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Contracted Manufacturers Account for Huge Majority of Tablets Produced

September 21, 2012

Contracted Manufacturers Account for Huge Majority of Tablets Produced

By Oliver VanDervoort
Contributing Writer

When you’re out on the hunt for the top tablets, you’re probably looking for a label like Samsung or Apple (News - Alert). The odd thing is that while companies have certainly put their stamp of approval and their signature technology into parts of making the tablets, a growing number of tablets are created by contract manufacturers. 

A new report from IHS (News - Alert) iSupply shows that nearly 90 percent of tablets made in 2012 were made by companies contracted by the industry bigwigs.

Companies like Apple and Amazon are turning to companies located in Asia in order to make their products. This rising number of tablets being produced by smaller companies is due in large part to lack of exposure the larger and more well-known companies can endure, using this approach. 

The number of tablets produced by contracted manufacturers is only going up, and IHS iSupply saysthat trend will continue.

In 2011, contracted manufacturers produced 87.5 percent of tablet production. This year, the number is expected to rise another 2 percent and approach a full 90 percent of tablets made. The exact number of tablets made by contractors is expected to hit 89.2 percent by the end of this year. 

Image via Shutterstock

The number is expected to rise over 90 percent by 2015, though IHS does believe that eventually the contractors production percentage will level off and even fall back a bit in 2016. Even when that number does fall back from 2015, contractual manufacturers will still be producing more than 90-percent of all tablets.

“The high percentage of outsourced manufacturing of tablets reflects the choice among tablet brands and original equipment manufacturers – even ones as big as Apple – to refrain from in-house production,” said Jeffrey Wu, senior analyst for OEM at IHS. “Tablet brands use outsourcing for many reasons, including faster time to market; the leveraging of capabilities, especially for firmware development and hardware integration; and asset flexibility that translates into reduced corporate expenditures and lower headcount.”

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Edited by Braden Becker

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