Demand for affordable devices used to connect to the mobile internet, mostly from emerging markets, is continuing to drive strong sales of what Gartner calls "white-box" smartphones and media tablets in 2014. Gartner expects the white-box smartphone market to grow 50 percent, while the white-box tablet market will experience growth of 15.6 percent.
A typical low-cost white-box device is created by a device manufacturer using a turnkey solution based on application processors and reference designs. The device is targeted at affordable price points in segments across the globe, within the evolving mobile phone and media tablet markets.
According to the latest market study by Gartner, established and emerging Chinese vendors will lead the growth of white-box devices as they refocus to meet the demand for low-priced devices.
In addition, the move to 4G in China and beyond will create new opportunities for Chinese smartphone vendors, starting in late 2014.
"Selling smartphones is no longer a privilege limited to global original equipment manufacturers (OEMs). The maturity of the white-box smartphone ecosystem allows other OEMs to launch an Android smartphone from scratch within a four-week period, making China among one of the fastest-growing smartphone markets," said CK Lu, principal research analyst at Gartner.
White-box vendors can use the turnkey designs to launch white-box smartphones at prices from $50 to $330. These white-box phones are no longer largely sold via unknown/small brands — the ecosystem today is much more organized.
Emerging brands (such as Oppo and Gionee) and established brands (such as Lenovo and TCL) are much more like Samsung and Apple, where they get involved in everything from sourcing to design difference in the use of turnkey chipset solutions.
Gartner also believes that the price of 4G smartphones will reach the price of 3G models by the end of 2014, and become mainstream among white-box smartphones in China by the end of 2015.
The white-box media tablet market will also continue to grow to reach more diversified types of users, from budget-constrained users to replacement buyers in emerging markets, but the speed of growth will slow down over the next five years.
Emerging Asia-Pacific and Greater China are forecast to be the largest consumers of white-box tablets in 2014. Growing user interest in large-size smartphones, or phablets, will impact white-box tablets, especially at the 7-inch size.
Gartner expects the white-box vendors will have to alter their portfolio to adopt this market trend, launching tablets at 8-inch screen sizes and larger, or to integrate cellular functions at 7 inches to compete with phablets at 7 inches and smaller.
There is no doubt that device manufacturers in China are already well positioned to drive the next wave of internet user growth, furthering the onset of the Mobile Internet era -- by essentially enabling the next billion people to participate in the Global Networked Economy.