Contract manufacturers dominating tablet assembly - Mobile World Live

Contract manufacturers dominating tablet assembly

24 SEP 2012

Contract manufacturers will account for 89.2 percent of tablet devices shipped in 2012, with only 10.8 percent assembled by the companies which badge the product, according to analyst firm IHS iSuppli.

The use of outsourced manufacturers is on the increase this year “and beyond”, as brands seek to minimise operational risks and reduce costs.

“Tablet brands use outsourcing for many reasons, including faster time to market; the leveraging of capabilities, especially for firmware development and hardware integration; and asset flexibility that translates into reduced corporate expenditures and lower headcount,” said Jeffrey Wu, senior analyst for OEM at IHS.

According to the company, the share of devices assembled by contract partners will peak at 91.1 percent in 2015.

The biggest outsourced manufacturer is Hon Hai, which is also known as Foxconn, which accounted for 62 percent of tablet shipments in 2011. It was noted that this company’s position is unique because of its close relationship with Apple – the company behind the dominant iPad.

In contrast, rival device assemblers have “been left to scramble for what remains of the tablet market – making rival devices for the likes of Barnes & Noble, Amazon and Asus, none of whose product offerings matches the iPad’s soaring sales and unequalled clout”.

IHS also said that with the emergence of more competitive Android and, potentially, Windows-powered tablets, there will be an opportunity to challenge Hon Hai’s position – assuming consumers embrace the iPad alternatives.


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