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API Journal Authors: Elizabeth White, Carmen Gonzalez, Liz McMillan, AppDynamics Blog, Vormetric Blog

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TrendForce: Component Replacements to Potentially Give Rise to Lower-than-$150 Tablet PCs

Tablets, which rank high on many consumers’ shopping lists, have become an undisputed highlight for this year's peak season, with cheap, under-$200 devices poised to gain major attention within the market. Considering how Google and Amazon are able to resort to advertising costs and other means to make up for their tablets' low prices, the PC vendors who traditionally rely on hardware sales for profit will be in for some serious competition. TrendForce's research has indicated that as far as hardware costs go, the retail prices for 7-inch tablets are unlikely to drop any lower than the current pricing. The replacement of key component parts, at the moment, serves as the only viable option for PC-branded manufacturers who are seeking to reclaim their market positions through low-pricing strategies.

Given that the display panel and touch module each account for approximately 35~40% of a tablet's total material cost, they are, naturally, major targets when it comes to cost control. With the replacement of the FFS panel with the TN panel and the use of the G/F/F touch modules, a tablet will be able to trim off an estimated $25 from the overall cost.

When it comes to minimizing memory component costs, commodity DRAM is perceived as an ideal option, for the 1GB version costs only around $3.5, approximately 65% less than its mobile counterpart. With regards to NAND Flash, with the 8GB and 4GB eMMC costing $6 and $4, respectively, the 4GB version is likely to be a preferred choice for many manufacturers. In terms of CPU, provided that the low-priced tablets utilize processor components from China-based manufacturers, TrendForce estimates that the cost per chip will only be around $12, which is approximately half that of the high-end tablets' $24-range processors.

As TrendForce indicates, whether the potential low cost tablets will indeed become a major hit remains to be seen, for much of their quality and specs will likely be affected by the costs of the materials used. Nonetheless, should PC-branded manufacturers release tablets that cost less than $150, this will certainly put a lot of pressure on China's white-box tablets makers, and in turn intensify the pricing competition in the 2013 tablet market.

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