China's Allwinner Outsold Intel, Qualcomm In Tablet Processors In 2012

An anonymous reader writes "ARM licensee Allwinner sold more application processors for tablet computers in 2012 than Intel and Qualcomm put together, according to this EE Times article that references market researcher Strategy Analytics. Overall one in five tablet processors was provided by a Chinese vendor in 2012, according to the article, partly because they sell chips at half the price of similarly specified chips from better known vendors."

Comments

This is called dumping

[Reverand Dave]

This issue has been called into account by electronics manufactures in the western world against eastern manufacturers for decades. Basically, they are selling at or below cost to suck up market share. We (N. America) used to complain a lot louder about it until we started making all of our shit there too. However, popularity does not indicate quality. Just look at the millions of shitty pop records on the market now.

Re:This is called dumping

[Anonymous Coward]

People discount "Chinese hacking" stories, but I do remember how the US solar industry got utterly destroyed. First the solar companies were complaining about intrusion attempts and showing logs about attacks. Six months later, out came the panels from China that cost less than it took to gather the rare earths to dope the PV silicon.

Congress saved Harley from being curbstomped when foreign competitors came out with better products. Of course, something as critical to US national security as distributed energy availability [1] gets completely ignored as a "liberal" issue.

[1]: Distributed energy can be an important from a strategic point of view -- it means that a power line taken down means less of a disruption to the grid. However, oil independence seems lost on people in DC.

Re:This is called dumping

[alen]

apple and samsung don't sell their phones at a loss

the carriers pay part of the cost and add it to your service plan

Re:This is called dumping

[Cenan]

Undercutting competition is pretty much the definition of the hallowed free market. He who can sustain the loss the longest wins, that shouldn't surprise anyone.

Re:This is called dumping

[poity]

That's not entirely comparable as the Xbox division is one of MS's most profitable in terms of revenue/expenses. If Xbox division were operating at a net loss then you'd have an argument. Of course, we'd also need data on these Allwinner supplied manufacturers before we can say whether or not they are dumping. I'm not sure it's that clear cut this time compared to what was done previously in the solar industry.

Re:This is called dumping

[ebno-10db]

Apparently you didn't even take your own argument seriously enough to maintain a straight face.

My, aren't we solemn. If making a joke invalidates all serious points, then I've never made a serious point in my life.

Re:This is called dumping

[ebno-10db]

That's not exactly the same thing. In the cases of consoles and cell phones they are simply shifting the cost to licensing and service plans respectively. It is a valid business strategy. Dumping is more about taking the hit long enough to drive your competitors out of business. That is simply anti-competitive.

Correction of your first sentence: it isn't even close to the same thing. Everything else is dead accurate.

Re:This is called dumping

[ebno-10db]

This is why the natural monopoly myth is so flawed.

This has nothing to do with natural monopolies. That applies to things like a municipal water supply, because it's utterly impractical to build multiple "competing" sets of water mains under the streets.

If and when they raise prices back up, consumers and investors won't stick around ... they compete against the whole of society which at any time has numerous entrepreneurs and capital investors eager to make a buck. They will jump at any chance they see in faltering or manipulative businesses.

So sayeth simple minded economists, who ignore things like barriers to entry. Hint: semi fabs cost a lot of money. They require a lot of expertise. They cannot frictionlessly pop into and out of existence like so many hot dog stands.

Re:This is called dumping

[ShanghaiBill]

Look at video game consoles, Sony (They be Japan) and Microsoft (American) sold their consoles at losses.

Selling consoles at a loss actually makes sense because the company doing it owns the IP and there is a "lock-in" effect once games are developed for the console.

Dumping by Allwinner makes no sense, and there is no reason to believe that is what they are doing. The IP is owned by ARM (a British company) and there is no "lock-in": phone/tablet can easily switch since the software is compatible.

Dumping accusations are almost always BS from a competitor clamoring for protectionism and subsidies. If the dumping was a real concern, it would be consumers that complain, rather than competitors. Allwinner is gaining market share because they keep their costs low, manufacture high volumes, and accept modest profit margins. They are winning because they deserve to win. If their competitors don't like it, maybe they could, you know, like ... compete.

Re:This is called dumping

[Bert64]

The xbox division ran at a huge loss for many years before it ever turned a profit...

Re:This is called dumping

[lkcl]

Basically, they are selling at or below cost to suck up market share.

no, they're not. they're a profit-maximising company, just like any other profit-maximising company. if they did what you're accusing them of doing, they'd go bankrupt.

what we believe they have done is just said, "right: we're going to aim BIG". rather than be scared shitless of the NREs for processor development, they simply decided that they would aim for an extremely large number of processors, and either got a PRC Govt Grant or just got very very good investors. they would then have negotiated an EXTREMELY good rate with one of the fabs, based on the projected volume, and that alone would allow them to sell at the price that they set out to sell at. especially if they placed a cash order for a vast number of chips.

so it's simple economics and sound business sense that has allowed them to sell a 1ghz processor at $7.50 when all *PREVIOUS* competition *INCLUDING COMPETITORS IN CHINA* were selling at around $11 or even $13 for a product that had less features.

the other thing that has allowed them to take the world by storm in this area is the extremely high level of integration in their SoC, as well as working with (i believe they actually own) X-Powers to create an exceptionally low-cost and highly optimised Power Management IC, called the AXP209. the cost of this PMIC is $1.50 in volume.

basically you can get away with $30 worth of parts to do a seriously good little board, which has 1gb of RAM, 4gb of NAND Flash, ethernet, SATA, USB2 and HDMI and more, when everyone else is struggling to hit $35 to $38. that's a big, big difference in this kind of market, and it explains why, when the Allwinner A10 was introduced, that a major recession occurred INSIDE CHINA, in the Electronics District of Guangdong, Shenzen.

i'll say that again, in case you didn't understand. whilst you are accusing China (the country) of "price dumping in the USA", *one very ambitious young company* managed to cause a MAJOR RECESSION IN THEIR OWN COUNTRY.

why is that? it's because the electronics industry in china is critically dependent on and focussed on volume sales. the Allwinner A10 and its associated PMIC and high level of integration left many factories holding out-of-date stock. companies that did NOT move over to the A10 in time were left with stock that they couldn't shift. if they did shift - reneging on contracts in the process, in many cases - they left the SUPPLIERS holding the stock, and i don't know if you're aware of this but China basically operates on a cash-only, cash-up-front basis.

the shift caused by the introduction of the A10 was so vast, and so quick, that it basically wiped out any company that didn't change over in time. including the ODM company that we were talking to at the time, whose clients (factories) all had invested in AMLogic's $13 processor at the time.

so - please do be better informed before making assumptions and accusations such as those which you are making, ok? the country you live in is a very small market compared to china. america is not even particularly relevant, here, because americans expects bigger, better and much much faster than a 1ghz single-core low-power ARM processor. please take more care, ok?

Re:This is called dumping

[ebno-10db]

ShanghaiBill: Dumping by Allwinner makes no sense ... The IP is owned by ARM (a British company) and there is no "lock-in": phone/tablet can easily switch since the software is compatible.

There's even less lock-in for commodity memory parts, yet the Japanese were dumping those parts back in the 80's. Years later they admitted that's exactly what they were doing.

ShanghaiBill: Dumping accusations are almost always BS from a competitor clamoring for protectionism and subsidies.

Do you have any evidence for such a broad statement, or are we just supposed to accept your assertion at face value?

ShanghaiBill: If the dumping was a real concern, it would be consumers that complain, rather than competitors.

WTF? Why would the consumers complain? I'm dying to hear that explanation.

ShanghaiBill: Allwinner is gaining market share because they keep their costs low, manufacture high volumes, and accept modest profit margins.

Keep their costs low? Semi fab is almost all capital costs, and the equipment costs are the same around the world. The only way to keep costs low in that situation is sweetheart loan rates and government loan guarantees.

Manufacture high volumes. Please name a digital semi fab that doesn't manufacture in enormous volumes. That's the only way you can amortize the cost of a multi-billion dollar fab.

Accept modest profit margins. Please provide a comparison between Allwinner's and their competitior's profit margins. For bonus points, please explain why you would believe the accounting statements of any Chinese company.

Re:This is called dumping

[AmiMoJo]

There is another factor. Chinese OEMs naturally prefer Chinese parts. I say naturally because the datasheets are available in Chinese (not badly translated from English either) and they can deal with local reps and distributors.

Let me be clear that it isn't racism or anything like that. Allwinner is just providing a good service to Chinese companies. Intel doesn't have the networks or the Chinese staff to match it.

Re:This is called dumping

[lkcl]

There is another factor. Chinese OEMs naturally prefer Chinese parts.

you're right... and yet this should not surprise anyone. insert "country X" for "Chinese" and you'll get the same answer. in fact, i think you'll find that "company X prefers to work with parts that are sourced locally".

I say naturally because the datasheets are available in Chinese (not badly translated from English either) and they can deal with local reps and distributors.

with the rhombus tech initiative, we're doing ok. just :) it is extremely hard though. luckily i've been picking parts that are clearly and obviously commonly available, done in volumes so huge that the datasheets leaked in some cases years ago out onto the internet.

but yes: it's much easier to just pay a chinese PCB design house and say "make this please" :)

Re:This is called dumping

[Anonymous Coward]

It's the very definition of capitalism.
Trying to prevent Chinese companies from doing that would be called socialism.
Let's see all those right-wing Americans try to wiggle out of this one.

so?

[Cenan]

The article mentions 20% volume market share, that's pretty much the chineese share of the world's population. Congrats, you've retaken your own market, good for you guys.

The article also mentions that Apple has a 48% revenue share. What the fuck guys. Pick a measure and stick to it. All that tells us is that Apple phones are probably more expensive per processor than their competitors. Big surprise.

Move the goal posts and declare victory!

[MachineShedFred]

So wait, they beat the single-digit of designs that used Intel Atom and failed, combined with the almost nothing of Android tablets not made by Samsung?

How impressive!

Re:Move the goal posts and declare victory!

[h4rr4r]

The rest of the Android category belongs to Nvidia.

They compared to two companies that sell tiny amounts of Tablet CPUs.

Re:So what?

[amiga3D]

Samsung is manufacturing those in Texas. Technically that is in the US although the residents there seem to think differently.

As of August 2012,[18] the A5 is manufactured at Samsung's Austin, Texas factory. Samsung invested $3.6 billion in a facility in Austin to produce chips such as processors, and nearly all of that wing's output is dedicated to Apple components.[19] Samsung has invested a further $4.2 billion at the Austin facility in order to transition to a 28 nm fabrication process by the second half of 2013

Allwinner is a winner.

[Robert Frazier]

I have a couple of tablets with Allwinner A10 SOC. Even better, there are development boards available with SOC, and some of them are Open Hardware, well documented boards. If you look at Wikipedia's list of Single Board Computers,
you will find the Allwinner on a number of development boards, such as the A13-OLinuXino, Cubieboard, Gooseberry, and Hackberry. In addition to Allwinner tablets, I have a couple of Raspberry PI SBCs. I'm hoping to get one of the Allwinner based development boards in order to see how it compares to the Raspberry.

Best wishes,
Bob

Re:Allwinner is a winner.

[Andy Dodd]

The GPU isn't the problem. It's the fact that Allwinner still hasn't created an Android OMX stack for their hwaccel video codecs.

People don't understand that the ARM SoC world is different than the desktop world - in the desktop world, EVERYTHING graphics-related is on the GPU, and it's all blobbed up.

In the ARM SoC world, the graphics subsystem is split up significantly, with a lot of mix-and-match opportunities.

For example, Mali 400MP GPUs are found in a wide variety of SoCs - Samsung Exynos4, Allwinner, Amlogic chips, Rockchip RK3066, some MediaTek chips, and I think a few others. People say, "when will there be hwaccel on Mali" - the answer is NEVER. This is because hwaccel video decoding is done by separate components in the SoC. In the case of Samsung Exynos, it's Samsung's MFC. In the case of Qualcomm, it's "vidc". In the case of Allwinner, it's CedarX. Amlogic's is just "amplayer" or something like that. FYI, at least the kernel interfaces (albeit not the firmware) for MFC and vidc are open-source, as are OMX stacks for both of those implementations.

You can also see other interesting pairings too - for example, Samsung's MFC engine is very similar between Exynos3 and Exynos4, despite Exynos3 having a PowerVR GPU, and Exynos4 having Mali 400MP.

Samsung's MFC has "good enough" OMX support to do XBMC on Exynos3, 4, and 5.
Allwinner simply has NO OMX decoding solution for Android using CedarX, only their special proprietary player.
Same for Amlogic's amplayer - the only reason XBMC works with Amlogic chips is because XBMC had "special" nonstandard playback support added.

The end result is a lot of people.

Re:Allwinner is a winner.

[Hatta]

It's the fact that Allwinner still hasn't created an Android OMX stack for their hwaccel video codecs

Who said anything about Android? I want XBMC on GNU/Linux.

Re:Allwinner is a winner.

[bill_mcgonigle]

Those people care about whether their apps work or not. Go look at the cheap tablets on eBay and look for how many are advertising that Netflix works (because often it doesn't).

Nobody cares about drivers, but people do care about what drivers enable.

Re:So what?

[pchan-]

These are cheap for a reason, and they're unpopular in the rest of the world for a reason.

The Allwinner chips used in these tablets are all ARM Cortex-A8 based. A Cortex-A8 is basically unfit for a tablet. The lowest end tablets sold by Apple, Samsung, Motorola, Sony, Acer, and Asus 4 years ago didn't have a CPU this slow. Just because they can get away with selling these in China doesn't mean that they are worth anything.

Highly selective metrics

[UnknowingFool]

Allwinner sold more tabletprocessors than Intel and Qualcomm. The report they cite is that Qualcomm is in the top 5 smartphone and tablet processors. As far as I know Qualcomm doesn't do a lot of business in the tablet market because most of their chips are in smartphones. As for Intel, they haven't sold many tablets to date as x86 tablets are not that common. Apple and Samsung are in both smartphone and tablet markets so they should be represented. Am I the only one that thinks this isn't as shocking as it seems?

Re:So what?

[ebno-10db]

Texas. Technically that is in the US although the residents there seem to think differently.

No conflict there - residents outside of Texas agree.

Why not....

[Lumpy]

The A8 and A13 processors absolutely rock and dont require a stupid NDA for you to sign just to get your hands on what is needed to use it.

Re:So what?

[RoverDaddy]

You're thinking of Surface RT. Surface PRO requires an x86 compatible processor, namely an Intel Core i5: http://www.microsoft.com/Surface/en-US/surface-with-windows-8-pro/specifications

Re:Also not stabbing people in the face

[EmperorOfCanada]

I recently ordered an number of identical electrical components from China. $2.00 each shipping included. Even though I entered the quantity in a single line item they all came separated shipped. So each component came from Asia by air, each was in its own bubble wrap, each was labeled, and each had its own package it still came to $2.00. I can't see the component being $2. So minimally China is subsidizing them through shipping.

I am fairly sure that few non-subsidized companies on this planet could warehouse, bubble wrap, package, label and ship broken twigs for $2 a unit and not take a loss.

So even if I had a local magic machine that made these components from air, for free, with no staff; I still could not compete in the North American market. My single advantage would be shipping time. Oh and locally the same thing is around $15.

Re:So what?

[matrim99]

Sometimes a person is perfectly fine with buying and using a toaster instead of buying and using a whole oven.

The same goes for tablets; for casual surfing or communications, a slower, smaller tablet is fine for many people. Those who have tasks that require more CPU power will, of course, purchase different tablets more suitable for those types of tasks. But those uses don't' negate the value of cheap, "lightweight" tablets for other users' uses.

Re: So what?

[iamhassi]

I find that hard to believe. I've owned one of these cheap chinese tablets, and the only thing it ran was a browser and even that was slow. Very few apps ran fast enough to be useable, and the only games that worked were 10+ years old like bejeweled. So while some people might buy these cheap tablets to "try out a tablet", it won't be long before they're throwing it across the room in frustration and wishing they just bought an ipad