Intel high on tablet spree

Intel managed to sell 10 mn tablets in 2013. Currently there are 12 smartphones and 15 tablets that run on Intel processor

It might have missed the smartphone bus but making it sure to catch the tide over tablets which is soon promising to engulf the mobility scenario worldwide. Intel has planned to sell 40 mn tablets worldwide and in doing so has invested itself wholeheartedly to win the tablet show.

So, how Intel intent to achieve this growth? Apart from multi-year agreements with Dell, Lenovo, Asus, Acer and Foxconn to expand the availability of tablets with Intel Atom processor and communication platforms, Intel is also eyeing local manufacturers, be it Shenzhen province of China or Indian manufacturers. Narendra Bhandari, Director-Asia Pacific, Intel, says, "We are looking at multiple tablet makers in the Shenzhen province of China who will have Intel processors." The US chip maker is wooing lesser known ‘white box' vendors in Shenzen for its tablet chips. Few have heard Chinese tablet brands like Emdoor, Vido or Onda. These are the very names that Intel is after to expand its tablet market reach.
In India too Intel is piggy banking on local manufacturers. "We are working closely with OEMs like Simtronics, Lava, Micromax and Karbonn to drive the tablet sale. We are also working on their go-to-market plans," said Suryanarayanan B, director sales, Intel South Asia.

Simmtronics hopes to be a prominent player in tablet space in 2014. Smarth Bansal, brand manager, Simmtronics, wrote in an email to DQ Channels, "In 2014 we are targeting a market share of 25% from 10% current market share. We are targeting to sell 1 mn tablets in 2014." It claims to be the biggest manufacturer of tablets in India with a capacity to produce 3 lakh tablets every month.
Indian consumer market being vast OEMs is targeting tier-2 and -3 cities with their budget tablets. For sure, the market remains unexplored and the tablet show is slowly catching up. Intel is keen on having its present in every range of tablet price bands as is put by Narendra Bhandari himself, "We would like to be present in every price bands and range of tablets that the market has to offer".

INTEL AS A STRATEGY PLAYER
Suryanarayanan B, told DQ Channels that Intel is participating in building marketing strategies with vendor companies in pushing the tablet sale across the globe. "We are jointly working with vendors to chart our go-to-market strategy," said Suryanarayanan B.

And what exact strategies is Intel charting with tablet OEM's? Rajendran S, Chief Marketing Officer, Acer explained how Intel is closely working with them in positioning the tablet category before Indian consumer. "For the Acer Iconia tablets with Intel's Baytrail processor, both the companies worked jointly to deliberate our strength in the BFSI sector, and enable some seeding units in some leading banks. In the commercial space this is the typical approach we take. When the sector is new for us we look at seeding, evangelizing and positioning the technology along with Intel," explains Rajendran. Not only for commercial space but also for consumer business Intel plays its role. "In LFRs like Chroma, Reliance etc, we engage with Intel again to position our product category correctly."

Intel and Acer work hand-in-hand and makes lot of investments so that the on-floor person in these stores are cued in correctly to tap the potential customer and talk the right language. In IT speciality stores or Acer branded stores which could be either an Acer exclusive store or a multi-brand store having an Acer point. In this space again Rajendran says, "We work with Intel. Not just in terms of training and positioning the product but also running incentive programs based on the potential and catchment area of a particular city. And keep in mind the driving numbers for incentive programs. Again in online platforms also we work with Intel for the right promotion and presence."

For Asus too the Intel plays a crucial role in forming marketing strategies. As wrote to The DQ Channels over an email by Peter Chang, "Intel and ASUS co-work closely this year to launch the tablet product, and we want to target the complete tablet segment with 3G & calling function". Asus says that with Intel's contribution towards performance, it would like to make its device different from the market.

INTEL PAYING FIRMS TO USE ITS CHIPS?
The news might sound murky but it isn't so. Intel has termed it as ‘contra revenue' in November last year at its investor meeting. Its Chief Financial Officer Stacy Smith said about ‘contra revenue' I the meeting. The bottomline is: Intel is paying tablet makers to adopt its Bay Trail Atom chips because it needs to catch up. Though vendor companies remained silent about it.

HOW BRIGHT IS INTEL'S TABLET DREAM?
On 6th March this year research analyst firm IDC released its tablet market report for 2014. The report predicts a slower market growth of tablet compared to what it witnessed in 2013. The market is expected to grow by 19.4 percent in 2014, down from a growth rate of 51.6 percent in 2013. IDC cut its 2014 growth forecast by 3.6 percent from its previous estimate, and now thinks there will be shipments of 260.9 million units worldwide in 2014.

Owing to a maturing market, stabilizing prices and a decline in low-cost tablets the market will see a slump.

"After years of strong growth, we expect the white-box tablet market to slow in 2014 as consumers move to higher-end devices that work better and last longer," IDC analyst Tom Mainelli said in a statement. "In mature markets, where many buyers have purchased higher-end products from market leaders, consumers are deciding that their current tablets are good enough for the way they use them. Few are feeling compelled to upgrade the same way they did in years past, and that's having an impact on growth rates."

IDC thinks while the consumer market will recede the commercial space will see growth with shipments growing from 11 percent in 2013 to 1 percent in 2014. Much of the commercial and enterprise tablet market so far has been concentrated in verticals such as education, but going forward IDC expects tablets to continue to be sold to small, medium, and large businesses around the world, which IDC said is likely to benefit Microsoft's Windows over time.

However, IDC forecasts that, Apple's iPad and tablets running Google's Android are going to remain dominant. Intel managed to sell 10 million tablets in 2013. Currently there are 12 smartphones and 15 tablets that runs on Intel processor. When this article reaches the readers Intel would have already announced its Q1 2014 earnings on April 15. With still a market share of 15.4% which makes it the top player in the semiconductor industry Intel perhaps surely can achieve its tablet dream.