As PC sales remain sluggish, analysts expect Taiwanese vendors Acer and Asustek Computer to try to seize today's changing tech market with low-end Android tablets, for which consumer demand is high.
Acer hopes to ship up to 10 million tablets in 2013, company executives said in a conference call with journalists Tuesday. The shipments will include two versions of the Acer Iconia B1 Android tablet, costing $150 and $179.
Asus has similar ambitions: it expects to ship at least 10 million tablets this year. The company already saw its tablet business grow in 2012 after partnering with Google to launch the Nexus 7 tablet, another low-priced product starting at $199. Since the Nexus 7's release last July, Asus's tablet shipments have reached 5.3 million units, up from the 1.4 million shipped in the first half of the year.
Although both Acer and Asus have released Android tablets in the past, the two companies are showing more optimism for a market that's been largely dominated by Apple's iPad. On Tuesday, Acer CEO J.T. Wang said the tablet supply chain had grown mature enough to support mass-market products.
"In the past few months, there's been some very positive changes," he said in the conference call. "The market is mature, and it's a good opportunity for Acer and other players too."
Consumers are buying up low-end tablets from little known "white box" vendors at prices between $100 to $150. Last year, white box vendors shipped 25 million tablets to users, according to research firm Gartner.
"So far this demand is not being filled by branded vendors," said Tracy Tsai, a Gartner analyst. "For the high-end tablets, it's obviously more dominated by Apple's iPad."
The focus on Android tablets also comes as demand for high-end products running Microsoft's new Windows 8 OS has yet to translate to major sales for Acer and Asus, which rely on PC notebooks as their core businesses. Earlier this month, Asus CEO Jerry Shen said Windows 8 acceptance was still low among consumers.
"We think consumers will choose to buy a low-price tablet," said Dickie Chang, an analyst with research firm IDC. "Many already have a notebook, they already have a desktop and a smartphone, so they want something different."
Other PC vendors are also adapting to the new consumer trend and releasing low-end tablets. In China, Lenovo is the second-largest tablet vendor behind Apple, with a 14 percent share. It reached that position in part by selling 7-inch Android tablets priced as low as $175. U.S.-based Hewlett-Packard last month also unveiled a 7-inch Android tablet, the HP Slate 7, that it will sell for $169.
Analysts expect budget 7-inch Android tablets will become increasingly common in the market, given the declining manufacturing costs to build the devices. Low costs means revenue can be generated from the tablets. But also important is keeping the company brand's relevant among consumers by launching new attractive products, said Gartner's Tracy Tsai.
"Vendors have to adapt to the trend and expand their profile, otherwise they will lose out on the opportunity of where the market is moving," she said.