Intel's tablet processor challenge: Competing on the low end

Intel's tablet processor challenge: Competing on the low end

Summary: Should Intel chase the entry level tablet market it will run into the aggressive pricing of Chinese rivals such as Rockchip, Allwinner and Amlogic, according to IHS.

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The tablet processor market is expected to grow 23 percent in 2014 and Intel is poised to make a run courtesy of its Bay Trail chips, according to IHS Technology. The problem: Intel will have to battle Samsung and Qualcomm as well as a bevy of Chinese commodity chip makers.

Intel plans to grow tablet volume from 10M to 40M in 2014

Tablet processors are expected to hit 299.7 million units in 2014, up 23 percent from 2013. Tablet processors should top 400 million units by 2016, said IHS. And guess where that growth will come from? Entry level tablets.

At the high-end of the tablet market, the players are well known. Samsung and Qualcomm along with Nvidia are the major players.

But it's the low end of the tablet market that's worrisome, according to IHS. Rockchip, Allwinner and Amlogic---three Chinese chipmakers supplying processors for tablets as low as $50---are key players in the entry level tablet market. How does Intel compete with that pricing? For good measure, you could include MediaTek, a Taiwan smartphone processor provider, as an Intel threat from below.

rockchip

 

Now Intel could simply avoid that commodity (more like throwaway) tablet market completely, but IHS noted that Chinese chipmakers are hoping to get design wins at Lenovo and HP. Once these companies gain a foothold at the bottom rung, they could move upstream in a hurry to higher margin processors.

IHS's point is worth noting, but this bottoms up attack may take time to play out. According to Mercury Research, Intel's overall market share was 87 percent Intel is now squeezing AMD at the low end of the PC, notebook and server markets.

intc market share mercury

 

In other words, Intel doesn't have to worry about the throwaway tablet market...just yet.

Topics: Hardware, Intel, Processors, Tablets

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3 comments
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  • 50 dollar tablet

    How do you even make a 50 dollar tablet. The android-on-a-stick devices go for $ 40 - $ 80 dollars and up and they are essentially a USB thumb drive with a couple of other features - no display, glass, touch screen, gyroscope..etc
    SunFire23
    • surplus parts and old technology

      These $50 tablets are made with 4-8GB storage, slow 2-3 year old processor technology, low resolution screen technology, often in the 640x480 range. I'd guess most is surplus stock of parts manufacturers dumped or parts manufactured with old equipment premium brands got rid of for newer technology. This old equipment wont be capable of manufacturing better parts. This does bode well for current spec tablets being available in a couple years for $50.0. it will still be old junk by then but the low end will be competent usable devices.
      greywolf7
  • Android tablets are all commodity products already

    Dozens of companies make commodity tablets and they are all Android. There is little differentiation between software or hardware, so they are destined to compete on price. The Android market will be a bloodbath, as vendors compete on price at low profit margins, while losing patent lawsuits and paying future royalties, that will further erode their profitability. Expect to see sub $100 Android tablets, that were originally priced $100s higher, very soon.
    GaryDMN