Worldwide tablet shipments dropped 9.4% sequentially and 13.2% on year to reach only around 40 million units in the second quarter of 2016. This was due to overall weak demand for tablets; seasonality; dropping sales of Wi-Fi-only tablets, tablets with phone functionality and 2-in-1 devices; and shortages for key components such as panels.
Digitimes Research originally expected the release of the 9.7-inch iPad Pro to raise Apple's tablet shipments sequentially in the second quarter, but the volume turned out to drop 4% sequentially and reached only 9.6 million units in the quarter because the 9.7-inch iPad Pro took a lot more demand from its 12.85-inch counterpart than expected, while Apple also stopped producing the iPad Air in the quarter.
Among the three major camps, white-box players performed the weakest in the second quarter. With more large-size independent design houses (IDH) quitting the market plus shortages of components including panels, memory and processors, white-box players saw their combined shipments drop to a new low at 13.8 million units in the second quarter.
Non-Apple first-tier vendors' inexpensive tablets were mostly released in the second quarter, but combined shipments were down 7.1% sequentially to reach only 16.98 million units as product differentiation, number of models, and price competitiveness were all inferior to in 2015.
Samsung Electronics was the largest vendor in the camp in the second quarter, but its new tablets launched in the quarter did not help its shipments grow from the first. Amazon maintained strong shipment performance in the second quarter slightly surpassing Lenovo to rank second. Lenovo and Huawei ranked three and four.
As for Taiwan-based ODMs, combined shipments also reached to a new low at 13.52 million units in the second quarter since orders for iPads and Microsoft Surface products were down from a quarter ago. Foxconn Electronics (Hon Hai Precision Industry) and Compal Electronics were the largest and the second largest tablet ODMs in the quarter, with shipment shares both up from a quarter ago thanks stable orders from US-based clients.