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Whitebox Tablet PC Market, Here to Stay?

By Richard Shim – Senior Analyst, DisplaySearch, Deborah Yang – Research Director, Monitor & TV, DisplaySearch, Jeff Lin – Value Chain Analyst, DisplaySearch, and David Hsieh – Vice President, Greater China Market, DisplaySearch

Are one group’s rejections another’s opportunity?

We’ve been learning that there is a growing market of tablet PC devices using 9.7” 1024 x 768 resolution panels that have been passed over by Apple and HP, the two most widely noted vendors for those panels. For Q1, there were nearly two million tablets with 9.7” screens not accounted for by these brands.

Apparently panels deemed A-minus or lower are being rejected by top brands, but they are being picked up by local Chinese players. A quick search of 9.7” tablets for mainland China on Alibaba.com reveals over 4,000 products. Further searching suggests that many of those 4,000 models are intended for markets outside China. A search of 9.7” tablets on Chinese version of Alibaba.com shows over 1,500 models in the China market.

So can we expect whitebox markets to be a recurring influence on the tablet market? The verdict is still out, but what we’re hearing in China is that many of the whitebox players are regretting their foray into the tablet PC market and are considering withdrawing their tablet PC business. While they aggressively moved into the category, sales have been far below their expectations, taking several months to clear out inventory.

This would validate our theory that the tablet PC isn’t just about the hardware: software and user experience are very important to the usefulness of the device. Tablets are more of a convenience computing platform, in line with consumer preferences in mature markets, where users are looking for devices that complement their performance computing devices. In these markets, consumers are looking to extend their computing experience, whereas consumers in emerging markets are looking more for a performance computing experience.

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