Ben Bajarin takes a peek into the “white box” segment of the tablet market and finds out what they're being used for:
Nearly all evidence and data we find comes back to a few fundamental things. First, most of these low cost tablets in the category of ‘other’ are being used purely as portable DVD players, or e-readers. Some are being used for games, but rarely are they connecting to web services, app stores, or other key services. I have asked local analysts, local online services companies, app tracking firms, and many many more regional experts, and the answer keeps coming back the same. They affirm that we see the data showing all these Android tablet sales. But they aren’t actually showing up on anyone’s radar when it comes to apps and services in a meaningful way.
Is this even the same market as the iPad? I don't think it really is. Whereas the iPad is being used to effectively replace (or augment) the PC in many homes and businesses, this looks much more like a replacement for the portable DVD player. Think video iPod, not Mac replacement.