Wednesday, June 15, 2011

90 percent of tablet PC shipments this year will be among 9.7-inch and 10.1-inch products while there is potential for future growth of 7-inch product

TAIWAN: Computex this year is a huge parade of tablet PCs. In addition to products introduced by all major brands, system makers with NB as major OEM/ODM products also introduced a series of prototype machines hoping to establish new collaborations with customers willing to enter tablet PC markets.

According to the statistics and prediction by the research department WitsView under TrendForce, 88.6 percent of global tablet PC shipment will be focused on products of two sizes (9.7-inch and 10.1-inch).Source: WitsView, Taiwan.

WitsView suggested that 9.7-inch and 10.1-inch products will still be the mainstream with around 85 percent of market share in the coming few years due to customers’ preference of tablet PC with large view. On the other hand, 7-inch tablet PC could become a product with long term sales potential due to its unique cost advantage and size segmentation.

According to R&D Director Chiu Yu-Pin of WitsView, the major competitiveness of 7-inch product comes from the cost as compared to 9.7-inch or 10.1-inch products. According to WitsView’s investigation, LCD panel and touch panel module account for around 40 percent of the cost of tablet PC. There has been 20~30 percent difference in the costs of these two key components between 7-inch and 10.1-inch products, which means that the unit cost of 7-inch tablet PC is at least 10 percent lower than 10.1-inch tablet PC. Therefore, it can be suitable for products of the 7-inch size or smaller to be promoted as low-cost tablet PC to attract more consumers and expand market size for tablet PC.

Meanwhile, Chiu has indicated that the proper size at 7 inch is also one of the development advantages. First of all, with the sole leading position in tablet PC market, Apple has not been introducing any product outside of 9.7-inch. So the 7-inch product could be the nice size segmentation for other brands to avoid direct conflict with iPad. Secondly, the portability and weight of 7-inch product have reached a nice balance, and the matured supply chain of key components (such as LCD panel) can fill up the size gaps between 5-inch smart phones and 10.1-inch tablet PCs such that it could be developed into a niche product.

WitsView has predicted that the shipment ratio of tablet PCs of 7-inch and smaller sizes will climb to 10.4 percent in 2012 and 12.3 percent in 2013 from the 8.3 percent in this year. As long as the cost advantage of 7-inch product allows its end sales price to maintain around $100 gap with the mainstream 9.7-inch and 10.1-inch products, we can be optimistic about the follow-up development of product of this size.

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