During a survey of southern China's white-box tablet supply chain recently, Digitimes Research found that Intel will not be able to supply its Cherry Trail-based solutions to white-box players until the end of the third quarter. Most white-box players will only be able to use Bay Trail-T CR solutions for their Windows 10 tablets, reducing these devices' attractiveness to consumers.
Digitimes Research believes only specific white-box players that have landed orders from US channel retailers for the holiday season, will be able to profit by releasing ultra-cheap Windows 10 tablets using their advantages in economies of scale.
Overall tablet shipments continue to decline in the second quarter and Windows tablets, which had strong performance in the first quarter due to subsidies from Wintel and dual-operating system (OS) designs, started experiencing weakening sales in the second quarter. Only large-size Windows 2-in-1 devices (mostly 10.1-inch) still see good demand in the quarter.
Inexpensive Wi-Fi-only tablets and tablets with phone functionality are also suffering from decreasing shipments in the second quarter due to seasonality and competition from inexpensive large-size smartphones.
However, the 10.1-inch tablet has become a new favorite of white-box players because they are optimistic about demand for large-size 2-in-1 products; 10.1-inch display prices have been dropping rapidly since early 2015 and Microsoft's newest OEM licensing gives 10.1-inch products the most favorable pricing and the least specification restrictions.
Digitimes Research estimates that 10.1-inch models currently account for almost 50% of overall white-box Windows tablet shipments, boosting the size's share in overall tablet shipments to 15%.
Although the tablet market is expected to benefit from Windows 10's release in the third quarter, white-box players will only be able to release Windows 10 tablets using the existing Bay Trail-T CR solution in the quarter because Intel's Cherry Trail reference design will not become available until the end of September and its other cheaper Cherry Trail solutions will come even later.
To compensate from drawbacks in the hardware, white-box players are planning to offer their Bay Trail-T CR-based Windows 10 tablets at a cheaper price level and will push them mainly for the year-end holidays in the retail channel of Western countries.
In addition to a 7-inch Android tablet, Alco Electronics' orders from Walmart for the year-end holidays in 2015 are expected to include a 10.1-inch Windows 10 2-in-1 device, designed by China-based Yidong. The 2-in-1 device is expected to ship one million units and be priced below US$149.
