Taipei, Thursday, July 30, 2015 04:19 (GMT+8)
partly cloudy
Taipei
27°C
Digitimes Research: Taiwan ODMs losing out as PC brand vendors turn to China supply chain for tablets
Jim Hsiao, DIGITIMES Research, Taipei [Monday 7 April 2014]

Among global top-7 PC brand vendors, only Apple (sixth place) still outsources its tablet orders mainly to Taiwan-based EMS providers and ODMs, while the rest - Lenovo, Hewlett-Packard (HP), Dell, Acer, Asustek Computer and Toshiba - have gradually shifted their entry-level tablet design and manufacturing to China-based makers. Their actions are expected to impact Taiwan-based makers' share in global tablet shipments in 2014.

Lenovo and HP were the earliest vendors that started cooperating with China-based ODMs. In 2013, Lenovo manufactured most of its tablets in house, but the China-based vendor's entry-level A1000 was outsourced to China-based smartphone ODM Shenzhen Huaqin Technology and accounted for almost one third of Lenovo's tablet shipments in the year.

However, because Lenovo's mid-range and high-end Yoga tablets have been enjoying strong demand in 2014, Digitimes Research expects production of these Yoga tablets to occupy the company's in-house capacities for entry-level tablets and force Lenovo to outsource more to China-based ODMs.

In early 2013, through its white-box application processor (AP) partner Rockchip, HP cooperated with China-based ODM BYD for its tablet devices. Although initially BYD had several issues such as a lack of system integration abilities, poor quality of components from upstream partners and unstable shipping schedules, most of the issues have already been improved with supprt from HP and Rockchip. The improvements also have attracted orders from Toshiba.

Although HP has not placed orders with Rockchip in 2014, its partnership with BYD has grown tighter with outsourcing of its new Nvidia and Marvell-based tablets.

On the other hand, starting in the second half of 2013, Intel has treated BYD as an important partner for the tablet market and has been helping it build up its manpower and technology strength. Intel is also offering price cuts for its processors and marketing subsidies to attract brand vendors to use solutions from China players and has successfully attracted Dell and HP to develop Android on x86 tablets.

Dell's new Android tablets for 2014 are expected to adopt Intel processors and be outsourced to BYD for production.

Seeing entry-level tablets' ASP dropping constantly, Taiwan-based brand vendors, which did not consider outsourcing their tablet production to China makers in 2013, started evaluating the option in early 2014 with Acer being the most aggressive. In January, Acer outsourced its 7-inch Iconia One 7 to China-based 3NOD for both the manufacturing and design. Although Acer only placed limited orders and is selling the device mainly in China, the move has shown the vendor the feasibility of outsourcing to China makers. Acer has now also outsourced its new mainstream 7-inch and 7.85-inch tablets to China makers.

After losing its chance to cooperate with Google for next-generation Nexus tablets, Asustek, to make up for losses in shipments to the mid-range and high-end market segments, reportedly may partner with China-based makers to strengthen its competitiveness in the entry-level market.

Samsung Electronics and Lenovo, which mainly manufacture their tablets in house, were expanding their presence in the tablet market during 2013, reducing Taiwan ODMs' combined share in total tablet shipments from over 80% in 2012 to only 66.3%.

Since the top-6 PC brand vendors' shipments account for 17.5% of the global tablet shipments (including the Nexus 7), Taiwan's shipment share may drop below 60% if the vendors give all their entry-level tablet orders to China makers.

Topics: Page 2

Companies: Acer Asustek Computer

Realtime news
  • Wistron chairman expresses concerns about China supply chain takeover

    Before Going to Press | 6h 22min ago

  • China-based Wei Dong partners with Global View to introduce Taiwan educational resources

    Before Going to Press | 6h 23min ago

  • Silicon Motion expects to deliver another year of record sales

    Before Going to Press | 6h 24min ago

  • Equipment maker Foxsemicon diversifying offerings

    Before Going to Press | 6h 25min ago

  • Taiwan IC firms positive about demand for USB 3.1 Type-C solutions

    Before Going to Press | 6h 25min ago

  • LG top TV panel supplier to China in 1H15

    Before Going to Press | 6h 25min ago

  • HTC to make investment in VR application provider WEVR

    Before Going to Press | 6h 26min ago

  • China imports 10,942 tons of polysilicon in June

    Before Going to Press | 6h 26min ago

  • TPK revenues slip due to decline in handset touch panel shipments

    Before Going to Press | 6h 27min ago

  • Digitimes Research: Taiwan 2Q15 LCD TV shipments decline 8% on year

    Before Going to Press | 6h 27min ago

  • Digitimes Research: Taiwan 2Q15 small- to medium-size panel shipments drop 0.4%

    Before Going to Press | 6h 28min ago

  • High-end graphics cards become new focus for vendors

    Before Going to Press | 6h 28min ago

  • Taiwan market: TWM, FET maintain monthly price of NT$998 for unlimited 4G use

    Before Going to Press | 6h 29min ago

  • UMC expects wafer shipments to drop in 3Q15

    Before Going to Press | 6h 30min ago

  • Low order visibility for 2H15, says SPIL chairman

    Before Going to Press | 6h 30min ago

  • WearWise unveils new wearable camera

    Before Going to Press | 6h 31min ago

  • Getac launches new ruggedized tablet with improved gear

    Before Going to Press | 6h 31min ago

  • Motorola launches 3 new smartphones

    Before Going to Press | 6h 32min ago

  • Corning announces 2Q15 core sales of US$2.5 Billion

    Before Going to Press | 6h 33min ago

Pause
 | 
View more

Display panels for wearable devices: Market overview and forecast through 2017

RESEARCH EXTRAS | Jul 23, 12:15

The wearables market is a growing focal point for many vendors and players in the display panel supply chain. This Digitimes Research Special Report looks at developments in panel applications in the wearable industry, with a specific focus on panel makers in...

Developments in the UV LED industry

RESEARCH EXTRAS | Jul 16, 18:28

As white LED applications are becoming more widely accepted and common in the market and China makers push more price-competitive solutions, the 2015 global high-brightness LED output value is expected to only grow 7.5% on year. It is not surprising that in a...

Taiwan notebooks - 2Q 2015

TAIWAN MOBILE DEVICE | Jul 24, 15:33

The global notebook market remained sluggish in the second quarter of 2015. The seasonal pattern that has governed the notebook market previously will not appear in 2015, with Taiwan makers set to see on-year declines in the shipments during the second half of...

Taiwan LCD TVs – 1Q 2015

TAIWAN DISPLAY SYSTEM | May 22, 15:51

Taiwan's LCD TV makers saw strong seasonal impacts in the first quarter of 2015. Shipments to North America saw a particularly sharp decline as a result of reduced procurement from Mexico and major client Toshiba quitting the North America market.

Taiwan handsets – 1Q 2015

TAIWAN MOBILE DEVICE | May 15, 15:58

Most of Taiwan's handset makers felt strong seasonal effects in the first quarter. Foxconn suffered particularly as a result of drastic drops in orders from Sony Mobile and Microsoft Mobile.

High-brightness LED market trends and forecast, 2015
Trends and forecasts for the China FPD industry, 2014-2017
Demand and supply trends in the global sapphire industry, 2014-2015
  • Wireless broadband developments in Southeast Asia markets

    As of 2013, the 10 ASEAN nations had a total of over 700 million mobile subscriptions, with the CAGR from 2003-2013 reaching 24%. This Digitimes Research Special Report analyzes the various mobile broadband markets in ASEAN and looks at the respective trends in 4G LTE development for those markets.

  • 2015 global tablet demand forecast

    This Digitimes Research Special Report provides a 2015 forecast for the global tablet market and analyzes the strategies of key market players such as Google, Apple, Intel, and Microsoft.

  • 2015 China smartphone panel trend forecast

    This Digitimes Research Special Report analyzes the strategies of key China-based major panel makers BOE, Tianma and IVO for attacking the different market segments through technology and pricing, and their relationship to local vendors Huawei, Lenovo, ZTE, Xiaomi and Coolpad.