2013 global tablet forecast
DIGITIMES Research
Special Report
James Wang, DIGITIMES Research, December 2012
Introduction
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Based on analysis of the major platform companies and white box tablets, Digitimes
Research forecasts that global tablet shipments will overtake notebook shipments in 2013,
growing by 38.3% on 2012 levels to hit 210 million units; shipments of branded tablets
alone are forecast to 140 million units.
The aggressive pricing of the Nexus 7 and Nexus 10 is likely to give Google strong
momentum in 2013. Digitimes Research projects that Google will become the number two
large tablet vendor in one fell swoop, with shipments topping 19 million units. While Apple
will retain the number one spot, its share of branded tablet shipments will decline to just
55.6%; factoring in white box tablets, Apple’s share of tablet shipments will drop to just
37.4%.
The explosion in white box tablet shipments in 2012 means that Android will overtake iOS
to become the largest platform in 2012. Combined shipments of all Android tablets –
including branded, white box, Amazon and Barnes & Noble (B&N) devices – are projected
to hit 121 million units in 2013, representing 40.2% growth on 2012 figures.
Digitimes Research also projects that global shipments of branded and white box tablets
will hit 320 million by 2015, with branded devices accounting for some 220 million units
and white box tablets for the remaining 100 million.
Note: Unless otherwise noted, the source of all charts and tables in this report is Digitimes
Research
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Definitions
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Device definitions
Product type
Exterior design
Definition
Clamshell
Can be pivoted to an angle ≤180°
Dual screen type
Convertible
Sliding cover type
Tilting type, can be pivoted to an angle >180°
One-piece type, keyboard can be added but is limited to text
input
5” plus with no cellular voice call functionality
6” plus with cellular voice call functionality
NB
One piece
Tablet PC
One-piece type with a detachable keyboard dock that adds
additional features such as external ports, storage, batteries
and even separate processors
Includes touch panel and app store(s)
Large size is defined as less than 6” with cellular voice call
functionality
Modular type, for example where a dock or second screen can
be added
Detachable
Smartphone
Portable media
players
Includes touch and non-touch screens
Screen size les than 5” for touchscreens
Note: Will include different processor architectures and operating systems in a single device.
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Device definitions (1)
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The line between tablets and notebooks is likely to become increasingly blurred, while the
share of shipments accounted for by products positioned somewhere between the two
categories is likely to rise. For statistical purposes and in order to avoid double counting
products/shipments in both the tablet and notebook categories, Digitimes Research uses
the following definitions to differentiate tablet PCs, notebooks, smartphones and media
players.
Tablet PCs are defined as standalone mobile devices that may or may not have a physical
keyboard; where there is a keyboard, it can be detached from the main device without
impeding its operation. Tablets can be subdivided into one-piece and detachable products.
Keyboards may be used with one-piece products, such as Bluetooth wireless keyboards, or
the wired keyboard peripherals available for the iPad, which connect via Apple's proprietary
connector; the functionality of such keyboards is essentially limited to text input.
Detachable tablets consist of a main unit with a multifunctional keyboard dock that may
include external ports, storage, and even separate processors, as well as text input
functionality For example, some dual-OS models feature an ARM-based architecture in the
main unit to run Android and an x86 processor in the dock to run Windows.
According to this definition, the Windows 8 Pro and Windows RT versions of the Microsoft
Surface, and detachable mobile computing devices running windows with an added x86
processor, are all classified as tablets and are therefore included in tablet shipment
calculations.
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Device definitions (2)
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Notebooks may have processors situated in either the screen or the keyboard portion of the
device, but the keyboard and screen cannot be detached or otherwise separated. Notebooks can
be subdivided into clamshell and convertible types.
"Clamshell" means that the notebook's screen can be pivoted away from the keyboard at an angle
no greater than 180 degrees; this category also includes dual-screen designs such as the Asus
Taichi.
The "convertible" category includes sliding and tilting designs where the screen can be pivoted at
an angle greater than 180 degrees, such as the IdeaPad Yoga.
Tablets and smartphones are primarily differentiated by screen size, with the dividing line set at
seven inches. Thus, the Samsung Galaxy Note's 5.3-inch screen puts it in the smartphone
category, while the Galaxy Tab 7 3G version's 7-inch screen qualifies it as a tablet, despite its voice
call functionality.
Seeing the success of Samsung’s Galaxy Note, some Chinese smartphone vendors are designing
6.x-inch smartphones. Digitimes Research grouped these devices into smartphone category so
their shipments will not be counted in this report.
Digitimes Research believes that these product definitions will enable different types of product to
be more clearly distinguished, thereby helping to avoid conflicts with the definitions
Digitimes Research defines tablet shipments as the number of units built for brand vendors by
ODM/OEM manufacturers (unit build), rather than using alternative definitions such as brand
vendors' shipments to channels (sell in) or actual sales to consumers (sell through).
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White box tablet definition: Shipments mainly in China
Definition and differentiation
by industry
White box tablets
White box tablets are mainly
produced by companies with a
background in white box
handsets, netbooks, media
players and digital photo
frames, based in the South
China region
Grey area
between
white box
and branded
tablets
Branded Tablets
Apple, Google, Microsoft,
Amazon, B&N, Samsung,
Asus, Acer, HP, Dell, Sony,
HTC, RIM, etc.
Definition and differentiation
in terms of brand recognition
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White box tablet definition: Shipments mainly in China
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Digitimes Research figures for tablets previously counted only branded devices, but now also include
white box tablets.
Digitimes Research figures show branded tablet shipments based on tier-one brand, and white box
tablet shipments based on what was the clone device industry. There is no overlap between these two
sectors of the tablet industry, in order to avoid problems of duplicate figures.
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Tier-one firms include Apple, Google, Microsoft, Amazon, Barnes & Noble (B&N), Samsung, Asus,
Acer, HP, Dell, Sony, HTC, RIM and others.
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White box tablets overwhelmingly use different AP solutions to branded devices in order to keep
costs down. Many such solutions are sourced from China-affiliated suppliers, including Amlogic,
Wonder Media and Telechip; the supply chain is therefore distinctly different from the branded
tablet sector.
Digitimes uses the term “white box” to denote companies that were previously largely clone device
makers, which are mostly located in Shenzhen, as well as parts of the East China region. However,
there is still a grey area between white box and branded tablets that is difficult to make completely
clear.
There is considerable variation in the level of recognition that different brands enjoy, from former
white box firms like Lanmo, Gaofei and Ainuo, to channel company brands like Bestbuy’s Insignia
brand, and tier 2 or tier 3 brands like HiSense, Haier, Philips, NEC and Toshiba. It is therefore difficult
to draw a clear line between white box and branded products.
White box and clone devices are different concepts to begin with, and there is a grey area between
both concepts and the existence of a specific brand. However, shipments of models that fall into this
difficult to calculate grey area remain small and within the extent of a reasonable margin of error.
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Chap. 1
Overview of branded tablets in 2012
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Overview
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Digitimes Research projects that global branded tablet shipments will reach
104 million in 2012, representing 64% growth on 2011 figures.
The iPad will account for roughly 63% of this figure, a drop of two
percentage points on 2011, while shipment share for Android and Windows
tablets will increase slightly.
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Chap. 1.1
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Global branded tablet shipments, 2011-2012
Unit: m units
iPad
Non-iPad
120
100
38.9
80
60
22.3
+37.4%
40
20
65.0
41.0
+58.5%
0
2011
10
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2012(e)
Global shipments of branded tablets are
forecast to hit 104m units in 2012
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In 2012, Apple built on strong iPad 2 sales to effectively squeeze out
other players during the first half of the year; and although other
brands returned to growth in the third quarter and saw explosive
growth in the fourth quarter, whole year growth rates for Apple tablets
remain some 21 points higher than for other brands.
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Global tablet shipments by brand, 2011-2012
Unit: m units
70
1
60
50
40
2011 ranking
30
20
3
2
7
4
8
5
10
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Apple
2011
2012(e)
41.0
65.0
Amazon Samsung Google
3.5
10.8
4.6
7.4
0.0
4.9
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Asus
Microsoft
B&N
Lenovo
Acer
1.5
2.7
0.0
2.5
2.9
2.5
1.1
2.1
1.9
1.5
Other
tier 1
6.8
4.5
Google shoots into the top 4,
Microsoft’s ambitions has potential for Surface
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While Apple remain secure in first place, the rankings for other brands will change significantly in
2012.
Amazon is expected to overtake Samsung to take second place, while Samsung will fall back to
third.
If the Nexus 7 and Nexus 10 were included in Google’s shipment figures, Google would be the
fourth ranked brand, overtaking all hardware brands except Samsung and Apple.
Without the Nexus 7, Asus would be ranked fifth with 2.7 million units; including Nexus 7
shipments, Asus would be ranked fourth with 7.0 million.
Microsoft’s target is to ship 3.0 million to 5.0 million units in the fourth quarter, depending on the
level of shipments that the supply chain can support.
B&N is forecast to ship just 2.5 million units, and no more than 3.0 million in the most optimistic
scenario; its shipments will largely be determined by its ability to meet targets in the fourth quarter.
Whole-year shipments for Asus, Microsoft and B&N will see little change under stable conditions;
however, the latter two firms may overtake Asus if they meet their shipment targets.
Lenovo will ship some 2.1 million units, almost double the level seen in 2011, although Google and
Microsoft’s move into the market means that Lenovo’s ranking will remain unchanged.
Acer’s whole-year shipments of just 1.45 million will see it fall to ninth place.
In 2011, RIM was sixth, Motorola and HP tied in ninth place, and HTC was 11th; all have now
dropped out of the top 10.
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Taiwan-based ODM/EMS tablet
shipments, 2011-2012
Unit: m units
70
60
50
40
30
20
10
0
Foxconn
2011
41.5
2012(e)
64.6
Quanta
5.3
14.6
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Pegatron
1.6
8.3
Compal
3.0
1.6
Wistron
0.2
1.5
Inventec
3.9
0.4
Major client orders are concentrated on the top 3 firms,
which collectively account for 96% of Taiwan shipments
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The branded tablet market is becoming more concentrated in the hands of a small
number of platform companies. Taiwan-based ODM/EMS firms will therefore only
be able to maintain whole-year shipments in the one to two million unit range,
unless they are able to win orders from these platform firms.
The 9.7-inch iPad remains the mainstay of Foxconn’s tablet shipments, although it
has also won a portion of iPad mini orders and is also making the Kindle Fire HD
8.9-inch for Amazon; this gives Foxconn shipments of 64.6 million, representing
56% growth on 2011.
Quanta continues to hold on to orders for 7-inch Amazon devices and is also
assembling the Nexus 7. Its success in maintaining concurrent relationships with
two competing brands will allow in to achieve shipments of 14.6 million,
representing 176% growth on 2011.
Pegatron has also won some iPad Mini orders and is assembling the Surface for
Microsoft, giving it whole-year shipments of 8.3 million and a formidable year-onyear growth rate of 407%.
Compal and Inventec will both see shipments drop markedly on 2011 levels as a
result of clients moving out of the market or switching to in-house production.
Wistron’s shipments will see growth in 2012 as a result of it winning orders for the
Asus Transformer TF300.
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Chap. 1.2
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Global shipments and shipment share for branded and
white box tablets by size, 2011-2012
Unit: m units
█ 7.x”
█ 8.x”
█ 9.x”
█ 10.x”
100%
60.3
█ >11”
Unit: %
0.4
0.1
11.4
13.7
67.8
58.1
80%
42.2
60%
27.6
40%
14.2
12.6
20%
7.1
0.41.3
7.x"
8.x"
0.10.4
9.x"
0.6
20.2
26.6
2011
2012(e)
0%
10.x" >11"
Note: Figures on the left of each category in the bar chart are for 2011;
figures on the right are for 2012 shipments.
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1.3
Large tablets remain dominant in 2012
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While Apple, Google and Amazon have all launched 7.x” models,
shipments of these smaller sizes are concentrated in the second half of
the year, particularly the fourth quarter. 9.x” models will therefore still
account for the largest share of whole-year shipments at 58%.
Nevertheless, shipments of 7.x” and 10.x” models are both growing
much more rapidly that those of 9.x” models, with shipments of both
categories set to more than double in 2012.
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Global branded tablet shipments and
shipment share by OS, 2011-2012
Unit: m units
65.0
█ iOS
█ Android █ Windows
Unit: %
100%
4.4
0.5
3.6
80%
30.3
33.9
64.8
62.6
2011
2012(e)
41.0
35.2
█ Other
60%
40%
19.2
20%
3.7
0.3
iOS
2.8
0.0
Android Windows Other
0%
Note: Figures on the left of each category in the bar chart are for 2011; figures
on the right are for 2012 shipments.
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iOS still accounts for 63% of branded tablet
shipments in 2012; but Windows grows
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Android and Windows’ share of shipments will grow in 2012, while iOS and other
platforms will see their shares drop.
iOS’ share of branded tablet shipments is expected to drop back to 54% in the fourth
quarter of 2012 from a second-quarter high of 75%, as rival products were launched in
the second half of 2012. iOS will nevertheless still account for 63% of whole-year
shipments.
Shipments of branded Android tablets are projected to hit 35.2 million, with Amazon
and B&N’s modified Android platforms accounting for 13.3 million collectively, giving
shipments of 21.9 million for official Android tablets, of which the Nexus 7 and Nexus
10 will collectively account for 4.9 million.
Shipments of Windows models will reach 3.7 million, of which the Surface will account
for 2.5 million, with other hardware brands accounting for the remaining 1.2 million.
RIM and HP sold tablets using their own BlackBerry Tablet OS (QNX) and WebOS
platforms in 2011, but have already withdrawn from the market in 2012.
RIM’s 2012 financial reports show that more than 1.0 million BlackBerry Playbook
tablets were still shipped, but most of these were leftover stock from 2011.
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Global shipments of branded tablets
by AP vendor, 2011-2012
Unit: m units
70
60
50
40
30
20
10
0
2011
2012(e)
Apple
41.0
65.0
TI
8.9
19.1
NVIDIA
7.8
13.4
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Samsung
1.7
3.6
Qualcomm
3.0
0.8
MediaTek
0.0
0.8
Intel
0.0
0.7
Other
0.8
0.5
TI and Nvidia’s shipments hit 10m chips,
MediaTek and Intel also move up the rankings
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Apple, TI and Nvidia were the top three application processor (AP) suppliers
for branded tablets in 2012, with shipments for TI and Nvidia both
surpassing the 10 million mark.
Samsung’s AP chips are mainly shipped for use in its own device. The
company will ship less than 4.0 million chips in 2012, making it the fourth
largest tablet AP supplier.
Qualcomm has suffered from capacity bottlenecks in the smartphone
market, as well as the loss of two major clients as HP and HTC dropped out
of the tablet market; its tablet AP shipments have therefore dropped to less
than 1.00 million chips.
MediaTek is the AP supplier for the Lenovo IdeaPad S2107, and its 2012
shipments will therefore stand at around 800,000 chips.
Intel is supplying APs for Windows models made my PC manufacturers,
giving it tablet AP shipments of around 700,000 chips.
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Convertible tablet shipments, 2011-2012
k units
Android
Windows
3,500
3,000
620
2,500
2,000
1,500
2,240
1,000
500
1,300
0
2011
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2012(e)
Windows 8 drives the switch from
notebooks to convertible tablets
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Digitimes Research classifies convertible models as tablets rather than
notebooks; shipments of such models will reach 2.86 million in 2012,
representing 120.2% growth on 2011.
Shipments of Android models will reach 2.24 million, equivalent to 72.3%
growth on 2011 levels.
Shipments of Windows models will total 620,000, 21.7% will be convertible
models. However, Windows’ share of shipments will eventually overtake
Android as PC manufacturers launch new products.
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Chap. 2
The rise and impact of white box tablets
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Rise and impact of white box tablets
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The white box tablet sector has seen stunning growth in 2012, with whole-year
shipments likely to exceed 50 million units, making the white box sector too big
to ignore. Like the vast majority of research organizations, Digitimes Research
previously only kept figures for branded tablet shipments, but has now become
one of the first research firms in include figures on white box tablets in its
calculations.
White box tablets have seen such massive growth for three main reasons. First,
the growth of Android handsets has brought with it a huge potential customer
base for tablets; second, China-based AP solutions have reached maturity; and
third, whole-unit manufacturing costs for white box tablets continue to drop.
Digitimes Research also discovered that the overall picture of the global tablet
industry is markedly different when the white box sector is factored in, with
Android already overtaking iOS as the number one platform in 2012 and seveninch models becoming the mainstream specification.
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Chap. 2.1
Overview of white box tablets in 2012
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Quarterly shipments of white box
tablets by processor, 2012
Unit: m units
20
16
12
8
4
0
Total
Other
InfoTM
Via
Amlogic
Rockchip
Allwinner
1Q12
5.9
0.5
0.6
1.0
0.8
1.9
1.1
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2Q12
11.7
0.7
0.8
0.9
1.3
3.2
4.8
3Q12(e)
16.1
1.1
1.0
1.1
1.7
3.8
7.5
4Q12(f)
17.2
2.0
1.1
1.2
1.9
3.7
7.3
White box tablets shipments are
forecast to hit 50.9m units in 2012
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Digitimes Research estimates whole-year white box tablet shipments for
2012 at 50.9 million units, representing fivefold growth on the previous
year’s 10 million units.
White box tablet shipment growth has been rapid throughout 2012, with
shipments growing by four to five million units per quarter during the first
three quarters.
Some export orders were delivered ahead of schedule in September, with
the result that fourth quarter shipments show a slowdown in growth.
Shipments are split roughly 35:65 between the first and second halves of
the year, giving white box tablets a broadly similar seasonal distribution to
other rapidly growing consumer electronics (CE) products such as branded
tablets, or e-readers in 2011 and earlier.
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Global shipments of branded and
white box tablets, 2011-2012
Unit: m units
180
160
140
120
100
80
60
40
20
0
Apple
Other mainstream
brands
White box
Total
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+111%
+59%
+74%
+409%
2011
41.0
2012(e)
65.0
22.3
38.9
10.0
73.3
50.9
154.8
Global tablet shipments will top 155m in 2012, with
white box tablet shipments second only to the iPad
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When white box tablets are factored in, whole-year global tablet shipments
reached 73.3 million in 2011, and are projected to grow 111% to 155
million units in 2012.
Shipments of white box tablets are likely to overtake shipments of nonmainstream brands, with grow rates far exceeding those of Apple and other
mainstream brands.
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Chap. 2.2
Growth drivers for white box tablets
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Comparison of shipments of white box tablets
and other convertible/mobile devices
Unit: m units
60
50
40
30
Industry structure
and players are
similar to the
white box tablet
sector
30
Low-end mobile
computing devices
that enjoyed a
sudden burst of
popularity
32.5
50.9
Mobile reader
devices with
similar sizes
and pricing
22.8
20
Explosive growth
surpasses that
of comparable
devices
10
0
White box
MP3/MP4
Netbook
(2009)
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e-readers (2011) White box tablets
(2012)
Growth for white box tablets
shooting up past the 30m barrier
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The explosive growth of the white box sector in 2012 begs the question: is this growth sustainable, or
will the market rapidly become mature?
Historical examples, such as white box MP3/MP4 players, netbooks and e-readers, suggest that
shipments tend to grow up to around 30 million units per year, before dropping back.
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According to processor suppliers for clone device makers, shipments of portable media players
(PMP), commonly known as MP3 or MP4 players, from clone device makers peaked at around 30
million units per year.
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If only players from the white box PMP sector were involved, the market should theoretically have
potential shipments of around 30 million.
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Just as netbooks took a slice of the notebook market with low prices and stripped down
functionality, white box tablets could take a chunk of the tablet market. However, the netbook
market failed to grow significantly after peaking at around 32.5 million units in 2009.
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E-readers are the most recent and most similar products to white box tablets in terms of size. They
also saw rapid growth during the 2007-2011 period, but never managed to pass the 30 million
milestone, and shipments are declining steeply to an estimated 10 million units in 2012.
White box tablet shipments are expected to soar from just 10 million units in 2011 to some 50.9 million
units in 2012. Other factors must therefore be at play for such massive growth to occur.
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Handset and tablet shipment ratio for iOS
and Android, 2011-2012
Unit: m units
Smartphone
2011
2012(e)
Official Android tablets
iPad
30:70
iPhone
iPad
33:67
iPhone
2011
Tablet
Smartphone
2012(e)
If more Android handset
users can be tempted to
buy Android tablets, there
will be a huge potential
market as yet untapped by
8:92 other brands, as there was
for iOS
Tablet
8:92
Smartphone
0
100
200
300
400
Note: Numbers in red indicate the ratio of smartphone and tablet shipments on the same platform for each
year
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500
Growth driver 1: Untapped demand in the market,
particularly the huge tablet demand from Android users
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The biggest driver in white box tablet growth comes from Android handset users, who create a huge
demand for tablets as yet unmet by brand vendors. Digitimes Research estimates that global shipments
of Android smartphones will hit 430 million units in 2012, representing an increase of 200 million on the
figure for 2011, and providing an enormous potential customer base for Android tablets.
Android users cover every sector from the high end to the low end, and are distributed across both
developed and emerging markets; moreover, brand tablet vendors have yet to meet demand from these
potential Android tablet markets.
The ratio of branded tablet shipments to smartphone shipments will be 3:7 for iOS in 2012, roughly on a
par with 2011, and 8:92 for Android. If more Android handset users could be tempted to buy Android
tablets, i.e. the tablet:handset shipment ratio could be increased, the potential market for Android
tablets would be far larger than current shipments of branded Android tablets.
Digitimes Research believes that branded tablets currently account for such a low proportion of overall
Android device shipments for two reasons:
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First, Android has always been more fragmented than iOS, making Android handset users less
inclined to buy tablets than iPhone users.
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Second, Android handsets are already available for less than US$100, while the cheapest Android
branded tablets still cost US$159 and US$199; some potential low-end tablet buyers are therefore
not yet catered for by brand vendors.
Google has launched Android 4.0, known as Ice Cream Sandwich or ICS for short, to reduce
fragmentation. Virtually all white box tablet AP vendors supported ICS in 2012.
Falling hardware costs mean that white box tablets can now be bought for as little as US$79, so white
box vendors can more directly target the low-end sector that accounts for such a large proportion of the
Android user base.
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Comparison of CPUs for mainstream white box and
branded tablets
RK2918
RK3066
A13
A10
Tegra 2
Tegra 3
Process
55nm
40nm
55nm
55nm
40nm
40nm
Core(s)
Cortex-A8
single core
Cortex-A9
dual core
Cortex-A8
single core
Cortex-A8
single core
Cortex-A9
dual core
Cortex-A9
quad core
Clock speed
1.2GHz
1.6GHz
1GHz
1.5GHz
1GHz
1.5GHz
Video
recorder
encoding
1080p
@30fps
1080p
@30fps
1080p
@30fps
1080p
@60fps
1080p
@30fps
1080p
@30fps
Video
playback
decoding
1080p
@30fps
1080p
@60fps
1080p
@30fps
1080p
@60fps
1080p
@30fps
1080p
@30fps
GC300
Mali400
Mali400
Mali400
GeForce
400MHz
GeForce
520MHz
1024x768
1920x1080
800x600
1920x1080
1680x1050
1920x1080
US$8
US$12
US$5
US$8
US$15
US$20
GPU
Resolution
support
2H12 list
price
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Growth driver 2: Improved CPU performance
helps China-based firms’ catch up with tier 1 vendors
•
•
•
The second contributing factor to the rise of white box tablets is the
improvement in the performance of APs from China-based suppliers, which
allows even low-end products to deliver acceptable levels of performance.
Among the more popular AP solutions for white box tablets in 2012 are the
entry level Allwinner A13 and Rockchip RK2918, and the higher end
Allwinner A10 and Rockchip RK3066.
White box tablet APs often compromise on some aspects of performance in
order to keep costs down, but are capable of matching solutions used in
branded tablet, such as the Tegra 2 or Tegra 3, in some areas.
•
Branded tablet AP solutions generally have better CPU performance. A
list of commonly used solutions in order of CPU performance would
read: Tegra 3, TK3066, Tegra 2, A10, A13 and RK2918.
•
However, The A10 actually has exceptional multimedia performance,
although the Tegra 3, RK3066 and Tegra 2 are not far behind.
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Factory gate price of entry level 7-inch white
box tablet
Unit: US$
50+
45-50
1Q12
2Q12
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40-45
<40
3Q12
4Q12(e)
Growth driver 3: Cost Factory gate prices for cheapest models falls to US$40
•
•
•
•
•
The third reason for the rapid growth of white box tablets is the rapid drop
in costs.
When Amazon launched the Kindle Fire at US$199 in late 2011, many in the
industry voiced concerns that the white box tablet market would suffer as a
result of price pressures from branded products. However, the reality has
been that white box tablets have been virtually unaffected by the Kindle
Fire.
According to white box vendors, the factory gate price of an entry level
white box tablet has fallen from US$50 in the first quarter of 2012 to just
US$40 by the fall, with retail prices dropping as low as US$79.
By fall 2012, the cheapest branded tablets, such as the revised firstgeneration Kindle Fire, were on sale for US$159, while the cheapest Nexus 7
model was available for US$199, in both cases more than double the price
of entry-level white box tablets.
This marked price difference enabled white box tablets to maintain very high
growth despite the threat from branded devices, with the situation in some
ways resembling the e-reader market in 2010 and 2011.
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US$40 white box tablet design solutions:
Low-end CPU, TN panel, G+P touch sensor
Touch panel total: US$15.6-18
•
7” TV panel (800x480): US$9.6-10
•
Supplier: BOE, Tianma, HannStar
•
Touch sensors (G+P or GG):
US$6-8
•
Suppliers: BYD, Truly
PCB total: US$14.4-19.2
•
Processor：US$5-12
•
Suppliers: Allwinner, Amlogic, Via, InfoTM
•
Memory: (4GB-8GB) US$1.8-3
•
Suppliers: Micron, SK Hynix
•
Power management IC: US$0.8-1
•
Suppliers: TI, Wolfson, Realtek
•
Other components on the PCB: US$7-9
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Total other costs: US$4-6
•
Casing: US$0.9-1.3
•
Battery (2600mAh): US$3-4
US$40 white box tablet design solutions:
Low-end CPU, TN panel, G+P touch sensor
•
•
•
•
•
•
•
•
•
•
•
Sources at Taiwan-based ODM/EMS firms indicate that factory gate prices for seven-inch branded tablets
remained at US120-130, well above the US$80-90 for white box tablets.
White box makers must choose different solutions from brand vendors to keep costs down.
Brand vendors mostly use wide viewing angle display technologies such as IPS, FFS or MVA; while white
box makers generally opt for TN panels, as well as imposing less stringent quality requirements, for
example by accepting B-stock components that would not be acceptable to brand vendors.
By fall 2012, seven-inch panels with a resolution of 800x480 cost just CNY60-62 (US$9.60-10.00).
G+P touch sensor solutions are used on low-end models to reduce costs. Such solutions involve bonding
a single sheet of plastic on a single sheet of glass, and generally cost US$6-8 per unit.
The PCB is another major contributor to costs, at CNY90-120 (US$14.40-19.20) depending on the
supplier.
The application processor (AP) is the most expensive component on the PCB. Mainstream solutions such
as the Allwinner A10 and A13, or the Rockchip RK2918 and RK3066, are listed at US$5-12.
Nvidia and TI APs generally have a list price of US$15-20.
Stiff competition and transparent pricing in the memory sector means that the difference in prices
between suppliers is minimal, with 4GB costing around US$1.80 and 8GB around US$3.
White box vendors can also economize on sensors, for example by using only linear accelerometers (G
sensors) and no gyroscopes; further savings can be achieved by including only a front-facing camera,
i.e. omitting the rear camera.
Adding the costs outlined above to the battery and the device casing gives a whole-unit shipment cost of
around US$40 for a white box tablet, and as low as US$35-40 for some manufacturers.
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Chap. 2.3
White box firms drive a transformation of the
entire tablet industry
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Global branded and “brand + white box” tablet
shipments and shipment share by OS, 2012
Unit: m units
iOS
Android
86.1
65.0
Unit: %
Windows
100%
3.6
80%
33.9
2.4
55.6
60%
35.2
40%
62.6
42.0
20%
3.7
0%
Brand
iOS
Android
Windows
Note: In the bar chart, figures on the left denote brand shipments,
figures on the right denote “brand + white box” shipments
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Brand + white
box
Factoring in white box tablets, Android already
surpassed iOS as the largest tablet platform in 2012
•
•
•
The majority of research bodies do not officially include white box tablets in their industry data, but
Digitimes Research believes that white box tablets are already too important to ignore in 2012, and are in
fact leading a transformation in the way both industry players and observers view the tablet market as a
whole.
Digitimes Research estimates that Android will account for 33.9% of branded tablet shipments in 2012,
equivalent to 35.2 million units.
•
iOS will still have a shipment share of 62.6%, representing a drop of just two percentage points on
2011, although other mainstream brands saw collective growth of 118% in the fourth quarter of
2012, turning the tide on Apple’s dominance.
Factoring in the white box sector, Android overtook iOS as the largest tablet platform in 2012 with a total
of 55.6% of tablets shipments.
•
When white box and branded tablet shipments are factored in, iOS’ shipment share falls to 42%, 21
percentage points lower than its share of branded tablet shipments.
•
Digitimes Research estimates that if Android can close the gap with iOS in terms of the ratio of
tablet to handset shipments, to a ratio of 2:8 (the figure for iOS is 2:7), the 2012 Android tablet
market would already exceed 100 million units.
•
Android tablet shipments including white box and branded models will soar to a total of 86.1 million
for 2012, giving a tablet to handset shipment ratio of 17:83.
•
Digitimes Research believes that white box tablets are currently replacing branded Android tablets at
the low end and in markets where brand vendors are relatively weak such as emerging countries,
cannibalizing some of the potential market for Android tablets.
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Shipment share of Android tablets,
by category 2011-2012
Official
Android
Amazon and
B&N
White
box
25%
34%
2011
Android
tablet shipments
reached 29.2m
units
44%
22%
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59%
2012
Android
tablet shipments
will reach 86.1m
units
16%
White box products account for 59% of
Android tablet shipments
•
•
•
•
Including the white box sector changes not only the picture for Android
tablet shipments and shipment share, but indeed the distribution of power
in the Android tablet sector as a whole.
Explosive growth in white box tablets means that official Android tablet
vendors like Samsung, Asus and Lenovo will only account for some 25%
Android tablets in 2012, a 19 percentage point drop on 2011.
E-book vendors like Amazon and B&N are also suffering as a result of the
rise of white box tablets, with their share of Android tablet shipments falling
from 22% in 2011 to 16% in 2012.
It is this situation that will spur Google to launch a US$99 tablet in 2013 to
fight back against white box tablets, after staging a comeback against
Amazon with the Nexus 7 in 2012.
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White box tablet shipments by size, 2012
10.x"
9.x"
8.x"
7.x"
3%
5%
10%
82%
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White box tablet shipments are concentrated on 7-inch
devices, with 8-inch devices also accounting for 10%
•
•
•
White box tablets are focused on the low end sector, which is reflected in
the fact that 7.x” models account for 82% of white box tablets.
8.0” tablets with a 4:3 aspect ratio are unique to the white box sector and
account for some 10% of white box tablets.
9” or larger displays involve higher panel and touch module costs, but white
box solution design firms also always raise the specification and cost of
other components in parallel to screen size, driving up overall unit costs and
prices; as a result this size category accounts for less than 10% of white box
tablets.
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Global shipments and shipment share for branded and
“brand + white box” tablets by size, 2012
Unit: m units
69.3
7.x”
8.x”
9.x”
10.x”
100%
62.8
60.3
>11
”
0.4
13.7
Unit: %
0.3
10.2
80%
40.6
60%
58.1
4.1
40%
27.6
15.8
14.2
6.4
1.3
0.4 0.4
20%
1.3
26.6
0%
Brand
7.x"
8.x"
9.x"
10.x" >11"
Note: In the bar chart, figures on the left denote brand shipments, figures on
the right denote “brand + white box” shipments
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44.8
Brand and
White box
Tablet shipments show that 7-inch models are likely to
overtake 9.x-inch as the mainstream size in 2012
•
•
•
The mainstream size for branded tablets has tipped from 9.x” in favor of
7.x” models in 2012 with the launch of the Kindle Fire, Nexus 7 and iPad
mini.
If the white box sector is included, 7.x” is already the category with the
greatest shipments in 2012.
Price and portability are increasingly the dominant factors in both the
branded and white box sectors of the tablet market, with the result that
tablets will be in ever closer competition with smartphones in the future.
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Share of global tablet shipments, 2012
Apple
Amazon
Microsoft +
B&N
Google
Samsung
Other tier 1
brands
White box
10%
8%
4%
5%
10%
32%
Total of
104m units
excluding
white box
43%
Total of
155m units
including
white box
63%
7%
5%
7%
3% 3%
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White box account for nearly one third of shipments,
tier-one brands excluding Apple account for 25%
•
•
•
The four major platform firms – Apple, Google, Amazon and Microsoft (chiefly because its investment in
Nook Media adds B&N shipments to its own totals) - will collectively account for 82% of the branded
tablet market in 2012.
When white box tablets are factored in, hardware brand vendors’ addressable market accounts for an
even smaller share of the overall tablet market at just 12%.
Even major brands like Apple, Microsoft and Amazon are struggling to check the rise of white box
tablets, with shipments already second only to those of Apple.
•
Apple is focused on models with high margins and is unlikely to go head on against white box
vendors.
•
The primary appeal of Microsoft’s Surface is its PC-like document creation features, and it is unlikely
to move into the low-price or small-size sectors, not least because it must also maintain the
profitability of Windows and Office.
•
Even if Microsoft actually launches the rumoured Xbox Surface games tablet, its performance,
positioning and price would all be a far cry from those of white box tablets.
•
Amazon is focused on low-priced products, but is limited to the European and North American
markets due to the limitations of its channel, content and app ecosystems; it will therefore have
only a minimal direct impact on white box tablets.
•
Of the four major platform firms, Google poses the biggest potential threat to the future of the
white box sector.
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Chap. 2.4
New forces in the industry created by the rise
of white box tablets
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Global shipments of tablet APs, 2012
Unit: m units
70
Branded tablet AP
vendors
White box tablet AP
vendors
60
50
40
30
20
10
0
2012(e)
Apple
Allwinne
r
TI
NV
65.0
20.8
19.1
13.4
Rockchip Amlogic
12.6
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5.7
Via
InfoTM
4.1
3.7
Samsun Qualcom MediaTe
g
m
k
3.6
0.8
0.8
Intel
Other
0.7
4.4
White box solution vendors account for 2 of the
top 5 global tablet processor firms
•
•
•
The rise of white box tablets has turned the relevant China-based companies into new forces in the
market, the most important of which are processor (AP) and solution design vendors (design houses).
Digitimes Research’s calculations of branded and white box tablets by AP vendor reveal that Allwinner and
Rockchip will both move into the top five, with Allwinner in particular already close to one third of Apple’s
shipments.
•
These calculations are for the shipments of tablets made using different brands of AP, rather than
actual AP shipments.
For tier-one AP vendors like TI, Nvidia, Samsung and Qualcomm, white box tablet AP vendors are a very
damaging force at the low end of the market.
•
In the past, netbooks failed to make further inroads in terms of replacing conventional notebooks
once netbook shipments reached 32.5 million, partly because Intel was unwilling to allow its own lowend products to erode the market for its midrange and high-end products.
•
However, as white box AP vendors continue to improve the performance of their tablet chips, they will
catch up with and threaten the position of tier-one AP vendors.
•
Google and Amazon will continue to fight on price, while hardware brand vendors will become more
willing to consider using cheaper AP solutions.
•
Lenovo’s key S2107 tablet launched in the second half of 2012 already uses a MediaTek solution,
while Asus has previously researched the use of Via solutions; tier-one brands are therefore likely to
make increasing use of the types of AP solution that are currently favoured by white box tablet
vendors, at least in low-end models.
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Tablet shipments for global brands and China-based
solution vendors, 2012
Unit: m units
60
Brands
50
Solution vendors mainly using
Allwinner chips
40
Solutions vendor mainly using
Rockchip chips
30
20
10
0
Apple
2012(e)
65.0
Amazo Samsu
Pingwa
Google
Asus
n
ng
ng
10.8
7.2
4.9
3.2
2.7
Tianqi
2.6
Microso
B&N
ft
2.5
Source: Digitimes Research , November 2012
16
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2.5
Topwis
Hetianc
Sochip Lenovo
UVChip
e
huang
2.4
2.3
2.1
2.1
2.0
Acer
Chih
e-Shine Other
Tien
1.5
1.4
1.3
36.0
Numerous white box tablet makers collectively constitute
a major force, while shipments for major solution
vendors may surpass tier 1 brands
•
•
•
•
Some solution design firms (design houses) closely resemble ODMs, but are
more flexible and able to directly ship PCBs to downstream assembly firms,
as well as shipping whole units to brand vendors or channel companies that
wish to affix their own brand; some also have experience of running their
own brands.
While solution vendors and brand companies have significantly different
implications for downstream sectors of the industrial chain, given that their
shipments reflect their individual impact on upstream procurement for items
such as memory or Wi-Fi modules, it is still possible to compare the
differences in the size of shipments.
Digitimes Research calculates that the major white box tablet solution
vendors such as Pingwang, Tianqi, Hetianchuang, UVChip, Sochip and eShine will soon be on a broadly similar level to those of tier-one brand
vendors.
Pingwang’s shipments may even exceed those of all tier-one hardware brand
vendors except Samsung.
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Tablet shipments for Taiwan-based ODM/EMS firms
and China-based solution vendors, 2012
Unit: m units
70
60
Taiwan ODM/EMS
50
Solution vendors mainly using
Allwinner chips
40
Solution vendors mainly using
Rockchip chips
30
20
10
0
2012(e)
Foxcon
Pegatro Pingwa
Hetianc
Quanta
Tianqi Topwise Sochip
Uvchip Compal Wistron
n
n
ng
huang
64.6
14.6
8.3
3.2
2.6
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2.4
2.3
2.1
2.0
1.6
1.5
Chih
Tien
e-Shine
Invente
c
1.4
1.3
0.4
Factoring in whole-unit and design solutions, only the
top 3 Taiwan-based ODM/EMS firms have greater
shipments than solution vendors
•
•
If China-based solution vendors are compared with Taiwan-based ODM/EMS
firms in the same way, we find that only Foxconn, Quanta and Pegatron
have greater shipments than the major China-based white box tablet
solution vendors.
As cost pressures on brand companies increase, brands may be more willing
to use white box AP solutions, with the result that China-based solution
vendors are likely to take a significant number of brand clients away from
Taiwan-based ODM/EMS firms.
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Chap. 3
Trends for the major global tablet vendors
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Overview
•
The big four platform companies will continue to dominate the global tablet
industry in 2013, as the war between the various platforms heats up further.
The differences in business model between Apple, Google, Amazon and
Microsoft will be of decisive importance in determining their relative strengths
and weaknesses in this battle.
•
The latest products announced by the big four during September and October
2012 show that Apple is unwilling to reduce its margins by giving the iPad
mini a lower price, giving competitors an opportunity to exploit. Google is
pricing its products aggressively and has the least vulnerable business model.
Microsoft’s business model and the positioning of the Surface product itself
will constrain it primarily to the midrange/high-end and large-size sectors;
moreover, the existence of Google will force it to follow a similar route of
close hardware/software integration to that of Apple. Amazon’s margins are
likely to be squeezed even further as the price war with Google intensifies.
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Chap. 3.1
Platform war in the tablet industry
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Four key aspects of the platform war:
Platform size, ecosystem, cohesion, profitability
２
1
Expanding platform
size
Product services
(revenue sources):
1. End hardware
2. OS
3. Software & apps
4. Digital content
5. Cloud services
6. Advertising
7. Online and mobile
payments
Attracting
ecosystem
members
Making
profit
Creating
cohesion
４
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３
Ecosystem members:
1. OEM partners
2. Software & app
developers
3. Digital content
firms
4. Advertising
agencies
5. Sellers
Form of cohesion
1. User interface
2. Popular
software/apps
3. Digital content
4. Cloud storage,
synchronization
5. Other…
Four key aspects of the platform war:
Platform size, ecosystem, cohesion,
profitability
•
The tablet industry will see an intensifying platform war between Apple,
Google, Amazon and Microsoft in 2013.
•
The real battleground will be over the ability to use various kinds of free, or
at least cheap, products and services to tempt users to buy in, and thereby to
build ecosystems, increase cohesion and find ways to deliver channel profits.
•
To put it simply, the differences in strategy between Apple, Google and
Amazon stem from their choices in terms of retaining or abandoning various
sources of revenue, including hardware, OS, software and apps, digital
content, cloud services, and advertising.
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Four major mobile device
platform firms’ presence
7
6
5
Importance
of profitability
4
3
Apple
2
Google
Amazon
1
Microsoft
0
Business territory
(revenue source)
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The four main tablet platform firms are
disrupting each others’ efforts
•
The battle between the platform companies essentially involves doing everything
possible to expand market share, keep up margins in each company’s original area of
business, and damage competitors’ profitability in their main area of business.
•
Apple and Microsoft rely on both hardware and software for profits, making them
easier targets.
•
Despite Amazon’s status as the undisputed king of the online retail sector, its activities
in the mobile market are still at an early stage of development and it relies on the
Kindle Fire as its hardware platform; the profitability of its mobile business as a whole
is therefore vulnerable to changes in mobile device margin rates.
•
Apple, Microsoft and Amazon have consistently failed to make major breakthroughs in
the mobile advertising sector, giving Google a unchallenged position in this area, and
as a result, the most robust business model.
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The 4 main platform firms each face different growth
obstacles and bottom lines
Growth obstacles:
•
High prices
Bottom lines:
•
30% margins
•
•
Brand vendors’
competitiveness
No foundation in
the tablet market
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•
•
•
Ecosystem still weak
Brand vendors’ support
Margins for the
surface are lower
than Windows
licensing costs
•
•
•
Ecosystem still weak
Limited to the North
American and
European markets
Overall profits for
the Kindle
The 4 main platform firms each face different
growth obstacles and bottom lines
•
The starting point of each platform company’s business model makes it easy to
see where the major obstacles to growth and the bottom line for each firm are.
•
One key aspect of competition for each of the big four is to eliminate its own
growth obstacles; by increasing market share, each can hope to force the
competition closer to their bottom line, reducing their willingness to remain in
the market.
•
Current trends show that Google has the greatest chance of pushing Apple,
Microsoft and Amazon down to their bottom line.
•
While Google has launched its own Nexus range of tablets, its share of Android
devices as a whole is very low; even if it were to step up the price war by
selling hardware at a loss, the impact on the profitability of its Android
business as a whole would still be minimal, putting in the most unassailable
position of the four platform companies.
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Chap. 3.2
Apple
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Apple product roadmap acceleration, 2013
2010
Device
launch
AP launch
OS launch
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2011
2012
2013
5th iPad,
6th iPad?
A7, A7X
A8…?
With 2 new iPad models and 3 new processors
launched in one year, does Apple intend to increase
the pace of product updates
•
Apple launched two new iPad models in 2012, with the fourth generation
iPad and the iPad mini both launched in the second half of the year. As a
result, many media observers now expect Apple to launch more than one
new iPad in 2013, or even to move towards offering a new strategy with a
wider range of models on sale at any one time.
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Apple processor development
Name
A4
A4
A5
A5
A5
A5X
A6
A6X
APL0398
APL0398
APL0498
APL0498
APL2498
APL5498
APL0598
NA
iPad
iPhone 4
iPad 2
iPhone 4S
iPad 2
(US$399)
New iPad
iPhone 5
4th iPad
1024x768
960x640
1024x768
960x640
1024x768
2048x1536
1136x640
2048x1536
Mar’10
Jun’10
Mar’11
Oct’11
Mar’12
Mar’12
Sep’12
Oct’12
Cortex-A8
Cortex-A8
Cortex-A9
Cortex-A9
Cortex-A9
Cortex-A9
Cortex-A15
Cortex-A15
Clock speed
1GHz
800MHz
1GHz
800MHz
1GHz
1GHz
1.3GHz
1.5GHz
Process
45nm
45nm
45nm
45nm
32nm
45nm
32nm
32nm
Area (mm2)
53.3
53.3
122.2
122.2
69.6
165
96.7
110-115
GPU
PVR
SGX535
200MHz
PVR
SGX535
200MHz
PVR
SGX543M
P2
200MHz
PVR
SGX543MP
2
200MHz
PVR
SGX543MP
2
200MHz
PVR SGX543
MP4
200MHz
PVR
SGX543
MP3
266MHz
PVR SGX543
MP4
500MHz
Memory
Dualchannel
200MHz
LPDDR
3.2GB/s
Dualchannel
200MHz
LPDDR
3.2GB/s
Dualchannel
400MHx
LPDDR2
6.4GB/s
Dualchannel
400MHx
LPDDR2
6.4GB/s
Dualchannel
400MHx
LPDDR2
6.4GB/s
4 channel
400MHz
LPDDR2
12.8GB/s
Dualchannel
533MHz
LPDDR2
>12.8GB/s
4 channel
533MHz
LPDDR2
-17GB/s
Model no.
Product
Device
resolution
Launch date
Core(s)
１
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2
Apple has yet to increase the pace of processor
updates, and is expected to launch the A7 rather
than the A8 in 2013
•
Apple has in the past launched updated processors at the same time as new products.
This means that the pace at which the company updates its processors can be used to
infer its roadmap for new product launches.
•
Digitimes Research believes that even though Apple has launched three new
processors in 2012 – the A5X, A6 and A6 – the A5X and A6X only consist of minor
revisions to the A5 and A6 respectively.
•
Processor updates depend on changes to the core architecture, and rather than
speeding up the pace of core architecture changes from the A5 to the A6, Apple has
in fact slowed down.
•
The company is therefore projected to launch only A7 and A7X models in 2013, with
the A8 unlikely to appear before the end of 2013. For the same reason, Apple is
unlikely to launch new iPad models at different price points in the same year; in other
words, it will not launch both fifth and sixth generation iPads, or both second and
third generation iPad mini models, in 2013.
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Apple may launch a 4th iPad line in 2013
2011
2012
2013
AP launch
A7
US$229
A7X
iPad mini
US$329
iPad mini
2
Retina
mini
1
4th iPad
iPad launch
iPad 2
US$399
US$499
iPad 2
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New iPad
4th iPad
5th iPad
Apple may launch a 4th iPad line in 2013
•
However, Apple may continue the strategy first seen with the iPad 2
by continuing to sell the fourth generation iPad line at a price of
US$399 while launching a fifth generation iPad.
•
Apple may also keep the first generation iPad mini on sale at a
reduced price when it launches the second generation iPad mini.
•
Digitimes Research believes that Apple is highly likely to use “Retina”
displays in the second generation iPad mini, in which case the price of
the first generation iPad mini would likely be reduced to US$229.
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iPhone sales and growth estimates, 4Q10-4Q12
Unit: m units
50
40
30
20
10
0
4Q10
2Q11
4Q11
2Q12
4Q12(f)
Sales
16.2
18.6
20.3
17.1
37.0
35.1
26.0
24.0
40.5
Q/Q
15%
15%
9%
16%
117%
-5%
26%
-8%
69%
Y/Y
86%
113%
142%
21%
128%
88%
28%
41%
9%
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Seasonal variations in iPad sales during 2013 are likely
to resemble patterns in iPhone sales during 2012
•
Apple’s decision to launch a new iPad model in October 2012 changes the
seasonal pattern originally expected for iPad launches in 2013.
•
When Apple moved the iPhone launch date from June to October in 2011, it
effectively adjusted the seasonal distribution of iPhone sales such that fourthquarter sales were the highest, with sales subsequently dropping off with each
successive quarter of the new year.
•
If the next iPad is indeed launched in October 2013, the seasonal distribution
of iPad sales is likely to resemble the pattern for iPhone sales in 2012.
•
If Apple launches the next generation iPad in June or July of 2013, the
seasonal contraction in the first quarter will increase, while sales in the third
and fourth quarter will remain flat, giving whole-year sales a seasonal
distribution that more closely resembles that of the iPod.
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iPad sales and growth rate estimates, 4Q10-4Q12
Unit: m units
30
25
20
15
10
5
0
4Q11
2Q12
4Q12(f)
2Q13(f)
4Q13(f)
Sales
15.4
11.8
17.0
14.0
20.0
18.0
15.0
Q/Q
39%
-24%
44%
-18%
43%
-10%
-17%
-7%
79%
Y/Y
111%
152%
84%
26%
30%
53%
-12%
-2%
25%
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14.0
25.0
Sales of the whole iPad range are forecast to hit
75m units in 2013, with shipments reaching 80m
•
Digitimes Research projects that total sales of all iPad models will hit
75 million in 2013 if the new model is launched in October, equivalent
to 19% growth on the 2012 forecast of 63 million, while shipments
will hit 80 million.
•
If demand is stronger than expected and continues until the first
quarter of 2013, whole-year sales of the entire iPad range may bit 8085 million units in 2013, with shipments going as high as 90 million.
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iPad quarterly shipments, 2012
Unit: m units
iPad 2
New iPad
25
20
6
10
15
10
5
6
7
10
11
10
8
2
5
4
4
4
2Q12
3Q12(e)
4Q12(f)
1Q13(f)
0
1Q12
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iPad mini’s
share of
shipments
increases
iPad mini shipments could reach 40m in 2013
•
Information obtained by Digitimes Research suggests that the iPad
mini will account for an increasing share of all iPad shipments with
each passing quarter, and will already account for nearly half of all
iPad shipments in the first quarter of 2013.
•
If iPad shipments reach 80 million units in 2013, iPad mini shipments
will be around 40 million units.
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Chap. 3.3
Google
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Monthly shipment estimates for the Nexus 7, 2H12
k units
July estimates
1,000
Shipment figures
revised upwards
800
600
400
200
0
Jul'12
Aug'12
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Sep'12
Oct'12(e)
Nov'12(e)
Dec'12(f)
Market response to the Nexus 7 is better than
expected, 2012 shipments expected to top 4.3m
•
Following the lacklustre market performance of Android tablets in 2011, Google decided to
launch the Nexus 7 in conjunction with Asus.
•
Unlike earlier Nexus-branded handsets, Google positioned the new tablet with a breakthrough
price and was more aggressive about increasing shipments.
•
Digitimes Research originally projected that Nexus 7 shipments would begin to tail off in the
fourth quarter of 2012, but, aided by delays to the commencement of iPad mini shipments,
Nexus 7 shipments actually grew in the fourth quarter, while whole-year shipments are likely
to hit 4.3 million units.
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Success of the Nexus 7 drives
Google to launch the Nexus 10
Galaxy Tab 2 10.1
10.1”
1280x800
US$399US$349
•
•
New display panels and
processors
As Apple reduces its use of
Samsung components, the
Nexus 10 becomes an
important new shipment
outlet for Samsung’s highresolution panels
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4th iPad
9.7”
2048x1536
From US$499
Nexus 10
10.1”
2560x1600
From US$399
iPad 2
9.7”
1024x768
US$399
Threatens the
iPad
Success of the Nexus 7 drives Google
to launch the Nexus 10
•
Spurred on by the success of its strategy for the Nexus 7, Google has set its sights on Apple and
launched the high-value, high-performance Nexus 10 tablet to challenge the iPad, hitting not just the
position of the fourth generation iPad, but also the US$399 iPad 2.
•
Apple’s ability to maintain its US$399 9.7-inch product line is now threatened by the launch of the
Nexus 10, as well as by cannibalization of sales by the iPad mini.
•
iSuppli estimates that the increased display resolution on the new iPad results in an increase of around
US$30 in display panel costs compared to the iPad 2. Digitimes Research believes that the different in
display panels costs between the Nexus 10 and the Samsung Galaxy Tab 2 10.1 is also in the same
range.
•
However, as Samsung uses its own in-house display panels, the knock-on effect on final device prices
can be kept to a minimum, with the result that the price difference between the Google Nexus 10 and
the Samsung Galaxy Tab 2 10.1 is just US$50.
•
Just as Apple is striving to eliminate Samsung from its supply chain, Samsung is collaborating with
Google on the Nexus 10, making Samsung more competitive with Apple in terms of final devices, as
well as providing it with a new outlet for its high-resolution display panels.
•
The aggressive pricing of the Nexus 10 makes it even more likely that Google will launch a low-price
seven-inch tablet in summer 2013, while supply chain rumours make it likely that the device will be
priced at just US$99.
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Global tablet share and Google’s
strategic targets, 2012
■ Google
1
2
■ Other tier 1 brands
■ Amazon+B&N
Primary targets:
Amazon+B&N
1. Limited resources
2. Closest to
withdrawing from
the market
Secondary target: 43%
Apple
1. Major enemy
brand
2. Can more easily
use low-priced
products to
attack
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9%
■ Apple
■ White box
□ Microsoft
3%
12%
3
Tertiary target:
White box tablets
1. Affect sales of
official Android
tablets
32%2. Precise targets of
attack less clear
1%
Google will take on Apple, Amazon, B&N and
white box tablet vendors in 2013
•
Looking at the performance of Android tablets as a whole during 2012, the Nexus 7 has seen
considerable success, but competing products from Apple, Amazon, B&N and the white box vendors
still account for a very large share of the market.
•
Digitimes Research believes that Google will launch an all-out effort to take on all these competitors
in 2013.
•
Amazon and B&N have both experienced a major deterioration in their financial situation following
their entry into the tablet market. Should the losses from their tablet businesses rise to the point that
they can no longer be offset by their content businesses, they will be forced to exit the tablet market
and abandon their modified Android platforms in favor of a cross-platform digital content strategy.
•
Google’s number one priority is to force Amazon and B&N out of the market, and as both are already
not far from their bottom line, they are vulnerable to attack.
•
Apple’s high price positioning also makes it vulnerable to products like the Nexus 10. Apple is also the
biggest competitor for Google’s hardware partners, making it Google’s second most important target.
•
White box tablets affect sales of official Android products and must also be stopped from Google’s
point of view; however, the lack of a clear, single target means that this threat is a lower priority for
Google that those mentioned above.
•
Microsoft’s lack of support from OEM partners means that it is the least significant competitor for
Google.
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Google will expand the Nexus tablet range
Price
Specs
•
US$399
•
•
•
•
US$199-249
•
Nexus 7
2nd generation
•
Nexus 7
Budget
version
•
US$99-129
•
•
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10.1”
2560x1600
Exynos chip
7”
1920x1200
Thinner and
lighter, or
featuring higher
resolutions
7”
10240x600
Likely to use tier
2 AP
Components
from firms based
in China of
Taiwan
Partners
Samsung
Unclear.
Samsung Asus
and Lenovo are
all potential
partners
Unclear.
Samsung Asus
and Lenovo are
all potential
partners
Shipment
forecast
2-4m
5-8m
8-12m
Google will expand the Nexus tablet range, total
shipments have the potential to reach 19m units in 2013
•
Given this strategy of attack on all fronts, Google is expected to further expand the
Nexus tablet range in 2013, adding an even cheaper seven-inch model to the range, as
well as producing second generation Nexus 10 and Nexus 7 models.
•
Digitimes Research projects that Google’s whole-year shipments of the entire Nexus
range in 2013 will be in the 15-24 million-unit range; given steady, health growth,
shipments would be around 19 million units.
•
Shipments of individual mainstream 10-inch Android tablet models priced from US$399
were of the order of 150,000 per month in 2012.
•
Google shipped around 4.3 million Nexus 7 tablets in the second half of 2012, and could
see growth of 25-100% for a second generation model in the same price bracket.
Shipments of the rumoured ultra-budget model could reach two to three times the level
of the Nexus 7, giving shipments of 1.3-2.0 million.
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Share of Android tablet shipments for Google and other
official Android tablet vendors, 2012
Google
Other official Android
tablets
20%
Official Android
tablet shipments
of 21.9m units in
2012
80%
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50%
Official Android
tablet shipments
of 37.7m units in
2013
50%
Ability to compete on level playing field with Google is
key to success for hardware brands other than Apple
•
Digitimes Research projects that the Nexus 7 will account for 20% of all official Android
tablets in 2012.
•
Bolstered by the Nexus 7, Asus’ will ship a total of 7.0 million tablets in 2012, putting it
nearly 5.0 million units ahead of Lenovo.
•
In effect, Google is directly determining which brand vendors will come out winners in
the tablet market, although this control of course does not extend to Apple.
•
If the Nexus range is not included in calculations, Digitimes Research projects that
branded Android tablet shipments will total 17.6 million in 2012, rising just 6% in 2013
to 18.7 million.
•
Total shipments of 19 million for the whole Nexus range in 2013 will double the size of
the potential market for tablet brands other than Apple to 37.7 million units, with the
result that whichever brands land the opportunity to collaborate on Google two
forthcoming seven-inch models will be the winners in 2013.
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Chap. 3.4
Microsoft
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Quarterly revenues for Microsoft divisions corresponding
to Windows and Office, 2009-2012
Unit: US$m
Windows & Windows Live Division
8,000
Microsoft Business Division
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1Q09
3Q09
1Q10
1
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3Q10
1Q11
3Q11
1Q12
3Q12
Effects of PC industry decline - Growth in Office slows,
while Windows undergoes a Q/Q contraction
•
Since the launch of the iPad, the PC market has gone from growth
into decline. Digitimes Research projects that notebook shipments
will contract 4.3% on 2011 levels.
•
As a result, revenues from Microsoft’s Business Division, which is
focused on Office and accounts for around one third of the
company’s total revenues, have seen limited growth since 2010.
•
The Windows & Windows Live Division, which accounts for 25-30%
of company revenues, has seen revenues contract for five successive
quarters, with its share of all company revenues slipping to 20% in
the third quarter of 2012.
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Microsoft’s Surface shipment targets (as provided
by the upstream supply chain), 2012-2013
Unit: m units
8-12
3-5
2012
2
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2013
Microsoft fights back in the tablet market with the
Surface, sets 2013 shipment targets of around 10m
•
Faced with PC vendors’ seeming inability to fight back against Apple in the tablet
sector, Microsoft finally entered the mobile device market itself on October 24, 2012,
when the Surface tablet was officially launched.
•
Information obtained by Digitimes Research shows that Microsoft ordered the
equivalent of shipments of three to five million Surface tablets from the supply chain in
2012, and has set a 2013 shipment target of 8.0 million units.
•
However, the supply chain is concerned that the market will not necessarily accept the
Surface, and shipment forecasts for the surface are therefore generally conservative.
•
Digitimes Research projects that Surface shipments will reach 2.5 million in 2012,
rising to 8.0 million in 2013.
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Surface pricing strategy analysis
9.7” iPad
US$499, 16GB
US$599, 32GB
• 16GB storage space
common at the
US$499 price point
• Keyboards common at
the US$599 price point
Transformer TF300
US$399, 32GB
US$499, 64GB
Surface RT version
US$499, 32GB
US$599, 32GB+Touch Cover
US$699, 64GB+Touch Cover
3
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A price difference of
US$100 leaves OEM
partners sufficient
margins after hardware
costs to pay Microsoft’s
licensing fees for
Windows RT and Office
The RT version of the Surface is priced from
US$499, making it competitive and profitable
•
The main factor in the supply chain’s pessimistic view of Surface sales is concerns over its
high price.
•
Microsoft announced prices of the RT version of the Surface some time ago, with the 32Gb
version selling for US$499 or $599 with the Touch Cover keyboard cover.
•
Digitimes Research believes that the pricing of the Surface RT is appropriate; it is
comparable to the 32GB version of the 9.7-inch iPad, and with the Touch Cover it is well
positioned to exploit the functionality of Office.
•
10.1-inch Android tablets from Microsoft’s Windows tablet OEM partners are priced around
US$100 cheaper, leaving OEMs ample room to pay licensing fees for Windows RT and
Office, while still covering product costs and retaining profit margins.
•
While the price of the Surface may be attractive, its operating system is untested and its
app ecosystem is inadequate; companies in the supply chain are therefore still concerned
about its acceptability to consumers.
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Forecast of global shipments of mobile
computing devices, 2007-2015
500
Unit: m units
400
300
200
100
0
Tablets (excluding Surface)
Surface
Notebooks
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
0
104
0
0
138
0
0
165
20
0
198
63
0
203
102
3
194
132
8
192
160
15
196
190
20
200
Note: Tablet shipments do not include white box tablets.
4
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Will Surface growth come from replacing
notebooks or tablets?
•
Microsoft has positioned the Surface as an innovative product that
caters for demand from both the notebook and tablet sectors of the
mobile computing device market.
•
It is difficult to project growth for the Surface before the market has
had time to determine its success.
•
However, analysis shows that the main growth driver for the Surface
will come from replacing notebook or tablets, which is still helpful to
any effort to determine the Surface’s market potential.
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Competing ecosystems could make it difficult for
the Surface RT to move into the tablet market
Obstacles to entry come
from the software/app
ecosystem
Traditional PC software
ecosystem
Mutually
complementary
Notebook
market
App ecosystems
(Apple, Google)
Replacement,
obstacle to
entry
RT
version
X86 version
Strength of Microsoft’s
shipments (attack)
★←
5
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→★★★★★
Tablet
market
Competing ecosystems could make it difficult for
the Surface RT to move into the tablet market
•
There will be both Windows RT and x86 (Windows 8 Pro) versions of the Surface.
•
User ratings of the hardware design are positive, with the performance of the Kick Stand,
Touch Cover and Office coming in for particular praise.
•
Despite some continuing shortcomings when used away from the desktop environment, the
Surface has the potential to cater for notebook users at least to some extent, for example by
using it resting on the lap.
•
The x86 version of the Surface will be compatible with Windows PC software, making it more
suitable as a replacement for a notebook.
•
Nevertheless, Microsoft’s hopes for the tablet market rest mainly on the RT version, but the
weakness of its ecosystem compared to the enormous ecosystems already built by Apple and
Google may hinder the Surface’s move into this market.
•
The Surface is therefore inherently well placed to replace notebooks, but less well positioned
to replace tablets. Replacing notebooks with the Surface is nevertheless still beneficial to
Microsoft, and so the company is focusing on the RT version in terms of shipments.
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Surface tablets will not find it easy to
move into the small tablet sector
Quarterly tablet shipments by size, 2012
7.x"
8.x"
9.x"
10.x"
Unit: m units
11.x"
Move in
Compete
0.7
6.1
0.3
2.7
1.2
1.6
13.1
15.1
17.0
Surface devices will
struggle to compete in
the small tablet sector
15.2
15.6
4.4
2.7
1Q12
2Q12
5.2
3Q12(e) 4Q12(f)
6
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Smaller devices are
already the main
source of growth for
tablets
9.7” iPad shipments
will fall, but this is
mainly due to the
launch of the iPad mini
Apple has already moved into
the small tablet sector
Surface tablets will not find it easy to
move into the small tablet sector
•
The tablet market reached a turning point in the second half of 2012, with
smaller models becoming the key growth drivers for the future of the market.
•
The Surface is targeted squarely at the market for larger tablets and the iPad
in particular, however, Apple has already moved into the small tablet sector
with the launch of the iPad mini.
•
The Surface is not well suited to a move into the small size sector, which
makes it uncompetitive in some respects.
•
The ability to create Office documents are the major selling point for the
Surface, which limits its positioning to the large size sector.
•
Windows RT and Office take up a considerable amount of storage space,
making it difficult for Microsoft to launch 8GB or 16GB entry level models.
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Various Microsoft divisions are adapting to the
imminent crisis with different strategies
7
Holding on to
the business
market
Importance of profitability
(influence of division)
6
5
4
3
Free Xbox Music streaming
will help to sell Windows
Crossplatform
Office
Surface, Office
bundled with
Windows, WP
Skype, MSN and other services
increase cohesion for Windows
Cross-platform
Xbox content
Nook HD
tests the water
Office 360
provided on a feepaying basis
Nook Video
tests the water
2
Bing continues to
take on Google
1
0
Device
OS
Entertainment
& Device
Windows &
Windows Live
Software, App
Microsoft
Business
Server & Tools
9
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Content
Entertainment
& Device
Cloud Service
Ad
Online Services
Microsoft
Business
Windows &
Windows Live
Various Microsoft divisions are adapting to the
imminent crisis with different strategies
•
However, internal strife at the company poses a challenge to Steve Ballmer’s leadership
and adds another variable to the firm’s ability to carry out a smooth transition, just at the
moment that Windows 8 is launched and Microsoft formally moves into the mobile sector.
•
Digitimes Research believes that the main issue for Microsoft’s management is that the
relationship between the Windows, Office and other software and service departments
has already changed.
•
At such a time as the platform is no longer capable of delivering growth, or even of
ensuring the future of Microsoft’s software and content departments, should these
departments move closer to Windows to compete with iOS and Android, or should they
move away from Windows and towards a cross-platform strategy?
•
Digitimes Research believes that with the revenue share of the Windows & Windows Live
division falling to just 20%, the importance and influence of the division within the
company will fall, while voices calling for a cross-platform transition for software and
content will carry greater weight in the future.
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Chap. 3.5
Amazon
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Amazon’s Kindle Fire product line
Model
Fire
Fire HD
Fire HD 8.9”
Fire HD 8.9” 4G
Screen size
7”
7”
8.9”
8.9”
Resolution
1024x600
1280x800
1920x1200
1920x1200
Processor
OMAP 4430
Storage
capacity
8GB
16GB
32GB
16GB
32GB
32GB
64GB
Price (US$)
159
199
249
299
369
499
599
1
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Amazon’s Kindle Fire product line
becomes more comprehensive
•
Amazon launched its new Kindle Fire range on September 6, 2012,
consisting of three models with differing screen resolutions priced from
US$159 to US$599.
•
The Kindle Fire HD, codenamed Tate, is being built by Quanta.
•
The Kindle Fire HD 8.9”, codenamed Jem, is being built by Foxconn.
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Kindle shipments, 2008-2012
e-readers
Tablets
Unit: m units
3.5
10.8
17.0
6.9
0.5
2008
5.3
2.4
2009
1
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2010
2011
2012(e)
Shipments of Kindle devices fall
to 16.1m in 2012
•
While Kind Fire shipments in 2012 have seen major growth on 2011
levels, overall Kindle shipments – including both tablets and e-readers –
are actually lower than 2011 at around 16.1 million units.
•
Digitimes Research believes that Amazon’s edge in terms of digital
content, online sales and other member services is still restricted largely
to the European and North American markets, while the company’s
closed-platform strategy will similarly impede the regional expansion of
the Kindle Fire.
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Deriving Kindle Fire gross profits
250
Unit: US$
200
150
140
100
50
37
199
50
59
0
8
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35
29
23
82
Each Kindle Fire creates US$286 of
revenue with a margin rate of 28.7%
•
As previously noted by Digitimes Research, the first-generation
Kindle Fire delivered revenues of US$286 per unit with a profit
margin rate of 28.7%.
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Amazon’s Kindle Fire margin rates
120
Unit: US$
100
80
60
99
120
37
35
40
20
29
50
-21
2
0
23
-20
-40
Kindle Fire Kindle Fire Kindle Fire e-reader
sales
costs
margins revenues
9
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Mobile
payment
revenues
e-reader
Mobile Kindle Fire Total gross
profit
payment derivative
profits
sharing sales costs profits
Amazon Kindle Fire margin rates
•
However, the potential launch of Google’s US$99 Nexus tablet would give Amazon
a difficult choice as to whether it should continue to participate in the price war.
•
Taiwan-based ODMs minimum shipment price for seven-inch tablets is still US$120,
which would leave Amazon with a final margin rate of little more than 1% if it also
sold a Kindle Fire model for US$99.
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Kindle Fire margin rates would still be 14.8% if it was
sold for a price slightly higher than hardware costs
Unit: US$
140
120
100
80
60
40
20
0
129
37
120
50
9
10
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35
29
23
32
Kindle Fire margin rates would still be 14.8% if it was
sold for a price slightly higher than hardware costs
•
Amazon could keep margin rates about 15% if it abandoned the price war
and sold the Kindle Fire at price higher than the cost of the hardware, but
such a move would be a significant obstacle to the firm’s ability to expand
Kind Fire sales.
•
Regardless of whether Amazon moves to keep up with the US$99 price
point if Google launches such a device, it will no longer be beneficial for
the company to maintain its own hardware brand, making it likely that the
company will move further towards a cross-platform strategy.
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Chap. 4
2013 global tablet industry forecast
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Overview
•
In summary, analysis of the major platform companies and white box
tablet makers leads Digitimes Research to project that 2013 will see
global tablet shipments grow 38.3% year on year to 210 million units,
overtaking notebook shipments for the first time; even if only
branded tablets are factored in, tablet shipments will still reach 144
•
million units in 2013.
Digitimes Research also forecasts that total global tablet shipments
will reach 318 million by 2015, with branded tablets accounting for
220 million units and white box tablets accounting for as much as 100
million units.
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Chap. 4.1
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Global tablet shipments
(Including white box), 2010-2015
Unit: m units
318.0
268.5
214.0
154.8
73.3
20.6
2010
2011
2012(e)
１
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2013(f)
2014(f)
2015(f)
Global shipments of branded and white box tablets will
exceed notebook shipments for the first time in 2013
•
Digitimes Research projects that total tablet shipments, including both
branded and white box models, will grow 111% on 2011 levels to
reach 155 million units in 2012.
•
Digitimes Research also forecasts that total global tablet shipments
will grow 38.3% year on year to 210 million units in 2013, overtaking
notebook shipments for the first time.
•
•
Tablet and notebook shipments will collectively reach 403 million
units in 2013, with tablet shipments greater than notebook
shipments at a ratio of 53:47.
Total global tablet shipments will reach 318 million by 2015,
representing more than 100% growth from the 2012 figures.
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Global shipments of branded tablets
(Excluding white box), 2010-2015
Unit: m units
220.0
183.5
144.0
103.9
63.3
20.6
2010
2011
2012(e)
2
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2013(f)
2014(f)
2015(f)
Branded tablet shipments are also
forecast to surpass notebooks in 2015
•
If only branded tablets are factored in, tablet shipments will still reach
144 million units in 2013 with a growth rate of 38.6%.
•
Global shipments of branded tablets will reach 220 million units by
2015, greater than the projected figure of 194 million for notebooks in
that year.
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Global shipments of branded and white box
tablets, 2010-2013
Unit: m units
220
+38%
170
+409%
120
+65%
+75%
70
20
-30
Total
White box
Other mainstream brands
Apple
2011
73.3
10.0
22.3
41.0
3
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+59%
+23%
2012(e)
154.8
50.9
38.9
65.0
2013(f)
214.0
70.0
64.0
80.0
Apple will see slower growth than other brands
and white box tablets in 2013
•
Tablets can be divided into three main categories for the purposes of analysis: Apple
(iPad), other major brands (non-iPad), and white box. Digitimes Research forecasts that
growth rates for other major brands and the white box sector will be higher than for
Apple in 2013.
•
•
•
•
While Apple has launched the iPad mini, its high price and the fact that growth in
sales of the smaller model will come largely from cannibalizing sales of the 9.7-inch
iPad, Apple’s growth rate is expected to slow down.
iPad shipments are lower than iPhone shipments at a ratio of 3:7, with the iPhone
acting to drive iPad growth; however, the growth rate of the iPhone in the
smartphone market is also slowing down.
The entry of Google and Microsoft into the market will push the combined grow rate
for other major brands up 27 percentage points to around 64% in 2012.
White box tablets have seen explosive growth in 2012, but growth is expected to
slow in 2013, as a high base level has now been established and prices of branded
tablets fall closer to white box prices.
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Global tablet shipments by brand, 2011-2013
Unit: m units
100
80
60
40
20
0
Apple
2011
2012(e)
2013(f)
41.0
65.0
80.0
Samsun Microso
Google Amazon
g
ft
0.0
4.9
19.0
3.5
10.8
10.5
4.6
7.4
9.5
4
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0.0
2.5
8.0
Asus
Lenovo
B&N
Acer
1.5
2.7
5.0
1.1
2.1
3.0
2.9
2.5
2.5
1.9
1.5
1.8
Other
tier 1
brands
6.8
4.5
4.7
White
box
10.0
50.9
70.0
Rankings dominated by the big 5,
number of players set to shrink further
•
Major brand vendors such as Apple, Google, Amazon and Microsoft all launched their latest products in
September and/or October 2012. Digitimes Research projects that the top five branded tablet vendors in
2013 in order will be Apple, Google, Amazon, Samsung and Microsoft.
•
•
•
•
•
•
•
Apple will retain the top spot, but its growth will slow, largely due to high prices and the slowdown
in the growth of the iPhone, which has acted as a growth driver for the iPad in previous years.
Google’s tablet shipments could reach 19 million if it launches low-end, midrange and high-end
Nexus tablets as expected.
As shipment figures for Google already include all Nexus devices, the Nexus 10 is not included in
Samsung’s shipments and the Nexus 7 is excluded from Asus’ shipments.
Digitimes Research is conservative about the prospects for Amazon tablets in 2013, largely due to
Google’s aggressive pricing and the obstacles to expansion in other markets created by the
limitations of Amazon’s content ecosystem and product strategy.
Samsung‘s shipments are likely to be roughly on a bar with Amazon in 2013, although it would in
fact surpass Amazon by a significant degree if Nexus 10 shipments were included in its shipments;
it will also be the only hardware brand vendor in the top five tablet brands in 2013.
Microsoft aims to ship eight to twelve million tablets in 2013, but given Steve Ballmer’s comments
that Surface sales were “modest”, Digitimes Research projects that actual shipments will be at the
lower end of this range, i.e. around eight million units.
Asus and Lenovo will still see growth, but other brands will mostly see shipments level off or
decline.
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Global tablet shipment share by vendor, 2013
Apple
Amazon
Microsoft+B&N
Google
Samsung
Other tier 1
brands
White box
10%
7%
37%
33%
7%
144m units
(excluding
white box)
7%
214m units
(including
white box)
56%
13%
7%
4%
5
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5% 5%
9%
The big 4 platform firms are forecast to take more than
80% of branded tablet shipments
•
The tablet market will become more concentrated in 2013, with the top four
brands accounting for more than 80% of branded tablet shipments.
•
•
•
•
Apple is forecast to take 56% of branded tablet shipments, a seven point
drop on 2012 levels.
Google is expected to increase its share of branded tablet shipments by
nine percentage points on 2012 levels to 13% in 2013.
Shipments for Amazon, Microsoft + B&N, and Samsung will be roughly
on a par with one another.
If white box tablets are factored in, Apple’s 2013 shipment share will fall to
37%, while other brand vendors’ shares will all drop below 10%, giving the
white box sector one third of the tablet market as a whole.
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Chap. 4.2
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Global branded tablet shipments and shipment
share for different size tablets, 2013
Unit: m units
7.x”
75.6
8.x”
9.x”
10.x”
100%
60.3
>11
”
0.4
13.7
Unit: %
3.7
13.3
80%
28.6
41.2
60%
27.6
1.9
40%
19.2
14.2
8.x"
1.3
20%
0.4
9.x"
10.x"
>11"
52.5
26.6
5.3
1.32.7
7.x"
58.1
0%
2012(e)
2013(f)
Note: Figures on the left of each bar represent 2012, figures on the right represent 2013
6
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Share of 7-inch devices in global branded tablet
shipments will climb above 50% in 2013
•
Shipments of 7.x” models in the branded sector will shoot up 174% on 2012 levels to 75.6 million units
in 2013.
•
•
7.x” models’ shipment share will rise to 52.5%, making this the mainstream size for branded
tablets.
8.x” models will re-enter the branded sector thanks to Amazon, and should see shipments double from
2012 levels to 2.7 million units in 2013 if shipments remain strong throughout the year, although the
shipment share of this size segment is likely to remain below 2%.
•
Following the launch of the iPad mini, shipments of 9.x models, which were previously the mainstream
size, will drop from 60.3 million in 2012 to 41.2 million in 2013.
•
•
Their share of shipments will also fall by close to 30 points from 58.1% in 2012 to 28.6% in 2013.
While the mainstream of the market may be moving towards the seven-inch class, the Surface and the
Nexus 10 will continue to bolster 10.x” shipments in 2013, with shipments of this size segment likely to
reach 19.2 million units or 13.3% of overall shipments.
•
Windows will be the main growth driver for 11-inch and larger sizes in 2013, while part of notebook
book sector will transition to convertible tablets, strengthening shipments of tablets in this size class.
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Global branded and white box tablet shipments and
shipment share for different size tablets, 2013
Unit: m units
7.x”
8.x”
9.x”
10.x”
100%
135.8
Unit: %
>11
”
3.4
0.3
10.3
9.6
80%
20.9
41.1
4.6
60%
69.3
62.8
40%
44.0
6.4
7.x"
8.x"
62.6
20.6
15.8
8.3
20%
0.4
9.x"
4.1
10.x"
44.3
5.3
>11"
0%
2012(e)
2013(f)
Note: Figures on the left of each bar represent 2012, figures on the right represent 2013
7
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More than 90% of shipments of branded and white box
tablets are in 7.x- and 9.x-inch sizes
•
Including both branded and white box units, shipments of 7.x” tablets will
grow 96% year on year to 136 million units in 2013.
•
•
The overall shipment share for this size class will hit 62.6%.
The bulk of white box shipments will come from 7.x” and 8.x” models, with
the white box sector contributing relatively little to shipments of larger size
products.
•
9.x” models share of combined branded and white box tablet shipments
will drop by half from 41.1% in 2012 to 20.9% in 2013.
•
Size classes other than 7.x” and 9.x” will all account for less than 10% of
overall tablet shipments.
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Global branded tablet shipments and shipment
share by platform, 2012-2013
Unit: m units
iOS
Android
80.0
Unit: %
Windows
100%
3.6
80%
33.9
9.2
65.0
35.2
50.7
60%
35.2
40%
62.6
13.3
55.6
20%
3.7
0%
iOS
Android
Windows
2012(e)
2013(f)
Note: Figures on the left of each bar represent 2012, figures on the right represent 2013
8
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iOS share of branded tablets will decline slightly in 2013
but is still likely to remain close to 60%
•
Looking at shipments by platform, iOS will grow 23.1% to a projected 8.0
million units in 2013, but its share of branded tablet shipments will decline
seven points on 2012 levels to around 55.6%.
•
Android and Windows will both see their shipments and shipment share
increase in 2013.
•
•
Android shipments will rise to 50.7 million units, while the platform’s
share of branded tablet shipments will rise by a meagre 1.3 points to
35.2%.
Windows tablet shipments are forecast to hit 13.3 million units for a
growth rate of 260%, with the shipment share rising by 5.6 percentage
points to 9.2%.
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Global branded and white box tablet shipments
and shipment share by platform, 2012-2013
Unit: m units
iOS
Android
120.7
80.0
Unit: %
Windows
100%
2.4
6.2
80%
86.1
55.6
60%
65.0
56.4
40%
13.3
20%
42.0
37.4
2012(e)
2013(f)
3.7
0%
iOS
Android
Windows
Note: Figures on the left of each bar represent 2012, figures on the right represent 2013
9
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If white box shipments are not counted,
Android share increases by just 1 point
•
When white box tablets are factored in, Android’s shipments and
share of shipments rise significantly.
•
Combined shipments of branded and white box Android tablets will
grow 40.2% to hit 121 million units in 2013.
•
While Android shipments will grow by 34.6 million units, this increase
will make only a limited contribution to shipment share for the
platform, which will rise 0.8 points from 55.6% in 2012 to 56.4% in
2013.
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Global shipments and shipment share for various
Android tablet brands, 2012-2013
Official Android
Unit: m units
Amazon+B&N
70.0
50.9
37.7
20.9
White box Android
Unit: %
100%
80%
59.1
58.0
60%
14.313.0
40%
16.6
20%
24.2
10.8
31.2
0%
2012(e)
2013(f)
Note: Figures on the left of each bar represent 2012, figures on the right represent 2013
10
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Ultra-low priced Nexus tablets more likely to take share
from Amazon and B&N rather than white box makers
•
Android will become the largest tablet platform over the whole year in 2012, and will continue to lead in
2013. However, the official Android models that bring genuine benefits for Google continue to account for
only a small share of shipments.
•
•
•
•
All branded tablets other than models from Amazon and B&N use official, Google-certified versions
of Android.
White box vendors are mostly not Google certified.
As a result, shipments of branded Android tablets excluding Amazon and B&N are already
approaching shipments of official Android models.
Digitimes Research believes that Google is highly likely to follow the Nexus 7 and Nexus 10 by launching
an ultra-cheap Nexus tablet in 2013, with a target price of US$99.
•
•
•
Google’s heavy promotion of Nexus tablets will help to push official Android’s shipment share up
from 24.2% in 2012 to 31.2% in 2013.
Digitimes Research projects that Amazon and B&N will suffer most from the success of the Nexus
range, with their collective shipment share set to fall from 16.6% in 2012 to 10.8% in 2013.
The impact on the white box sector will depend on Google’s channel strategy for the ultra-cheap
Nexus model. If shipments are concentrated in Europe and North America, the impact on the white
box sector is likely to be small.
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Global shipments and shipment share for each
type of Windows tablet, 2012-2013
Surface
Unit: m units
Windows models from other brands
Unit: %
9.0
100%
8.0
8.0
7.0
80%
6.0
32.4
39.8
5.3
5.0
60%
4.0
3.0
2.5
2.0
40%
67.6
1.2
1.0
60.2
20%
0.0
Surface
2012(e)
Other brands
2013(f)
0%
2012(e)
2013(f)
Note: Figures on the left of each bar represent 2012, figures on the right represent 2013
11
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Microsoft is projected to take more than 60% of
Windows tablet shipments
•
The launch of Windows 8 is likely to tempt PC vendors to transition a
portion of their notebook models into convertible tablets.
•
•
•
Digitimes Research projects that shipments of Windows tablets by
hardware brand vendors will grow 341% on 2012 levels to 5.3 million
units in 2013.
However, this 5.3 million total will represent just 3.7% of branded
tablet shipments in 2013, and just 2.5 million of all tablet shipments if
white box models are factored in.
Microsoft is attempting to bolster Windows’ shipment share with shipments
of the Surface, which are projected to hit 2.5 million in 2012 and 8.0
million in 2013.
•
Digitimes Research projects that the Surface will account for 67.6% of
Windows tablet shipments in 2012, falling to 60.2% in 2013.
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Tier 1 hardware brand vendors’ tablet shipments
and shipment share, 2012-2013
Unit: m units
Unit: %
█ Branded Android (excluding Nexus) █ Branded Windows (excluding Surface)
18.7
100%
9.3
22.1
80%
11.7
60%
40%
90.7
77.9
5.3
20%
1.2
0%
Branded Android
Branded Windows
2012(e)
2013(f)
Note: Figures on the left of each bar represent 2012, figures on the right represent 2013
12
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Tier 1 hardware brands’ share of
Windows tablet shipments will grow in 2013
•
In order to expand their share of shipments in the tablet sector as a whole, Google and Microsoft need
to compete with their own branded hardware, but must also gain the support of hardware brand
vendors.
•
Hardware brand vendors’ allocation of resources between Android and Windows will be key to
Microsoft’s ability to compete with Google.
•
Digitimes Research projects that hardware brand vendors will ship 12.9 million tablets in 2012,
excluding the Nexus 7 and the Surface.
•
•
•
Android accounts for 11.7 million or 90.7% of this figure.
Windows accounts for 1.2 million or 9.3%.
Hardware brand vendors are projected to increase their tablet shipments by 86% on 2012 levels to 24
million units in 2013.
•
•
•
Android will account for 18.7 million or 77.9% of this figure.
Windows will account for 5.3 million or 22.1% of this figure.
While Windows’ share of hardware brand vendors’ shipments will increase, Digitimes Research believes
that much of this increase will come from the fact that many PC vendors’ resources are largely derived
from their PC divisions that have for so long been dominated by Windows, rather than any real success
in tempting hardware brand vendors to switch resources from Android to Windows.
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Shipments of convertible tablets, 2011-2013
Unit: k units
10,000
8,000
6,000
4,000
2,000
0
Windows
Android
2011
0
1,300
13
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2012(e)
620
2,240
2013(f)
4,800
3,000
Convertible tablet shipments are forecast to soar in
2013, while Windows models are likely to overtake
Android in the convertible sector
•
Digitimes Research projects that the bulk of Windows tablets launched by
hardware brand vendors will be convertible models, with shipments forecast to
hit 4.8 million units in 2013.
•
If Android models are factored in, shipments of convertible models will grow
171.5% on 2012 levels to 7.8 million units in 2013, accounting for 5.4% of all
tablet shipments.
•
Digitimes Research defines convertible models as tablets and therefore believes
that Windows 8 will hasten the contraction in notebook shipments.
•
Digitimes Research projects that notebook shipments will decline 1.4% in
2013. However, if Windows-based convertible models are categorized as
notebooks as they are by some PC vendors, notebook shipments would
grow by 1% in 2013.
PDF issued on January 23, 2013 to Ms. Susan Wang, Procom Electronics Inc
Membership ref. ID: 201301220009