Abstract
The rising share of iPad mini in Apple's total product shipment and that of several low-cost tablets such as Acer Iconia B1 affected the Taiwanese tablet application IC market in the second quarter of 2013. As a result, the share of entry-level APs (Application Processors) and price-competitive integrated APs is increasing at a steady pace. This report profiles the development of the Taiwanese tablet application IC market, including APs and wireless communications ICs, in the second quarter of 2013 and examines the future trends of the tablet industry in the second half of 2013 and beyond.
MediaTek's Share in the AP Market Increases Rapidly
In 2012, MediaTek obtained orders from Lenovo and white-box tablet vendors that helped the company enter the tablet market. Leveraging its accumulated customer base in the smartphone arena and its chip integration capability as well as its advantage in baseband integrated ICs, MediaTek is able to launch 3G/4G/GPS (Global Positioning System/FM (Frequency Modulation) integrated processors to break into the tablet supply chain. In the second half of 2013, MediaTek is poised for the launch of a processor exclusively for tablets. With comprehensive IT support solutions, MediaTek aims to rapidly tap the tablet market demand by duplicating its business model that runs well in the smartphone industry.
Other than its rapid spread in the white-box tablet market, MediaTek also has obtained the support from Taiwanese branded vendors as they have begun adopting its processors for their low-cost tablets. In the second half of 2013, it is expected that shipment models and volume of tablets will increase considerably.
Chinese AP Suppliers to Cut into the Branded Tablet Supply Chain
In anticipation of the price reduction promotion for older models, which is normally initiated by Apple after the release of a new model in the fourth quarter, other branded vendors have made their efforts to launch products featuring a larger price gap compared to their 2012 models in order to grow their market share. With tablets currently suffering from the vicious low price competition, branded vendors have been strategically adjusting the price range of their mainstream products to between US$150 and US$200 in order to compete head-to-head with white-box tablets priced normally lower than US$150.
In the product segmentation with a price point lower than US$150, branded vendors have been driven to seek new key component supplies at lower prices. This has brought new business opportunities for Chinese AP suppliers. They have been actively approaching tablet vendors while some have entered the trial run phase for their jointly developed products. It is expected that the impact of low-price trend on the overall tablet supply chain will become more pronounced.
Appendix
Glossary of Terms
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AP
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Application Processor
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FM
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Frequency Modulation
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GPS
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Global Positioning System
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OS
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Operating System
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Wi-Fi
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Wireless-Fidelity
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List of Companies
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Acer
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Apple
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ASUS
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Broadcom
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Compal
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Foxconn
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Freescale
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Huawei
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Intel
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Inventec
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Lenovo
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Marvell
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MediaTek
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Nvidia
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Pegatron
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Qualcomm
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Quanta
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Ralink
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Realtek
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Samsung
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ST-Ericsson
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TI
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Wistron
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