CCID Consulting: Low and Mid-end Terminals Boosting Applications Processor Market

BEIJING--(BUSINESS WIRE)-- CCID Consulting (HK: 08235):

Polarized consumption led to a large potential market for low and mid-end tablet PCs.

Since the launch of iPad in January 2010, tablet PCs have swept the world. Small and large vendors in China are all rushing to launch tablet PCs with a similar appearance.

The fiercest competition was seen in the low and mid-end market. In 2011, a total of 59.65 million tablet PCs were manufactured in China. Excluding the Apple Inc. and Samsung products, the number came to 19 million, among which more than 14 million were low and mid-end products, 3.6 times more than 2010’s roughly 3 million.

China’s low and mid-end tablet PCs have the following characteristics:

1. They do not have well-known brands.

2. They are manufactured to be exported;

3. They are generally priced at around RMB 1,000.

Parallel growth of tablet PCs, smartphones and smart TV sets is driving the applications processor market.

As the applications processor market gained momentum from the parallel growth of tablet PCs, smartphones and smart TV sets China’s applications processor manufacturers, leveraging their relatively well-developed terminal industrial chain of mobile Internet in China, have managed to quickly occupy the market and enter the low and mid-end markets both at home and abroad.

In 2011, as all products of Apple Inc. were produced and assembled in China, the annual sales revenue of applications processors for tablet PCs in China hit RMB 5.28 billion, an increase of 252.7% year-on-year.

Figure 1 Size and Growth of China's Applications Processor Market for Tablet PCs, 2010-2011 (by sales revenue, unit: RMB 100 million)

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Source: CCID Consulting, May 2012

Driven by the increasing domestic and global demand for smartphones priced at around RMB 1,000, the production of China’s smartphones has experienced a significant growth in recent years. In 2011, the sales revenue of applications processors for smartphones in China hit RMB 27.53 billion, an increase of 231.9% year-on-year.

Figure 2 Size of China's Applications Processor Market for Smartphones, 2007-2011 (by sales revenue, unit: RMB 100 million)

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Source: CCID Consulting, May 2012

In 2011, the sales volume of applications processors for smart TV sets hit 38.53 million in China, an increase of 690.4% year-on-year.

Figure 3 Size of China's Applications Processor Market for Smart TV Sets, 2010-2011 (by sales volume, unit: 100 million)

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Source: CCID Consulting, May 2012

China's applications processor manufacturers need to shift from competition on ARM cores to overall improvement of performance integration, concept branding and after services.

Although the number and processing capability of ARM cores can determine the basic performance of an applications processor, they are not the only performance indicator. Hardware drive, middleware architecture, development kits and software optimization will also affect the user experience. It is expected that the future tablet PC and smartphone solutions, even those introduced by chipmakers, will attach more importance to the overall performance and software support.

China's applications processor market for tablet PCs will continue to grow from now to 2016, while the growth rate may drop slightly; driven by low and mid-end smartphones, the applications processor market for smartphones will maintain a stable growth; thanks to the demand for smart TV sets, the sales of applications processors for smart TV sets is expected to see a high growth rate in 2012.

Figure 4 Forecasts on Size of Applications Processor Market for China's Tablet PCs, 2012-2016 (by sales revenue, unit: RMB 100 million)

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Source: CCID Consulting, May 2012

Figure 5 Forecasts on Size of China's Applications Processor Market for Smartphones, 2012-2016 (by sales revenue, unit: RMB 100 million)

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Source: CCID Consulting, May 2012

Figure 6 Forecasts on Size of China's Applications Processor Market for Smart TV Sets, 2012-2016 (by sales revenue, unit: RMB 100 million)

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Source: CCID Consulting May 2012

CCID Consulting predicts that China’s production of low and mid-end tablet PCs will hit 38 million units in 2012, and will reach 87 million in 2013, 150 million in 2014, 200 million in 2015, and 250 million in 2016, with an annual compound growth rate of over 30%. As for smartphones, those priced at less than RMB 1,000 will see their market share rise from nearly 30% in 2012 to nearly 40% in 2016.

Figure 7 Sales Volume of China's Under-RMB 1,000 Smartphone Market, 2009-2016

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Source: CCID Consulting, May 2012

About CCID Consulting Co., Ltd.

CCID Consulting Co., Ltd., the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Xi’an, Wuhan and Nanjing with over 300 professional consultants. The company’s business scope has covered over 200 large and medium-sized cities in China. CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services, investment and financing, and M&A. The company's customers range from government departments at all levels and diversified industrial parks, to industrial users in strategic emerging industries in new generation information technology, energy saving and environmental protection, biological science and technology, high-end equipment manufacturing, new materials, and new energy. CCID Consulting commits itself to become the No. 1 advisor for urban economy, the No.1 consultancy for enterprise management, and the No. 1 branch for informatization consulting in China.