Apple Dominance, Tablet Demand Shift Supply Chain: NPD
The competitive landscape in the mobile PC market—which includes tablets, notebooks, netbooks and hybrid devices—is rapidly changing thanks to increased tablet adoption, Apple's strong dominance and the emergence of new players like Google and Microsoft, according to a Dec. 12 NPD DisplaySearch report.
This change is forcing display manufacturers, original equipment manufacturers (OEMs) and others in the supply chain to modify 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," Jeff Lin, a value chain analyst for NPD DisplaySearch, said in a statement. "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."
The Quarterly Mobile PC Value Chain Report also maps the relationships between mobile PC brands, OEMs and panel suppliers, and provides information on historical shipments and annual business plans. Apple was the dominant leader in the mobile PC market, with its tablet PC shipments accounting for 84 percent of total mobile PC shipments for the quarter, primarily made by Taiwanese manufacturer Foxconn.
Technology giant Hewlett-Packard (HP) ranked second in the mobile PC category, which includes notebooks, tablets, and ultra-slim PCs. Quanta captured the largest portion of HP's overall production (about 33 percent), and LG Display led in mobile PC panel shipments during the same period.
"The shift to touch notebooks and ultra-slim devices will be key areas of focus for Apple's mobile PC competitors in 2013," said Lin. "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 foolproof, cost-down solutions."
HP, Lenovo, Samsung, and Acer have cut prices on their ultra-slim notebooks as they hope to beat the competition, Lin added.
Foxconn led in mobile PC OEM production volume in the second quarter of 2012, with more than 85 percent of its production volume coming from Apple's new 9.7-inch iPad and iPad 2. In that same quarter, Quanta started producing the Google 7-inch Nexus tablet.
"With 2013 business planning well under way, product portfolios, sales strategies and sourcing plans for mobile PC brands will certainly impact the supply chain," said Lin. "Overall, the top 10 PC brands' 2012 year-over-year growth rates are forecast to increase only 2 percent for notebook PCs and fall 28 percent for mini-note PCs."
However, growth for tablet PCs is still strong at 75 percent, Lin added.
"Looking ahead to 2013, business plans for the top 10 PC brands are set higher, with a 16 percent year-over-year shipment increase on average for notebook PCs," said Lin.
Tablet PC growth will maintain its strength but may be "less impressive than in 2012," he predicted.
In a related report, Sterne Agee analyst Shaw Wu wrote in a Dec. 12 research note that supply constraints will likely occur on Apple's recently released iPad Mini and lower builds for the fourth-generation iPad, likely due to some cannibalization from the iPad Mini. The report noted, however, that iPad Mini demand remains strong despite the supply constraints.