Competitive tablet segment alters 2013 supply chain strategies, says DisplaySearch

Press release, December 22; Alex Wolfgram, DIGITIMES [Saturday 22 December 2012]

Increased tablet adoption, Apple's strong dominance, and the emergence of new players like Google and Microsoft are changing the competitive landscape in the mobile PC market, according to research firm DisplaySearch. As a result, players within the supply chain (display manufacturers, OEMs, and vendors) have modified their business strategies and allocation plans to leverage their strengths and maintain market share.

"With the changes taking place in the mobile PC segment, existing supply chain relationships could be disrupted due to competitive conflicts," noted DisplaySearch researcher Jeff Lin. "For example, Samsung Display plans to improve its mobile PC customer portfolio by reducing its share in Apple and increasing support to captive brands and other external customers, like Amazon and Barnes & Noble."

Lin added, "In addition, the shift to touch notebooks and ultra-slim devices will be key areas of focus for Apple's mobile PC competitors in 2013. While capturing a larger portion of these market segments will be challenging, competitors will require solid commitments from their supply chain vendors (panel suppliers and OEMs) to ensure capacity and fool-proof, cost-down solutions. For example, Hewlett-Packard (HP), Lenovo, Samsung, and Acer have slashed prices on their ultra-slim notebooks in the hopes of combating the competition."

DisplaySearch said LG Display led in mobile PC panel shipments in the second quarter of 2012, with more than 30% of its shipments going to Apple. Apple was the clear leader in the mobile PC market, with its tablet shipments accounting for 84% of total mobile PC shipments for the quarter, primarily manufactured by Foxconn Electronics.

Additionally, HP ranked second in shipments for the mobile PC category during the time period, which includes notebook, tablet, and ultra-slim PC shipments, with Quanta capturing the largest portion of HP's overall production (about 33%). Foxconn led in mobile PC OEM production volume in the second quarter, with more than 85% of its production volume coming from Apple's 9.7-inch iPad products. Additionally, during the same time period Quanta started producing the Google 7-inch Nexus tablet.

"With 2013 business planning well underway, product portfolios, sales strategies, and sourcing plans for mobile PC brands will certainly impact the supply chain," Lin added. "Overall, the top 10 PC brands' 2012 on-year growth rates are forecast to increase only 2% for notebooks; however, tablet growth is still expected to be robust at 75%. Looking ahead to 2013, business plans for the top 10 PC brands are set higher, with a 16% on-year shipment increase on average for notebooks. Tablet growth will remain strong, but may be less impressive than in 2012."