Brokerage forecasts bright future for 7-inch tablets


TAIPEI — Apple Inc. will continue its dominance in the worldwide tablet computer market with its iPad, but other firms making tablets powered by Google Inc.’s Android system might pick up sales in the 7-inch segment, CLSA Asia Pacific Markets predicted recently.

The Hong Kong-based brokerage said it expects the tablet market to reach 108 million units in 2012 and 148 million units in 2013, with Apple holding 63 percent and 50 percent market shares, respectively.

CLSA’s estimates of the market scale do not factor in Apple’s anticipated “iPad mini,” a smaller and cheaper model that is expected to be launched later this year.

Nicolas Baratte, head of technology research at CLSA, said Apple will continue to dominate the 10-inch tablet market with an 81-percent market share in 2012 and 72 percent in 2013, but he added that 7-inch Android tablets are going to take off. “We expect 7-inch tablets to become a large product segment as their utility/cost ratio becomes very attractive at US$250 to US$300,” Baratte said in a research note.

“Android apps for tablets, productivity tools, are still behind the iPad’s in both quantity and quality but catching up,” he added. “As such, Android Tablets volumes could become larger than iPad by 2015, as has happened for smartphones.”

Android tablet makers include Acer and Asustek Computer of Taiwan, as well as South Korea’s Samsung Electronics and U.S. online retailer

CLSA forecast that the 7-inch tablet market will grow to 25 million in 2012 and 45 million units in 2013, up 255 percent and 84 percent, respectively.

The 10-inch tablet market is expected to reach 84 million units this year and 103 million units next year, up 54 percent and 23 percent, the brokerage said.

In terms of supply chain, Baratte said he favors Taiwan-listed printed circuit board maker Zhen Ding Technology Holding, as the company supplies key components for major tablets, including the iPad, Google’s Nexus and Microsoft’s Surface.

Baratte also said he expects Taiwanese touch panel maker TPK Holding Co. to benefit from multiple product launches in the fourth quarter of 2012 and to show short-term momentum, although he expressed concern about competition and margin pressure in 2013.