El Segundo, Calif. − Global shipments of tablet processors is forecast to reach 299.7 million units in 2014, up 23 percent from 243.1 million in 2013, according to a new report from IHS Technology. Strong growth over the next few years is expected to drive increased competition from suppliers into the tablet processor arena, including Intel, said the report.
If global tablet shipment numbers for 2013 are any indication of growth over the next few years, the tablet processor market will continue on its upward track. Global tablet shipments reached 227 million units in 2013, up 33 percent from 170.9 million units in 2013, according to the latest research from Strategy Analytics. Global shipments alone in the fourth quarter reached 76.8 million units. By operating system, Android maintained its leadership with 62 percent global market share, Apple iOS accounted for 33 percent, and Windows trailed at three percent.
The IHS report, “Intel Sets Aggressive Target in Tablet Processor Market," indicates that 2015 will be another good year for tablet processors when volumes are expected to increase 18 percent, followed by shipments exceeding 400 million units by 2016.
"With the iPad from Apple, Samsung’s Galaxy and other offerings from various tablet makers still selling well among consumers, a number of vendors are starting to join the race to supply tablet processors for the market,” said Gerry Xu, senior analyst for processor research at IHS, in a statement. "The players range from kingpin Intel, to a smattering of Chinese suppliers involved in the so-called white-box market for lower-end tablets."
But entry into the market won't be an easy task. New entrants will face a small, entrenched group of tablet processor makers with very deep pockets, according to IHS. These include Samsung, which makes tablet chips for the iPad, and Qualcomm, the primary supplier of baseband chips for smartphones, and a maker of semiconductors that provide cellular functionality to complement the built-in Wi-Fi feature, according to the report.
IHS analysts expect Intel's tablet chips to find homes in a variety of Android-based tablets with the Intel Bay Trail processors finding their way into entry-level, 7- and 8-inch Android tablets by the first quarter, followed by later generations of chips including the Cherry Trail and Willow Trail.
The big challenge for Intel is how to compete in the entry-level segment crowded with Chinese vendors, producing affordable chips, said IHS. Some of the biggest Chinese competitors include Rockchip, Allwinner and Amlogic. Their advantage: "an astute handle on costs and the capability to produce turnkey chip solutions ready for deploying in any number of generic white-box tablets," said Xu.
Another competitor on the horizon is MediaTek from Taiwan, which IHS said is already a major supplier of processor for smartphones.
In addition, Intel will face other Chinese competitors that are looking to make their way into global brands, including Lenovo and Hewlett-Packet, said IHS, making competition and pricing strategies even more fierce in the midrange tablet processor category.