White-box tablet shipments were down 15.3% from sequentially to reach only 13.8 million units in the second quarter because the quarter was a slow season for North America and Europe, while demand from emerging markets also remained weak due to economic downturns. In addition, component shortages and rising component quotes have caused some white-box ODMs to be unable to fulfill some orders and were forced to delay orders to the second half of the year.
Orders for entry-level Wi-Fi-only tablets from mature markets such as Europe and North America were declining during the second quarter, while demand for tablets with phone functionality also decreased in emerging markets due to exchange rate fluctuations and weak economies, according to Digitimes Research's latest report on tablets.
As for component supply, panels had the most serious shortages, while rising memory prices also impacted white-box players' gross margins, making white-box players less aggressive about shipping tablets. The component shortage issues will not be eased until the third quarter.
In terms of product sizes, some white-box players turned their focuses from the 7-inch tablet market to the 8-inch one due to the fierce price competition in the 7-inch market. Tablets with 10-inch and above displays saw their shipment share rise to 28% in the second quarter mainly because demand for 2-in-1 devices has been rising.
As for tablet APs, MediaTek's solutions faced strong competition from Spreadtrum's inexpensive 3G APs in the tablet with phone functionality sector. Intel already stopped developing mobile device-specific AP solutions, but increasing demand for Windows 2-in-1s will help offset the drop and maintain the shipment share of white-box players' Intel-based tablets.
This article is an excerpt from a Digitimes Research Quarterly Data Report (Global tablet market – 2Q 2016). Visit our latest Data reports.