With tablet demand continuing to weaken, Taiwan-based vendors have taken a conservative attitude about their tablet operation. Asustek Computer and Acer have turned to focus more on niche applications, while Micro-Start International (MSI) has already phased out of the business and to focus mainly on gaming PC product lines. China-based white-box players that have joined Intel's China Technology Ecosystem (CTE), have also mostly stopped pushing tablet products.

Dropping demand is expected to cause Asustek's tablet shipments to fall below three million units in 2016, according to sources from the upstream supply chain, leaving Apple the only player that is still able to achieve strong profits from the tablet sector.

The sources also pointed out that despite weakening tablet shipments, Wintel-based 2-in-1 devices continue to enjoy growth. However, growth rates are still not strong enough to offset the decline of tablets.

Asustek has also begun shifting its tablet department's excess manpower to work on products such as virtual reality, augmented reality and smartphones. The personnel transfer will be completed by the end of 2016. However, Asustek will continue its tablet operations and expects the business to achieve breakeven operation in the first half of 2017.

As for the white-box tablet industry, the current number of players that is still releasing tablet products is only one-third of the industry's peak. Many tablet white-box players that were selected by Intel's nurturing project have already given up their tablet development as Intel has been cutting subsidies and new platform development.

To survive in the market, many tablet players have turned to develop products for niche markets such as industrial, enterprise, military and education, and hope to expand their presence in these areas.