With demand for tablets weakening, many tablet vendors are looking to digest their excessive inventories and maintain their market shares by reducing prices, although such moves are further lowering their gross margins, according to sources from the upstream supply chain.

Asustek Computer CEO Jerry Shen previously said that tablet demand is dropping, but it will not completely disappear. Vendors' innovations and marketing strategies for their products will be the most important factors for tablet players to stay competitive, he added.

With competition remaining fierce, non-Apple tablet vendors have seen their profits from the segment shrink quickly. Some see almost no profits from selling tablets, and some others are even suffering losses.

Apple's iPad sales in the second quarter also showed an almost 9% on-year decline and a drop of three million units sequentially to reach 13.28 million units.

Asustek shipped 12 million tablets in 2013, but only shipped 4.1 million units in the first half of 2014.

Samsung has also recently reduced its tablet prices in order to accelerate the digestion of its tablet inventory. Samsung has reduced its 7-inch tablet to below NT$5,000 (US$167), forcing Lenovo and Asustek to follow suit.

However, Asustek is still seeing better-than-expected demand for its Fonepad series (tablet with phone function) products from emerging markets such as Southeast Asia countries.