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'Whitebox' tablets surge, gaining on Apple

The whitebox tablet market exploded in the first quarter of 2011, becoming the second largest segment behind Apple, according to market researcher DisplaySearch.

Shipments of nonbranded tablets surged in the first quarter, making the so-called "whitebox" tablet segment the second biggest next to Apple's iPad, according to a market research firm.

Local or nonbranded tablet vendors are the fastest growing segment of the worldwide market, according to a report from DisplaySearch released today. Whitebox vendors increased shipments from 567,000 units in the fourth quarter of 2010 to 1.9 million units (see graph below) in the first quarter of this year, representing a 235 percent quarter-to-quarter growth rate, DisplaySearch said.

Largely unnoticed to date, the jump in whitebox shipments puts the market squarely behind Apple, which held about a 54 percent share and shipped 5.2 million units in the same period.

'Whitebox' tablets claim a large chunk of the tablet market and this segment has gone largely unnoticed.
'Whitebox' tablets claim a large chunk of the tablet market and this segment has gone largely unnoticed. DisplaySearch

"It's a significant input into the market," Richard Shim, an analyst at DisplaySearch, said in a phone interview. Lots of whitebox vendors add up to a large chunk of the market. "It's like a series of raindrops falling into a bucket. And in this case (tablets), it's like a downpour," Shim said.

Samsung, at just under a million units shipped in the first quarter, is the next biggest player, Shim said.

China represented the largest market for whitebox tablets, accounting for 44 percent of worldwide shipments. Overall shipments in the tablet category were down 5.2 percent quarter-to-quarter, from 10.2 million units to 9.7 million units, but up nearly thirteen-fold year-to-year, from 668,000 units to 9.7 million units, DisplaySearch said. Many of these tablets use processors based on the ARM design and Google's Android operating system.

"Price is a significant influence on any consumer product, and tablets currently carry a healthy premium on the cost of the hardware components," Shim stated in the report. "The emergence of the whitebox tablet market is an indication that the market is reacting to that premium and trying to give consumers a lower price to drive adoption. In the short term, the tradeoff will likely result in a less than ideal user experience."