With the motherboard industry reaching maturity and competition growing fierce, as the vendor, has been aggressively trying to stay competitive in the market by coming up with new innovations to satisfy consumers. The commoditization of motherboard has resulted in structural changes that have concentrated the manufacturing power in the hands of a select few companies.
The decline in the worldwide motherboard shipment volume was lessened in 2013, thanks to the strong enterprise replacement demand in response to Microsoft’s termination of Windows XP OS technical support beginning from April 2014.
In 2014, given the fact that income per capita in China and Brazil have increased and the price gap between desktop PC and notebook PC continues to narrow, more consumers in the emerging markets will opt to buy notebook PCs. It is therefore forecasted that the worldwide motherboard shipment volume will continue to fall in 2014, albeit at a lesser degree.
As per IDC the Indian motherboard market was around 3.2 – 2.5 million units in the year 2011. Due to decline in the PC market and raise in smartphone shipments the expectation to spill its effect on the declining motherboard market. According to Gartner, Inc. the combined desk-based and mobile PC market in India totaled nearly 1.96 million units in the fourth quarter of 2013, a 19.9 percent decrease over the fourth quarter of 2012.
The motherboard industry has reached a high level of maturity, leading to a slowdown in the overall market demand, particularly in Europe and the United States. Even with Intel’s launch of new Haswell processor, the market continued to take a wait-and-see attitude and motherboard vendors put more effort into inventory clearance. However, they found little room to reduce product prices due to the wage hikes in China and the recent appreciation of RMB. To maintain profit margins, motherboard vendors have withdrawn from the strategy of cutting down product prices for higher sales volume. As China and other emerging countries are currently the major markets of motherboards, consumers in these markets are more sensitive to price and have a stronger demand for value-line products over high-end ones.
Meanwhile, as Haswell processors and 8 series chipsets play an important role in Intel’s next-stage product development; they have received much attention in the market. The design flaw, though is minor, has directly discouraged end users from buying. To this end, Intel fixed this bug in late July and delivered updated motherboards to its customers, hoping to minimize the impact and stimulate purchases.
According to Manoj Kriplani, International Sales Div, ASRock Inc, Indian Market this year (Q1-Q2 2014) for Motherboards didn’t turn out to everyone’s expectations and its quite down in comparison to last year (somewhere around 25-30%) and main reason behind this was low demand and no pull from end users. And with Growing demand & popularity of Tablets and Smartphones also added to the low demand for Motherboards. A class cities and now followed by B cities prefers Tablets / Laptops over desktop which provides them with basic computing & internet. But we have some good Hopes from Q3 – Q4 2014 from Indian Market Specially from the High End & Gaming segment which is growing very fast in India.
“Global situation varies some countries have shown double digit growth and some with stagnant or even negative. But overall trend for High End and Gaming Boards is similar, this Market is still growing. We think the reason could be linked to the emerging gaming groups. GAMING market’s potential is quite huge and this is why ASRock continuously devoted to developing real gaming products. As we’re the only mainboard maker that cooperates with a real gamer (World Champion Gamer Johnathan ‘Fatal1ty’) to develop products, we’re confident to claim that ASRock’s gaming series are the only and truly outstanding gaming gears in the market,” Kriplani added further.
“We expect an almost flat year ahead for the Indian motherboard market in general. However, we foresee a growth in market share for GIGABYTE motherboards, because of the consolidation taking place among motherboard vendors, with a couple of major players and also, Intel quitting the motherboard business. Globally, in the past couple of years, the mid market for motherboards has decreased a bit. However, there has been an encouraging growth in both high and low end motherboards because tablets and cell phones have not affected these markets very much. We are seeing customers coming back to the DIY PC, which they see as a customised system for their specific solutions and requirements. We are either No. 1 or 2 in most regions, except in the US because Intel is the market leader there. But now, since they have quit the motherboard business, we are trying to enhance our market share there,” said, Sunil Grewal, Director – Sales and MarCom, GIGABYTE Technology (India) Pvt. Ltd.
“Currently the motherboard market is fairly stable and in terms of numbers H61 being the entry level chipset occupies the largest share in total sales in India followed by 760G chipset. These two are followed by the A55 chipset. B75, B85, H87 and Z87 complete a major chunk of the rest of the pie. In terms of chipset trends, A58 is expected to replace A55 and Z97 and H97 will replace the Z87 and H87 chipset respectively,” said, Vinay Shetty, Country Head, Component Business, ASUS India.
“Motherboard market is at a cusp where lot of changes is happening in terms of products, features, supply chain. Globally the market has saturated & with declining desktop shipments vendors are looking at non-traditional desktop segments like AIO, KIOSK, SIGNAGE, TC based on new & coming form factors,” said, Rajan Sharma, VP – Sales, DIGILITE.
“Globally, the worldwide motherboard shipment volume per year for the period 2014 – 2018 and per quarter for the period 1Q 2012 – 2Q 2014. The decline in the worldwide motherboard shipment volume was lessened in 2013, thanks to the strong enterprise replacement demand in response to Microsoft’s termination of Windows XP OS technical support beginning from April 2014. In 2014, given the fact that income per capita in China and Brazil have increased and the price gap between desktop PC and notebook PC continues to narrow, more consumers in the emerging markets will opt to buy notebook PCs. It is therefore forecasted that the worldwide motherboard shipment volume will continue to fall in 2014, albeit at a lesser degree,” said, Sushmita Das, VP – Business, Kobian Pte Ltd.
“Desktop as a Category is matured and expected to grow in low single digits globally. In India however low PC penetration rates presents a higher potential opportunity provided the ecosystem is able to justify new usage models. We work with Motherboard manufacturers in reinventing this category within the ecosystem and our fortunes are closely tied with the success of this ecosystem,” concluded Chandrahas Panigrahi – Director – Consumer and Mobility, AMD India.
Addressable Market for Brand
According to Das of Kobian India, “The market is not in a growing mode and thus addressable market is limited now. India market still has a varied market for old generation models along with the latest models.”
“We personally believe that we have a big opportunity in India where PC penetration levels are around 7-8%. As per latest Industry estimates DIY market is around 4.5 lacs/qtr. Desktop as a category is a “Family Device” among various mobility devices and will always be part of a household given its benefits like expandability, TCO and longevity. To draw an analogy – Every household has a wall clock and multiple wrist watches. Desktop going forward will be a media hub for all needs,” said, Panigrahi of AMD India.
“We are looking at a 40 crore market currently and as per the trends, expect ASP to get stronger & volumes to decline,” added, Sharma of Digilite.
“Over the last two years the TAM has shrunk considerably and is currently around 450,000 units a quarter. This year, we are targeting around 20% of the total TAM,” said, Shetty of Asus India.
“The DIY market currently is addressable to around 15-18 million a year in spite of the flat growth expected this year. As the PC penetration level in India is still around 6-7 %, we see Class B and C cities as growth drivers for us,” added, Grewal of Gigabyte Technology.
“ASRock did pretty well last year in India Market in terms of numbers & market share. After Intel Exit from MB, we are very much positive and looking forward to Increase our market share,” concluded, Kriplani of AsRock Inc.
Motherboard as individual Component Sale
Motherboard business has always been a lower margin product, but now channel has matured to avoid overstocking and dumping of inventory. “While the assembled PC market is shrinking due to buyers preferring notebooks the exit of few local vendors from desktop manufacturing leaves greater share for assemblers to grab especially in the entry level segment. Also partners have room to specialize in HTPCs / Small Form Factor PCs, gaming desktops and work center PCs for high end professional users where buyers still prefer desktops over notebooks. On the desktop side, consumers are now ready to pay a premium for gaming PCs. Mini-ITX form factor is also now seeing a viable market because of various thin client applications like PoS. We’ve seen a strong growth in graphics cards business and are expecting graphics cards attach ratio to double in the next two years. Within the desktop pie, there is also an increase in the midrange segment. Desktops are now transitioning to a more solution based role and being viewed as the central data storage / download device or the principal device with a plethora of gadgets creating the users’ tech ecosystem around it. Growth rate for assembled systems can be estimated at 6% and it will be the same for the motherboard market,” said, Shetty of Asus India.
“The overall assembled market may remain stagnant rather than grow, but with new segments opening up & supply void being created by exit of established players, it may give potential to grow for local brands like DIGILITE,” point out Sharma of Digilite.
Panigrahi of AMD India hope, the industry forecasts estimate growth in single digits for DIY market and motherboards will follow similar trends. Similarly, Das of Kobian India expected, “The desktop assembled systems shall be sustaining at a fixed market ratio and the demand on individual component shall remain but at a declining graph.”
“We see lots of potential & demand from Gaming Motherboards in coming years,” said, Kriplani of AsRock Inc.
“We foresee a flat growth for the DIY market this year. As you are aware, leading OEMs, such as Wipro, HCL and Zenith have all wound up their PC division. So definitely we can expect a steady demand for assembled systems in the future,” concluded, Grewal of GIGABYTE Technology (India) Pvt. Ltd.
New Form Factor
Today, the new desktop form factors follow a market that values small, cheap, and quiet over large and customizable — and it’s bad news for DIY PCs. Expansion slots and drive bays were the first to go: heck, they can make computers so big they barely fit under desks. Computer makers then shrank things further by putting features like graphics, networking, USB, and audio directly onto motherboards.
Smaller PCs are physically harder to access: getting inside a small form factor PC can require the dexterity (and even the tools) of a jeweler. More importantly, there’s little users can change about PCs built on tiny, feature-packed motherboards. Most components are soldered in so they can’t be swapped or upgraded. And without expansion slots, there’s no way to (say) install graphics that can handle high frame-rate PC games or add USB 3.0 connectivity for speedy backups.
“We all realize that the compact IT products generate huge responses around the world, changing the average user’s computing behavior. This is why ASRock pays special attention on developing new Mini-ITX and Thin Mini-ITX mini-sized motherboards. The recently-launched Intel Bay Trail Q1900TM-ITX with ultra thin form factor that allows users to build up the most compact AIO system with rich functions,” said, Kriplani of AsRock Inc.
“In the past, we have seen laptops, tablets, and smart phones taking away the PC market share to an extent. The current trend shows there is a demand for compact, mobile options for digital devices. To converge the computing devices with compact size, these new form factor devices will definitely see growth in the future,” said, Grewal of Gigabyte Technology.
“The currently selling form factors are the same as before i.e. eATX, ATX, microATX and miniITX. There are no new form factors however; mini-ITX form is picking some more traction owing to greater demand for SFF PCs and HTPCs,” added Shetty of Asus India.
“New segments & opportunities like AIO, KIOSK, SIGNAGE, ThinClient, high-end gaming, workstations, white label ATM have given new big growth in small form factor (SFF) sales for DIGILITE,” said, Sharma of Digilite. “It’s in line with the Chassis design and lower power usage,” added, Das of Kobian India.
“Driven by newer usage, Functionality, Looks and evolving business models new form factors like miniature PC’s/Gaming/AIO are evolving,” concluded, Panigrahi of AMD India.
Issue on Energy Efficiency
“Energy efficiency is a very crucial feature for motherboards and ASUS was one of the first companies to implement energy efficiency inside a motherboard as early as 2007 with our EPU technology. The whole EPU system revolves around a unique control chip called EPU – Energy Processing Unit. The ASUS EPU (Energy Processing Unit) provides total system power management by detecting current PC loadings and intelligently moderating power in real-time. It automatically provides the most appropriate power usage to save power and money,” says, Shetty of Asus India.
“Use high quality components, ensure our motherboard models pass DGS&D ESD criteria, work only with Tier I components supplier for capacitors, use above average port protection. these approaches give us right direction to implementing energy efficiency inside a motherboard,” said, Sharma of Digilite.
According to Das of Kobian India, “We are promoting energy efficient components and design for the optimum energy computing.”
“ASRock is greatly focused on developing eco-friendly motherboard products in recent years. We tried to implement power-saving components to increase energy efficiency. Such as the newly-released Q1900DC-ITX and AM1H-ITX mainboards are both equipped with a DC power input connector. The boards can be powered by DC adapter instead of traditional PSU, thus allowing the system to reduce power consumption by a maximum of 50% when idle mode. The key differentiator here is the power-saving DC-In specification,” asserted Kriplani of AsRock Inc.
“GIGABYTE has always introduced industry-leading, energy-saving technologies in the past like Dynamic Energy Saver that incorporates a host of intelligent features that use a proprietary hardware and software design to considerably enhance PC system energy efficiency, reduce power consumption and deliver optimized auto-phase-switching for your PC components. We use quality components like high Capacity Power Stages and Ferrite Core chokes rated up to 60A with GIGABYTE exclusive 2x Copper PCBs to provide the most stable power delivery. The Ultra Durable 5 technology features a range of high current capable components that provide the highest quality power delivery to the CPU for record-breaking performance, cool and efficient operation and extended motherboard lifespan. Less operating temperature means more durability and stability of the motherboard. The newly launched GIGABYTE 9 Series motherboards, based on the Intel Z97/H97 chipsets, come with Solid State capacitors that are rated to perform at maximum efficiency for a guaranteed minimum of 10K hours. Their newly designed heat sink ensures maximum heat dissipation,” concluded, Grewal of GIGABYTE Technology (India) Pvt. Ltd.
Key Differentiating Factors of Brand
Innovation is definitely the key to lead in the market. Unlike other motherboards, which may seem lifeless and boring with cold hard specifications or marketing gimmicks. “ We strive to differentiate ASRock motherboards by making them more customized. We’re going deeper into three different routes. The Gaming series will accompany hardcore gamers in endless battles, while the Overclocking series will assist overclockers break world records, and the Extreme series will satisfy the tech savvy. We will also provide a wider selection in price and features, so that everyone can find his/her own motherboard. And now we are also out with Exclusive feature called ASRock Cloud, which gives the freedom to access your desktop anytime and anywhere in the world from your Mobile devices, one can also upload and download stuff from desktop using remotely through your mobile devices and this all in FREE only on purchase of ASRock MB. ASRock always believes in giving more & more features and extra protection to its end users. That’s what makes us different than other brand,” said, Kriplani of AsRock Inc.
The consistency of a brand is the best brand promotion. The IT market has witnessed upsurge of various brands and their vanishing from the market too. “We have a number of differentiating factors compared to other motherboard brands. Like the GIGABYTE DualBIOS, an exclusive technology from GIGABYTE that protects the BIOS. GIGABYTE DualBIOS means that your motherboard has both a ‘Main BIOS’ and a ‘Backup BIOS’, making users protected from BIOS failure due to virus attack, hardware malfunction, improper OC settings or even power failure during the update process. Or, the presence of one fuse per USB port. With the latest 9 series motherboards, we have completely redesigned the heat sink components to ensure power efficiency. GIGABYE 9 Series gaming motherboards are the only motherboards providing 4-Way SLI and 4-way CrossFire extreme graphic card support. In the gaming series, GIGABYTE is the only DIY motherboard with audio OP-AMP technology. As part of the GIGABYTE 9 Series Overclocking (OC) series, we have launched three models – GA-Z97X-SOC, Z97X-SOC FORCE and GA-Z97X-SOC Force LN2. These come with a unique feature named GIGABYTE OC Touch that includes a range of hardware OC buttons directly on the motherboard, making overclocking on the fly extremely fast and easy. Also, in our 9 Series motherboards, we are using a newly designed hardware setup supported with completely redesigned GIGABYTE APP Center software that gives you an easy access to a wide range of apps that help you get the most from your GIGABYTE motherboard. Among several such apps in the GIGABYTE APP Center are HomeCloud that allows you to share the files between your smart phone / tablet device and computer or back up the files from the device to the computer; and Remote OC that allows you to remotely control their desktop PC with a powerful suite of software functions that Include overclocking and system tweaking, system monitoring plus the ability to also remotely power down/reset the PC when needed,” says, Grewal of GIGABYTE Technology (India) Pvt. Ltd.
“In terms of end user acceptability and brand perception, we’re positioned as the leading brand and are known for our quality, innovation and unique features of our motherboards. We’re also the first motherboard brand to have our own gaming range of products – the ASUS Republic of Gamers line which has garnered a cult status over the years. ASUS motherboards have propelled computing forward with pioneering inventions. These include DIGI+ VRM digital power conversion, Dual Intelligent Processors for combined performance boosts and energy savings, and the unique whole-motherboard heat protection offered by the company’s Thermal Armor and Thermal Radar architectures. Additional exclusives such as Core Unlocker, Disk Unlocker and Protect 3.0 further demonstrate the ASUS commitment to harmonizing technical ingenuity and environmental responsibility with care for the people who actually put technology to use in everyday life. Apart from these factors, ASUS is also the only brand with a complete product portfolio when it comes to customers’ computing needs right from motherboards, graphics cards, monitors, optical drives, sound cards, wireless routers to laptops, mobile phones, tablets, media players, all-in-one PCs,” said, Shetty of Asus India.
Sharma of Digilite says, “local supply chain, strong distribution with INGRAM MICRO, SEPL, RIL , 100+ locations post-sales support, experience of shipping 10 million motherboards from our factory, latest & full specifications products, being a established supplier to local OEM & even MNC.”
“Mercury is a well-known brand in India for Computer Peripherals for over two decades. Motherboards are one of the prime products of Mercury in India. Mercury Motherboards have been No 1 in the 3rd party chipset boards in India for many years. We are still among the Top 3 brands in 3rd party chipset Motherboards. We have a 12-15% market share in Motherboards today. Mercury has been a quality product and synonymous to Motherboards for over two decades in India. Kobian has been awarded as the ‘Most Trusted Brand’ for various products by renowned Indian media partners in the past years. We are amongst the very few who provides complete service backup and after sales service for Motherboards of the current and the old generation too,” concluded, Das of Kobian India,” concluded, Das of Kobian India.
Mr. Vinay Shetty, Country Head, Component Business, ASUS India.
“Energy efficiency is a very crucial feature for motherboards and ASUS was one of the first companies to implement energy efficiency inside a motherboard as early as 2007 with our EPU technology. The whole EPU system revolves around a unique control chip called EPU – Energy Processing Unit. The ASUS EPU (Energy Processing Unit) provides total system power management by detecting current PC loadings and intelligently moderating power in real-time. It automatically provides the most appropriate power usage to save power and money.”
“We strive to differentiate ASRock motherboards by making them more customized. We’re going deeper into three different routes. The Gaming series will accompany hardcore gamers in endless battles, while the Overclocking series will assist overclockers break world records, and the Extreme series will satisfy the tech savvy. We will also provide a wider selection in price and features, so that everyone can find his/her own motherboard.”
Mr. Sunil Grewal, Director – Sales and MarCom, GIGABYTE Technology (India) Pvt. Ltd.
“In the past, we have seen laptops, tablets, and smart phones taking away the PC market share to an extent. The current trend shows there is a demand for compact, mobile options for digital devices. To converge the computing devices with compact size, these new form factor devices will definitely see growth in the future.”
Mr. Rajan Sharma, VP – Sales, DIGILITE
“The overall assembled market may remain stagnant rather than grow, but with new segments opening up & supply void being created by exit of established players, it may give potential to grow for local brands like Digilite.”
Mr. Indrajit Sabharwal, Managing Director, Simmtronics Semiconductors
“Simmtronics is one of the exclusive manufacturers of motherboard in hardware industry from over last 20 years. Simmtronics has five manufacturing facilities globally within house R & D and testing facility. We strongly believe in creativity, innovation and R&D. All these have helped us grow our business multi-fold. We are fulfilling our commitment to provide the latest main stream motherboards. We are able to control the quality of the motherboards. We have stringent quality checks before we send out these motherboards for sale.”
Mr. Chandrahas Panigrahi – Director – Consumer and Mobility, AMD India
“Desktop as a Category is matured and expected to grow in low single digits globally. In India however low PC penetration rates presents a higher potential opportunity provided the ecosystem is able to justify new usage models. We work with Motherboard manufacturers in reinventing this category within the ecosystem and our fortunes are closely tied with the success of this ecosystem.”
Ms. Sushmita Das , VP – Business, Kobian Pte Ltd
“Mercury is a well-known brand in India for Computer Peripherals for over two decades. Motherboards are one of the prime products of Mercury in India. Mercury Motherboards have been No 1 in the 3rd party chipset boards in India for many years. We are still among the Top 3 brands in 3rd party chipset Motherboards. We have a 12-15% market share in Motherboards today. Mercury has been a quality product and synonymous to Motherboards for over two decades in India.”
While the growth rate in the desktop market is not expected to be on par with that of mobile computers, innovations by motherboard makers are the primary reason for the market growing. The Indian game user market is finally opening up. Almost all vendors are increasingly seeing the market for gaming PCs becoming a reality; from less than a couple of thousand units a month, the market size is known to have tripled.