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

[December 11, 2013]

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

TAIPEI, Taiwan --(Business Wire)--

According to the global intelligence provider TrendForce, the global tablet shipment is projected at 229 million units for 2014, an annual growth rate dipping to around 20%. As the expectation for Windows 8 to encourage tablets' commercial application in 2014 is shattered, the dominant Android (News - Alert) damps the possibility that OS lifts the sales momentum. Besides, the hardware is also pressured by prices, making the specifications launched by brands gain little traction among consumers.

TrendForce named several challenges for hardware differentiation. Firstly, brands will launch 12"-and-above tablets to develop the niche market in 2014. Nevertheless, the large-sized products are contradictory to tablets' two major advantages, easy mobility and affordable price, making them hard to promote.

Secondly, the high-resolution products' high-price obstacle is hard to clear as it stumbles on the way. Core to the high-reolution tablets, panels with 300 PPI-and-above resolution will see challenges in capacity, yield, and cost. Therefore, TrendForce continues to hold a conservative view on the high-resolution tablets' sales in 2014.

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

TrendForce indicates 2013 was a harsh year for white-box tablet makers as on top of brands' price cuts that squeezed their room for survival, the sudden price surges of key component drained makers' limited profits and forced small makers to withdraw from the market. As the emerging markets have strong demands for low-priced tablets, after several cruel eliminations, the existing white-box tablet makers are relatively strong and healthy in terms of finance and business scale and are able to integrate ample resources to share the low-priced tablet demand in the developing economies.

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