014 23:51 (GMT+8)
partly cloudy
Taipei
23°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.

Analysis of China revised domestic semiconductor industry goals
DIGITIMES Marketing Services
DIGITIMES Translation Services
  • 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.