Commentary: Foxconn to continue to dominate tablet OEM business in 2013

Max Wang, Taipei; Jackie Chang, DIGITIMES [Monday 17 December 2012]

Demand for tablets is expected to grow. In 2012, total demand in the market was 120-130 units. Market observers believe in 2013, demand will expand to 180 units and in particular, Apple will continue to thrive in the tablet market.

The rising demand for tablets has also been benefiting Taiwan-based OEM firms. In particular, Foxconn (Hon Hai Precision Industry) is likely to continue to be the biggest benefactor due to orders from Apple. Other firms such as Quanta Computer, Pegatron Technology, Wistron, and Compal are also likely to see healthy growth in tablet shipments in 2013.

Take November for example, due to the tear-end shopping season, Foxconn saw revenues for the month reach a historical high of NT$351.733 billion (US$12 billion), representing an on-month growth of 27.6%. Market observers believe Foxconn's December revenues will continue to be strong and fourth-quarter revenues are likely to exceed NT$1 trillion, an on-quarter growth over 40%.

Nevertheless, some firms believe Foxconn's revenues have been heavily influenced by Apple products hence the firm should diversify its risks. Foxconn is said to have received orders from Amazon and Microsoft.

Quanta is currently Taiwan's second largest OEM in terms of tablet OEM orders. By obtaining orders for Amazon's Kindle Fire and Google's Nexus series, so far, Quanta's tablet shipments have exceeded 10 million units in 2012. Market observers predict Quanta's total tablet shipments in 2012 to reach around 13-15 million units. The figure is likely to increase to 17-20 million units in 2013, said market observers.

Pegatron has been seeing growth in tablet orders. The firm has been accepting OEM orders for Microsoft's Surface tablets, but end market demand has been weak. But because the firm has been receiving orders for Apple's iPad mini, Pegatron's 2012 total tablet shipments are likely to reach 10 million units.

Wistron has smartphone OEM orders from Research in Motion (RIM). Recently, Wistron began to ship Lenovo's ThinkPad Tablet 2 and has reportedly received tablet orders from Dell. However, Wistron's 2012 total tablet shipments should be around 2-2.5 million units. The figure is expected to increase to six million units in 2013.

Compal has orders from customers such as Lenovo and Acer, the firm reportedly has the chance to receive orders for Amazon's new tablet. Total 2012 tablet shipments by Compal are estimated to be around 1-2 million units, and the figure is expected to increase to 6-8 million units in 2013.