White-box tablet shipments reached only 15.9 million units in the second quarter of 2013, down 26.3% sequentially due to weakening tablet demand in May and June. Many smaller white-box players were also forced to quit the market, according to Digitimes Research's latest figures.
Although white-box tablet shipments peaked in April 2013, increasing component costs and the fact that consumers are becoming more sensitive over tablet pricing, are impacting white-box players' profitability.
For component supply, China-based chipmakers' competition is gradually becoming fierce for both single-core and dual-core processors. In August 2013, some single-core processor prices were as low as US$5. By the end of 2013, dual-core processor will become the basic specification for entry-level white-box tablets, while mid-range models will turn to quad-core processor completely, Digitimes Research noted.
DRAM and NAND Flash remained at high price points in the second quarter of 2013, but as related players are increasing their supplies in the third quarter, prices are dropping.
As for panels, an entry-level 7-inch TN panel was priced at about US$10-11 at the beginning of the third quarter, and the price has been rising. Although the industry is seeing tight panel supply, the issue is expected to be eased as more panel players will open up new production lines to manufacture small-to-medium size panels in the first half of 2014.
White-box vendors' over-optimism about demand in the first half created high tablet inventories for the vendors. Weak demand in Europe and North America has affected sales of both first-tier brand vendors and white-box players.
As for China, local first-tier brand vendors' increasing sales have impacted white-box models' demand in the country. Emerging markets such as India, Russia, countries in Eastern Europe, Latin America and Southeast Asia, are only providing limited contributions to white-box tablet players because shipments to these countries have just recently started.
Currently, strengthening their inventory management and expanding into overseas emerging markets will be important tasks for white-box tablet players to survive in the tablet market.
