November 28, 2013 7:00 pm JST
Cheap Chinese tablets flooding global market
YOSUKE SATO, Nikkei staff writer
Tablets are growing in popularity around the
world, with a supporter using one to take a photo of an Afghanistan
presidential candidate on Nov.20 at the capital.
© AP
TOKYO -- Chinese tablet makers are pumping out bargain-priced
models as they look to increase their sway in a global market that is
growing at breakneck speed.
Annual shipments worldwide will likely surge 50% on the year to 184 million units in 2013, according to technology research company Gartner. NEC and other Japanese tablet makers offer a variety of models starting around the upper-20,000 yen ($195) range. But China's low-end tablets, which are sometimes as cheap as 10,000 yen or less, are controlling the global market, especially emerging ones.
According to research firm NPD DisplaySearch, Chinese tablet makers collectively bought 52% of September's shipment of liquid crystal display panels. Even U.S.-based Apple, the market leader, purchased only less than 20% of the month's shipment.
The American company will probably account for a larger chunk of panel purchases in October and later, as it has recently released new iPad Air and iPad mini models. However, the figure will still be only about 30%, even when combined with the share of second-ranked Samsung Electronics of South Korea.
Third-ranked Amazon of the U.S., Taiwan's Asus and China's Lenovo each has a share of about 4%, far behind the two largest LCD panel users.
Struggling to keep up
However, the responses of component makers to the rapid expansion of the tablet market are mixed. Makers of such key components as DRAM, NAND flash memory and LCD panels are concerned about the increasing challenge of forecasting demand.
As long as only a few manufacturers of finished products monopolize the market, component makers can adjust their outputs and control inventories in accordance with such customers' product plans, such as the release of new models.
However, now that a host of Chinese tablet makers are flooding into the market, it is becoming extremely difficult for component companies to predict market trends and keep a healthy supply-demand balance. An official at a major NAND maker says that the company cannot blindly celebrate the strong current business, because some Chinese makers are placing orders that are double or triple actual demand levels.
Chinese companies also use components in ways that established makers would not even have considered.
Tablets normally use mobile DRAM, the same used in smartphones. However, some Chinese tablet makers used general-purpose DRAMs normally found in PCs because mobile DRAM units were more expensive than general-purpose ones until recently. As a result, the price of both kinds of DRAM continued to rise in the first half of this year.
In addition to the volatility in prices of such components as memory and LCD panels, the fluctuation of tablet prices can be crucial to the survival of component makers.
According to Gartner's estimate, the shipment of tablets will continue to be larger than that of PCs until 2017.
Annual shipments worldwide will likely surge 50% on the year to 184 million units in 2013, according to technology research company Gartner. NEC and other Japanese tablet makers offer a variety of models starting around the upper-20,000 yen ($195) range. But China's low-end tablets, which are sometimes as cheap as 10,000 yen or less, are controlling the global market, especially emerging ones.
According to research firm NPD DisplaySearch, Chinese tablet makers collectively bought 52% of September's shipment of liquid crystal display panels. Even U.S.-based Apple, the market leader, purchased only less than 20% of the month's shipment.
The American company will probably account for a larger chunk of panel purchases in October and later, as it has recently released new iPad Air and iPad mini models. However, the figure will still be only about 30%, even when combined with the share of second-ranked Samsung Electronics of South Korea.
Third-ranked Amazon of the U.S., Taiwan's Asus and China's Lenovo each has a share of about 4%, far behind the two largest LCD panel users.
Struggling to keep up
However, the responses of component makers to the rapid expansion of the tablet market are mixed. Makers of such key components as DRAM, NAND flash memory and LCD panels are concerned about the increasing challenge of forecasting demand.
As long as only a few manufacturers of finished products monopolize the market, component makers can adjust their outputs and control inventories in accordance with such customers' product plans, such as the release of new models.
However, now that a host of Chinese tablet makers are flooding into the market, it is becoming extremely difficult for component companies to predict market trends and keep a healthy supply-demand balance. An official at a major NAND maker says that the company cannot blindly celebrate the strong current business, because some Chinese makers are placing orders that are double or triple actual demand levels.
Chinese companies also use components in ways that established makers would not even have considered.
Tablets normally use mobile DRAM, the same used in smartphones. However, some Chinese tablet makers used general-purpose DRAMs normally found in PCs because mobile DRAM units were more expensive than general-purpose ones until recently. As a result, the price of both kinds of DRAM continued to rise in the first half of this year.
In addition to the volatility in prices of such components as memory and LCD panels, the fluctuation of tablet prices can be crucial to the survival of component makers.
According to Gartner's estimate, the shipment of tablets will continue to be larger than that of PCs until 2017.
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