Abstract

Intel, White-box Tablet Vendors Reinforce Cooperation for Bigger Slice of Market

Despite its leadership in the PC processor market, Intel is yet to be linchpin in the tablet industry. To change this situation, Intel has worked on breaking into the Chinese white-box supply chain since 2013, with an aim to build up a Chinese tech ecosystem. In May 2014, Intel teamed up with Chinese application processor manufacturer RockChip and they both agreed to jointly develop quod-core SoC Sofia, to be released in 2015. Through its alliance with Intel, RockChip has been able to obtain baseband IC solutions, thereby helping the company tap into the supply chain of global brands. For Intel, through the tie-up with RockChip, the company gets to enter the Chinese tablet processor and smartphone IC markets. The benefits of this cooperation are said on both sides.

White-box tablets now take about one-third of the total tablet market. Therefore, Intel cooperates with RockChip with an aim to capitalize on the latter's customer base in the Chinese white-box market. On top of that, the Intel-RockChip alliance can help Intel build up a supply chain of cheap core components for tablets. In addition to Wintel experiences, Intel is poised to build Android and other OS experiences on its own architecture. Providing low-cost turnkey solutions is the core strategy for Intel to march into the Chinese market and establish partnerships with Android related companies.

Future Tablet Market Growth Dragged

In 2014, global tablet market growth is weakening. This is proven by the fact that shipments of two leaders in the tablet market, Apple and Samsung, both failed to achieve sales thresholds. Furthermore, shipments for white-box tablets are also declining at the rather fast pace, affected by the availability of cheaper branded tablets and larger-sized smartphones.

Intel-powered tablets and new branded tablets released by Apple, Amazon, and Google are arguably to uphold tablet growth in the second half of 2014, traditionally the peak season for tablets. Global tablet market volume in 2014 is forecast to be still growing albeit at a slower rate of 12.4% in comparison to 2013, reaching around 270 million units in 2014.

Low-cost tablets continue to play its role as an impetus for growth in the tablet market. It is observed that while the share of high-end tablets such as Apple's iPads has decreased considerably, Chinese white-box tablets have gained a controlling stake of 35% in the global tablet market. Under the trend of cheaper tablets, the adoption share of tablet processors has been reshuffled. The share of MediaTek along with Chinese processor makers such as RockChip, Allwinner, and Amlogic has increased considerably. This is attributed mainly to strong sales of Chinese white-box tablets and lower-priced tablets launched by international brands like Acer, ASUS, and Lenovo. Intel – though yet to gain ground in the tablet market - has launched cheap Atom-based z37xx processors and has seen a huge improvement in terms of adoption share and sales volume. Beginning in September 2014, more Intel-powered tablets will be expected to hit the market, playing as another key factor to rev up the engines of growth in the tablet market. 

Appendix

Research Scope

This report covers tablets that are shipped with or without a keyboard (or a detachable keyboard). Tablet CPUs can be divided into ARM- and Intel-architectures. The screen sizes of tablets surveyed include 7- to 9-inches and 9- to 11-inches that are suited for entertainment purpose, and other inches.

This report surveys CPUs adopted by Taiwanese ODM makers for tablets, mainly application processors and wireless ICs.

Glossary of Terms

List of Companies