Is the $499 to $850 now touted for the third-generation Apple iPad beyond your price range? Well, you can find tablets with comparable feature sets for about a few hundred dollars; however, you may not get as much (maybe no) support or even a warranty with these white box systems.

White box is a somewhat nebulous term that describes custom designed computer systems that come from non-name brand suppliers. These devices are often sold directly from the manufacturer, but in some cases are available through various channels, such as retail stores.

White box vendors try to match the quality and functions of branded counterparts, but at a much cheaper price. The suppliers have taken a variety of approaches to meet this goal. System chips come from Freescale Inc., Intel Corp., and Via Technologies Inc. Many of the systems work with the Google Android operating system, but a few run Linux.

Given the nascent stage of the tablet market, the white box phenomenon is a recent development, but one that has been gaining momentum. “White box systems now account for about 20% of the worldwide tablet market,” stated Richard Shim, an analyst at NPD DisplaySearch.

Customers find a growing list of options. In fact, type the words White Box Tablet into alibaba.com, an electronics ecommerce site, and about 2,600 results pop up.

Why White Box?
White box tabletWhite box options have emerged for several reasons. Supply constraint is one market force. “In China, white box vendors gained traction because Apple initially was not selling the iPad there,” noted Carolina Milanesi, research vice president at Gartner Inc.

Time is needed for vendors to get their products into different markets. In some cases, demand exceeds their ability to execute, opening the door to knock-off alternatives.

White box suppliers typically come from Asia, specialize in Integrated Circuit designer, and have built thriving businesses delivering copycat products. In fact, the Chinese government has actively tried to develop this sector as a major industry by offering tax incentives to suppliers. As a result, China is home to many of the world’s best-known white-box suppliers today.

For instance, Chinavasion offers the Xinc tablet that features the Android 4.0 Ice Cream Sandwich OS and a 7-inch touchscreen with 800 x 480 resolution. The device, which sells for about $125, is powered by 1.0GHz Cortex A10 Multi-Core processor, 512M bytes of RAM, 4G bytes of Flash Memory, and a 3600mAh rechargeable battery.

The Systems
Fuzhou Rockchip Electronics Co. Ltd. sells an Android Tablet with a 7-inch touchscreen and 800 x 600resolution. The product, which costs about $200, is powered by a .6GHz ARM 7100 dual core processor, 128M bytes of RAM, and a 2G byte hard drive.

Ingenic Semiconductor also has an Android tablet, one with a list price of less than $100. The system features a 7 inch screen, a MIPS-based XBurst CPU 1Ghz processor, multi-touch screen, front and rear cameras, integrated Wi-Fi, and support for USB 2.0 and HDMI 1.3.

Visionsoft, a subsidiary of VIA Technologies, has systems costing about $200 and featuring an 800MHz CPU and support for the AVI format, Flash10 playback, and HTML5 video standard.

Buyer Beware
The devices sport warts as well as low prices. “Typically, white box systems force users into some type of system compromise,” explained NDP DisplaySearch’s Shin.

In some cases, they receive less functionality. The screen resolution may be lower, operating systems older, processors slower, and memory less expansive than branded alternatives.

The product quality may be inferior. The suppliers may buy components from fledgling vendors that take shortcuts to reduce pricing. Also, white-box tablet makers may use panels that have been rejected by major brands or purchase end-of-the-lot inventory that component suppliers are trying to clear.

Amenities may be missing. Some suppliers do not offer product warranties. In other cases, their return policy may be skewed to the seller rather than to the customer.

Rectifying such problems may be difficult. “The white box vendors usually do not have strong customer support groups,” noted Gartner’s Milanesi. Even when they do, using it can be difficult because the vendors are typically stationed overseas.

Worth It?
Galaxy Tab 2So customers must ask: Are the potential savings worth the potential risks? Tablet pricing has been dropping. With high-end Android tablets struggling to gain traction in the market, vendors have been cutting pricing in order to move inventory. Also, the emergence of the Amazon Kindle Fire, Samsung Galaxy Tab 2, and rumored Google ASUS tablet have pushed the market in the direction of the white box suppliers’ sweet spot, a few hundred dollars.

Despite those market shifts, the need for white box systems is expected to remain. “White boxes are widely accepted in established markets, like smartphones,” said Gartner’s Milanesi. Here, these systems are sold mainly in emerging economies where cost is key, and finding products can be difficult.

In established economies, they are not as significant a force. “In the US, white-box tablets will have limited appeal: they will be popular with value conscious buyers, such as students, whose choice is based almost exclusively on price,” concluded Gartner’s Milanesi.

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