Intel has reportedly shipped 15 million tablet parts in the first two quarters of the year and it is now stepping up cooperation with Taiwanese and Chinese vendors.
Digitimes reports the chipmaker is “aggressively cooperating” with tablet makers in an effort to ship 25 million parts in the second half of the year. Earlier this year we reported that Intel was playing hardball, expending vast amounts of money to promote its tablet SoCs.
A month ago it became evident that Intel would struggle to reach its tablet SoC shipment target. Intel was hoping to sell 40 million parts this year.
Tablet market cooling down
One of the biggest problems faced by Intel is the relative maturity of the tablet markets. Tablets have become commoditised and since they are maturing product cycles are getting longer. This year tablet shipments could hit 200 million, with just 5 percent growth year-on-year.
Digitimes reports big players like Apple, Samsung and Asus could “suffer” due to the decline in demand. However, Intel focused much of its efforts on cheap, white-box tablets rather than high-end big brand products.
Intel has sweetened the deal by offering tablet makers technical assistance as well as marketing. The latter is crucial for many white-box outfits, as they usually do not excel at marketing. Intel does – the chipmaker has a huge network of industry veterans capable of selling anything from $99 tablets to $999 Extreme Edition chips.
White box churners are just part of the story
Crucially Intel has managed to attract a number of tier one vendors. A number of big brands have already released Intel-based tablets and others are working on them. The list includes heavyweights like Asus, Dell, HP, Acer, Lenovo, Toshiba and Sony.
Asus T100TA entry level Windows 8.1 transformer based on Bay Trail silicon
Intel has already announced that more than 200 tablets based on its chips will launch this year and most of them will come from Chinese brands.
Intel has to make every chip count, as it is burning a lot of money to sell them. Earlier this year it was estimated that Intel averaged a $51 subsidy on each tablet shipped (contra revenue is the politically correct term nowadays – Intel doesn’t like to use the ‘S’ word).
Bay Trail is not an ideal part for entry level tablets and phablets. To make it competitive Intel has to spend way too much money, but SoFIA could change this next year. Intel hopes to seize 20 percent of the market with SoFIA parts. Bigger Cherry Trail 14nm chips will eventually replace Bay Trail and complement SoFIA in some market segments.
We expect some overlap between the two. SoFIA is a smartphone part, but it could end up in phablet designs as well as compact tablets with phone functionality, which are quite popular in Asia.
