© anatoly abyshev dreamstime.com Components | December 14, 2012
Component replacements to potentially give rise to lower-than-$150 USD Tablet PCs
Tablets, which rank high on many consumers’ shopping lists, have become an undisputed highlight for this year's peak season, with cheap, under-$200 USD devices such as Nexus 7 and Kindle Fire HD poised to gain major attention within the market.
Considering how Google and Amazon are able to resort to advertising costs and other means to make up for their tablets' low prices, the PC vendors who traditionally rely on hardware sales for profit will be in for some serious competition. TrendForce's research has indicated that as far as hardware costs go, the 7-inch tablet retail prices are unlikely to drop any lower than the current pricing mark. The replacement of key component parts, at the moment, serves as the only viable option for PC-branded manufacturers who are seeking to reclaim their market positions through low-pricing strategies. Up to $25 USD Saved by Changing Display and Touch Module Components Given that the display panel and touch module both account for approximately 35~40% of a tablet's total material cost, they are, naturally, major targets when it comes to controlling manufacturing costs. With the price drops associated with the 7-inch FFS panels halting due to production yield issues, 7-inch TN panels have now become one of the cheapest display alternatives available. One point worth noting, though, is that the TN LCD's viewing angle is vastly inferior to the FFS's. In order to allow consumers to move their tablet freely and without experiencing visual-based constraints, TN display panels are generally accompanied by Additional wide view angle compensation film. When the TN panel is applied in place of an FFS panel, the total saved cost is estimated to be over 50%. For the touch screen, the current modules utilized by mainstream 7-inch tablets have either a G/G or OGS structure, both of which are over $20 USD and are burdens for cost-conscious manufacturers. A new touch screen alternative currently gaining a lot of attention is the G/F/F solution. While G/F/F loses to the glass-based structures in terms of Transmittance and touch sensitivity, the G/F/F structure's cost is about 70% cheaper than the latter's. Through the replacement of TN panel and the G/F/F touch module, a tablet will be able to trim off an estimated $25 USD from the overall cost. Alternative Memory Components to Help Save 60% Memory Cost When it comes to minimizing memory component costs, commodity DRAM is perceived as an ideal option. Compared to 1GB mobile DRAM, which is around $10 USD, 1GB commodity DRAM costs only around $3.5 USD, approximately 65% less than its mobile counterpart. Using low priced, $100 USD tablets as the basis of calculation, the proportion of production costs accounted by mobile and commodity DRAM translates directly into 10% and 3.5%, respectively. Given that the type of DRAM used affects only the standby time as far as user experience is concerned, in order to lower the cost of future tablets, more and more manufacturers are likely to turn to using commodity DRAM in the future. With regards to NAND Flash, as mainstream tablets tend to use the eMMC solution, eMMC pricing and densities have become two crucial factors that affect manufacturing cost. The density used by many branded tablets usually begins at 8GB, whereas for the higher-end tablets, the densities can be as high as 32GB or 64GB. With 8GB and 4GB eMMC costing at $6USD and $4USD, respectively, the 4GB version is likely to be preferred choice for many manufacturers, in particular those hoping to keep BOM under $99 USD. Given factors such as pricing and consumer expectations, the momentum of the 4GB eMMC is expected to continue into 2013. In the CPU department, provided that the low-priced tablets utilize processor components from China-based manufacturers, Trendforce estimates that the cost per chip will only be around $12 USD, which is approximately half the amount of the high-end tablets' $24 USD-range processors. Whether the potential low cost tablets will indeed become a major hit remains to be seen, as much of their quality and specs will likely be affected by the costs of the materials used. Nonetheless, should PC branded manufacturers release tablets that cost less than $150 USD, this will certainly put a lot pressure on China's white-box tablets makers, and in turn intensify the pricing competition within the 2013 tablet market.
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