EL SEGUNDO, CA— Strong growth in the processor market for tablet
devices this year and beyond will draw increasing competition from
suppliers eager to throw their hat into the ring, including the likes of
giant chipmaker Intel, according to a new report from IHS Technology
shipments in 2014 of tablet processors will reach an estimated 299.7
million units, up 23 percent from 243.1 million last year. Another
robust increase is expected in 2015 when volumes spike 18 percent, with
tablet processors then exceeding 400.0 million units by 2016, as shown
in the attached figure. The findings are contained in the report, “Intel Sets Aggressive Target in Tablet Processor Market.”
the iPad from Apple, Samsung’s Galaxy and other offerings from various
tablet makers still selling well among consumers, a number of vendors
are starting to join the race to supply tablet processors for the
market,” said Gerry Xu, senior analyst for processor research at IHS.
The players range from kingpin Intel, to a smattering of Chinese
suppliers involved in the so-called white-box market for lower-end
tablets, Xu noted.
the new entrants will face a small, entrenched group of tablet
processor makers with very deep pockets, which could make gaining
headway difficult for the upstarts.
this powerful group is Samsung Electronics, the maker of tablet chips
for the iPad, still the industry’s best-selling tablet. Another
formidable actor is Qualcomm, the chief supplier of baseband chips for
smartphones, which is also placing a huge bet on the tablet space with
semiconductors that provide cellular functionality to complement the
built-in Wi-Fi feature of tablets.
Intel, the highest-profile new competitor, its tablet chips will find
their way into a broad array of Android-based tablets. Intel Bay Trail
processors could be in entry-level, 7- to 8-inch Android tablets by the
first quarter, while later generations of chips—such as Cherry Trail and
Willow Trail—are planned for future implementation down the road.
new focus was confirmed in statements made by executives during its
November 2013 investor meeting, which indicated the company was entering
the tablet-processor space, making chips for devices from the
entry-level class all the way to high-end tablet models.
Intel’s task ahead—and how to fend off the Chinese
main challenge facing Intel will be how to compete in the entry-level
segment. The category, which claims one-third of the tablet processor
market, is crowded with Chinese vendors known for producing lower-end
but more affordably priced chips.
Chinese makers include the two largest vendors, Rockchip and Allwinner,
as well Amlogic, which is much smaller but still boasts of considerable
player, MediaTek from Taiwan, is already a major supplier of processors
for smartphones that is now looking to infiltrate the entry-level
tablet market. MediaTek is also known to be fiercely competitive in
tablets for which Chinese vendors are supplying could cost as little as
$50, so the tablet processors being made for these companies are also
priced much lower than comparable chips made for Tier 1 tablet brands.
major advantage for the Chinese, however, is an astute handle on costs
and the capability to produce turnkey chip solutions ready for deploying
in any number of generic white-box tablets, Xu remarked. While such
tablets carry little differentiation, they are designed in such a way
that the chips can be slapped on the devices for on-the-fly marketing
other Chinese vendors are said to be training their sights on higher
ground, which could pose another threat to Intel. Here the aim is to
gain design wins with global brands like Lenovo and Hewlett-Packard,
which have tablet models straddling the midrange.
again, an aggressive pricing strategy is the chief weapon of this group
of Chinese makers, which could make the midrange tablet processor field
more competitive in the process.
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