The vast majority of tablet computing devices - including the Apple iPad and the Amazon Kindle Fire - are not made by the company whose name appears on the device. Instead they’re made by contract or outsourced manufacturers based in Asia, according to a new report from IHS iSuppli. It’s calculated that around nine out of every 10 media tablets will be outsourced this year.
Last year outsourced manufacturers were responsible for 87.5% of tablet production, with that percentage expected to increase to 89.2% this year. It means just 10.8% of tablets will be made in-house by manufacturers. Similar figures are predicted for the next few years as outsourced tablet manufacturing hits 91.1% in 2015 before falling slightly to 90.4% in 2016.
Jeffrey Wu, senior analyst for OEM at IHS, said “The high percentage of outsourced manufacturing of tablets reflects the choice among tablet brands and original equipment manufacturers - even ones as big as Apple - to refrain from in-house production. Tablet brands use outsourcing for many reasons, including faster time to market; the leveraging of capabilities, especially for firmware development and hardware integration; and asset flexibility that translates into reduced corporate expenditures and lower headcount.”
Taiwan’s Hon Hai Precision Industry, probably best known for its Foxconn brand, is the biggest manufacturer of tablets under contract. It produced 62% of all tablets last year, working closely with Apple on its iPad devices. Conversely, Samsung and Motorola Mobility are among the tablet brands favouring in-house production.