Chinese tablet PCs peel away at Apple

Updated: 2011-06-03 11:08

By Gao Yuan (China Daily)

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Chinese tablet PCs peel away at Apple

According to analysts, the tablet PC market share of Apple Inc will shrink to about 70 percent in the next six months as more Chinese brands try to grab market share. [Photo / Bloomberg]

BEIJING - Apple Inc may find it harder to retain market share in China's tablet PC market because homegrown brands have been trying to win over more customers, analysts say.

Sun Peilin, an analyst at Analysys International, said Apple's market share will shrink to about 70 percent in the next six months as more Chinese brands try to grab market share.

"Chinese tablet PC makers are trying to form a stronger echelon behind Apple by taking over the market share that belonged to small copycat manufacturers," Sun said.

Apple's iPad and iPad 2 took 78.3 percent of the market share in China in the first quarter of this year, distantly followed by Samsung's 5.1 percent and ErenEben's 4.5 percent.

The volume of tablet PC annual sales in the nation is expected to break 4.5 million units in 2011, data from Analysys International indicated.

Companies, including Lenovo Group, Acer Inc and home appliance giant Haier Group, began to release their own tablet PCs this year.

The rapid increase of Chinese tablet PC makers pushed nationwide sales to 1.04 million units in the first three months of 2011, up 32.5 percent quarter-on-quarter, Analysys International's report showed.

Apple released its WiFi version of the iPad 2 in China on May 6. One of the biggest Apple stores in Beijing announced it was sold out just four hours after the launch, local media reported.

The company's store in downtown Beijing was forced to close after a skirmish broke out amid the frenzy to buy the iPad 2.

Apple sold more than 600,000 iPads in China in the fourth quarter of 2010.

On May 20, a deadly explosion occurred at a Foxconn iPad assembly plant in Chengdu, Sichuan province, killing three workers and injuring 15.

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The accident may reduce iPad production by several hundred thousand in the next month, said Tong Bin, an analyst with iResearch Consulting Group. Foxconn's Chengdu plant accounts for nearly two-thirds of iPad production, Tong said.

"According to our figures, international shipments of tablet computers have grown faster than earlier estimates, especially in China," said Simon Ye, an analyst with the research firm Gartner.

He said that as more Chinese companies enter the field, the competition in the tablet computer market will become much fiercer.

However, Sun from Analysys said the biggest obstacle Chinese brands face is how to come up with a different marketing angle against Apple, which could avert head-on competition with the iPad.

"There are two separate markets for tablets: You can either go entertainment or business. The iPad is a big competitor in terms of entertainment, so Chinese companies should be different from iPad," Sun suggested.

A report released by Analysys International on Monday showed that about 61 percent of cell phone users think the tablet PC is suitable for business occasions, such as business trips, while only 50 percent say they would like to have a tablet for entertainment use.

Some Chinese companies have already made progress exploring a new area for their tablets other than entertainment usage.

Last year, Beijing ErenEben Information Technology Co, a business-usage tablet PC maker, won a government contract to provide its second-generation tablet to the police department in the Guangxi Zhuang autonomous region.

According to Fang Liyong, chief operating officer of ErenEben, the company sold nearly 150,000 units of its first two generations of products in 2010, making it the biggest homegrown tablet PC brand by sales volume.

"We are now selling nearly 30,000 units every month in 2011," he said.

With a touchscreen developed by Japanese graphics-tablets maker Wacom Co Ltd, the ErenEben tablets were designed to offer an experience similar to writing on real paper.

The company believed that a tablet conforming to the Chinese people's writing habits will ultimately occupy the country's high-end business market.

The company plans to release its fourth-generation product by the end of this year, Fang said.

"But we still consider that ErenEben has great growth potential, because China's tablet market is so big, and Apple cannot take it all."



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