TrendForce: Tablet Software and Hardware See Difficulties on Differentiation, 2014 Shipment to Defend 20% Growth Target

Based on the projection by WitsView, the display division of the global intelligence provider TrendForce, the tablet shipment is projected 229 million units for entire 2014, seeing an annual growth dipping to around 20%. As the expectation that Windows 8 encourages tablets’ commercial application in 2014 is shattered, the dominant Android damps the possibility the OS lifts the sales momentum. Besides, the hardware also is pressured by prices, making the spec launched by brands to gain little traction among consumers.

WitsView points out several challenges to the hardware differentiation. Firstly brands launch 12”-and-above tablets to develop the niche market in 2014. Nevertheless, the large-sized product is contradictory to tablets’ two major values, easy mobility and affordable price, making the product hard to promote.

Secondly, the high-resolution product’’ obstacle of high price is hard to clear as it stumbles on the way. Witsview indicates the core to the high-resolution tablets is the panel, and the panels with 300 PPI-and-above resolution see challenges on the capacity, yield, and cost. Google’s 2^nd generation Nexus 7 unveiled in H2’13 is equipped with high 300 PPI resolution but its elevated selling price is reflected on the poor sales, underlining tablet consumers are more sensitive about the price than about the spec. Witsview continues to hold a conservative view on the high-resolution tablets’ sales in 2014.  

Last, as the hardware differentiation is hard to achieve, the best measure to stir sales comes to price cuts. For 2013 Black Friday, HP has revealed a 7” tablet tagged at only $89, pressing down brands’ entry-level tablets’ prices to below $100. To lower costs, brands are forced to take into account the cheaper components, including the short-lived TN panels in H1’13 and the single layer touch modules commonly adopted by white-box makers, which will be determinants for brands to cut prices in exchange of sales volumes in 2014.

WitsView indicates 2013 is a harsh year for white-box tablet makers as on top of brands’ price cuts that squeeze their room for survival, the sudden price surges of key component, such as DRAM, drain makers’ limited profits and force small makers to withdraw from the market. As the emerging markets have strong demands for low-priced tablets, after several cruel eliminations, the existing white-box tablet makers are relatively strong and healthy in terms of finance and business scale and are able to integrate ample resources to share the low-priced tablet demands in developing economies, including South American countries and India.

Based on WitsView’s data, the 2014 tablet shipment growth will be down from 34% this year to 20%, while white-box tablets see an annual growth rising from 7% to 21%.


Source: WitsView